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> Best thing to do: forget about them. If and when the time comes, you'll know what to do. That is terrible advice. If you work at a startup then compensation

by pkaler 13y ago

> Best thing to do: forget about them. If and when the time comes, you'll know what to do. That is terrible advice. If you work at a startup then compensation will be a mixture of salary and equity. You should know your worth and negotiate your number when joining a startup. You should understand the details of the last financing: how much was raised? who were the investors? how long is the runway? what were the high-level economic terms of the deal? You should ask around to see what is fair market terms for the options you should receive. You should do a search on angel.co/jobs and look at comparables. Read Venture Deals by Brad Feld and Jason Mendelson even if you are not a founder. Founders and investors know this stuff. If you are naive going into your employment you may end up being screwed out of upside. Get your papers straight.

JonFish85 13y ago
Sure, use it as part of your negotiation up-front, keeping in mind that 2% of $0 is still $0. If things go incredibly well, with a ton of luck, maybe you'll get something. Maybe it's part of your compensation, but it's a pretty useless part: you can't spend it for many years (usually at least 4, assuming you can sell after they all vest), and it's not guaranteed. You get the percentage of the scraps--after the VCs have taken their cut, and the founders have taken theirs. Call it compensation if you want, and certainly it's good to have some skin in the game, but there's no good reason to really follow it that closely after you've signed on with the company. Once they're in your employment contract, forget them. Stick them in a file cabinet someplace marked +4 years and see where things go. In that time, there will (probably) be more rounds of funding, which will dilute your shares. Things will change: valuations, personnel, perhaps executives. Don't waste time re-calculating your options all the time, it's an exercise in futility.

by pkaler 13y ago

JonFish85 13y ago

Sure, use it as part of your negotiation up-front, keeping in mind that 2% of $0 is still $0. If things go incredibly well, with a ton of luck, maybe you'll get something. Maybe it's part of your compensation, but it's a pretty useless part: you can't spend it for many years (usually at least 4, assuming you can sell after they all vest), and it's not guaranteed. You get the percentage of the scraps--after the VCs have taken their cut, and the founders have taken theirs. Call it compensation if you want, and certainly it's good to have some skin in the game, but there's no good reason to really follow it that closely after you've signed on with the company. Once they're in your employment contract, forget them. Stick them in a file cabinet someplace marked +4 years and see where things go. In that time, there will (probably) be more rounds of funding, which will dilute your shares. Things will change: valuations, personnel, perhaps executives. Don't waste time re-calculating your options all the time, it's an exercise in futility.