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Because FAANG pays equity too. Google will pay a senior engineer 200k base and 250k in liquid stock a year for 450k TC. That stock is also incredibly low risk.
by ditonal 3y ago
Because FAANG pays equity too.
Google will pay a senior engineer 200k base and 250k in liquid stock a year for 450k TC. That stock is also incredibly low risk.
If a startup paying market means 450k cash, absolutely there’s no need for equity. But if it means matching the 200k base then obviously you’re screwed with no equity. And I’m theory it should be a lot of equity given the much higher risk premium.
- VirusNewbie 3y agoAccording to levels.FYI, Google average for senior engineer is closer to 360k. But your point still stands. You are getting equity either way, both are likely to appreciate, but one is likely to be more liquid. So you're trading liquidity for a higher return.
- DoughnutHole 3y ago> both are likely to appreciate More than half of all startups fail within the first 10 years. They’re not just less liquid, they never experience a liquidity event at all. That equity is effectively $0. The odds of any given big company going bust are dramatically lower than that. Their equity might depreciate but it’ll at least be worth something.
- VirusNewbie 3y agoOh I was more thinking late stage companies, but you are correct.
- pc86 3y agoBut you're getting 0.5-2% of Google. That's why startup equity is a lottery ticket, and why it comes with a comparable decrease in cash comp.