Ask HN: How much equity should I ask for?

Equity is the dirty secret of the widening wealth gap in society and especially poignant in startup land.[1] You’re taking a 50% pay cut for 0.2%. Assuming (for argument sake) no more dilution and $100m exit you get $200k. All that does is put you up to the salary you are giving up over four years. The founders (assuming 2, the other employees are at 0.2%, and 10% for seed funding) have 39% each. So their exit is $39 million each. Would you take a job where your future boss says, “I need you to take a risk, but assuming everything works out you’ll make $100k a year, your market salary, and I’ll make $10 million a year.” Does this sound remotely good or fair.

You needed more to start. The fact they gave you below market salary and crap equity is a huge red flag. Why help these people become rich if you can’t trust them to look out for you. If startups are all about learning and not earning [2], you need to really trust the founders. They should be helping your career in significant ways: prepping you for founding, introducing you to investors, helping you move quickly into more senior roles, bumping you up to market salary at the next funding event, giving you refresher grants, etc. Whatever helps you get where you want to go since you are taking a risk for them!

Depending upon your circumstances, I probably would just find another job. At least interview to get a BATNA for your negotiation. And look at total comp (salary, bonus, and stock) that you could get. Then compare to your current place and adjust for risk / reward as others have said. Ask to see the cap table. Look at likely exits with dilution and your percent ownership. Don’t fall for the snake oil of “10,000 shares and the founders (recruiter) said they could be worth a few hundred dollars each in a couple years!” Good luck.

[1] https://medium.com/the-wtf-economy/in-his-essay-on-income-in...

[2] http://www.bothsidesofthetable.com/2009/11/04/is-it-time-for...

I would find a job that paid more and put the money past 45k in the bank. In a few years I suspect you will have more money.

My rough guess without the analysis as above was. "Should get at least 5%". That's to replace your lost salary.

Think also that you are a key player in building "something big". You need to be rewarded for assuming risk beyomd the lost salary. That could be another five basis points there.

Pay attention to what class of shares you get and any contract clauses on dilution as well