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I know it will never happen, but I'd love to see some way of standardizing how this information is presented based on various terms to help potential employees

I know it will never happen, but I'd love to see some way of standardizing how this information is presented based on various terms to help potential employees make informed decisions. Right now there is MASSIVE information asymmetry and companies are absolutely leveraging that during their hiring processes. In many cases, they have to in order to stand a chance at being competitive when hiring (which is a statement in and of itself). Given the complexity of these sorts of things for the average employee who has never looked at a term sheet before, has no clue about the tax implications of options, etc. what can be done to even the odds? My personal rule of thumb right now is that the odds of getting equity that's worth a damn if I'm not a co-founder would typically not be worth it, so I make decisions based on the rest of the compensation package. It is simply the safest way to play it when I know I'm not the smartest one at the table in an equity-based discussion because of said information asymmetry.

CPLX 11y ago
> standardizing how this information is presented They could give them actual money. That seems to solve the problem neatly.
- scott_s 11y ago
  That is shostack's conclusion.
  - shostack 11y ago
    Actually, my conclusion is that because of the information asymmetry, and the fact that for most opportunities the equity is not worth getting out of bed over, I choose to focus on the cash. But please don't mistake that for me saying companies should just pay cash. While that would be great, I think there is definitely value in offering equity, particularly for early stage companies that may not have the revenue to actually offer a fully competitive salary. The thing that needs to change is how prospective employees are educated about this so they can make fair and informed decisions as to their risk tolerance.
7Figures2Commas 11y ago
> My personal rule of thumb right now is that the odds of getting equity that's worth a damn if I'm not a co-founder would typically not be worth it, so I make decisions based on the rest of the compensation package. This is, for most employees, the correct approach. The reality is that most of the information you might ask for and be provided is usually going to be of limited value and for a limited period of time unless you happen to join the company right before its final financing or an exit. Put more simply, equity structure is typically not static. If you join a company in part because you like the equity structure at Series A, you have no guarantee that the equity structure will be as appealing to you after the Series B or C.
- shostack 11y ago
  Yep, and further to that point, having the information doesn't necessarily mean there are any fewer ways for you to be screwed out of said equity. It just means that you might be more informed about the number of ways you can be screwed.
spydum 11y ago
Sort of like the truth in lending documents you get when signing off on a loan? Interesting idea

CPLX 11y ago

> standardizing how this information is presented They could give them actual money. That seems to solve the problem neatly.

scott_s 11y ago
That is shostack's conclusion.
- shostack 11y ago
  Actually, my conclusion is that because of the information asymmetry, and the fact that for most opportunities the equity is not worth getting out of bed over, I choose to focus on the cash. But please don't mistake that for me saying companies should just pay cash. While that would be great, I think there is definitely value in offering equity, particularly for early stage companies that may not have the revenue to actually offer a fully competitive salary. The thing that needs to change is how prospective employees are educated about this so they can make fair and informed decisions as to their risk tolerance.

7Figures2Commas 11y ago

> My personal rule of thumb right now is that the odds of getting equity that's worth a damn if I'm not a co-founder would typically not be worth it, so I make decisions based on the rest of the compensation package. This is, for most employees, the correct approach. The reality is that most of the information you might ask for and be provided is usually going to be of limited value and for a limited period of time unless you happen to join the company right before its final financing or an exit. Put more simply, equity structure is typically not static. If you join a company in part because you like the equity structure at Series A, you have no guarantee that the equity structure will be as appealing to you after the Series B or C.

shostack 11y ago
Yep, and further to that point, having the information doesn't necessarily mean there are any fewer ways for you to be screwed out of said equity. It just means that you might be more informed about the number of ways you can be screwed.

spydum 11y ago

Sort of like the truth in lending documents you get when signing off on a loan? Interesting idea