Ask HN: Equity Offer

#1

Post by apurvak » Tue, Sep 21, 2021, 5:58 PM UTC

I am relatively new to the startup world. As an early employee, I am offered options at a price with a total value of X. For a company of a total of 30 employees, what is a good framework to think about my compensation? I would love to chat with someone with prior experience who might guide me in the right direction.

Re: Ask HN: Equity Offer

#2

Post by sethammons » Tue, Sep 21, 2021, 6:11 PM UTC

generally, count equity as a lotto ticket

Re: Ask HN: Equity Offer

#3

Post by apurvak » Tue, Sep 21, 2021, 6:26 PM UTC

sethammons wrote: post #2

generally, count equity as a lotto ticket

Sure. That is understood but how do I find out what is the good offer for an equity?

Re: Ask HN: Equity Offer

#4

Post by SaberTail » Tue, Sep 21, 2021, 8:43 PM UTC

You are not being given X, you are getting paper that lets you pay X to get shares worth X. Their value is zero.

At best, they're a lottery ticket. You can look at something like http://www.valuation.vc/ that uses data from other startups, to get an idea of what your odds are that they'll ever be worth something. Usually the odds are not very good.

Re: Ask HN: Equity Offer

#5

Post by sethammons » Tue, Sep 21, 2021, 10:28 PM UTC

apurvak wrote: post #3

sethammons wrote: post #2

generally, count equity as a lotto ticket

Sure. That is understood but how do I find out what is the good offer for an equity?

I don't think there is a good answer to your question beside "it is a good offer if it entices you to join their company." I guess you could ask what percent owner it would make you and what your liquidation preference is. Depends on how early you are too.