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Just how much is that 2% really worth?

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Re: Just how much is that 2% really worth?

#11

Post by nullspace »

onion2k wrote: post #7

My advice to people who want to work in a startup is always very simple: Ignore any equity. If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it. Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the start…

Very true, and thanks for the link.

I think that this also applies the other way around. If you're a founder building your early team, you should not hire people who want to join because of the equity. You should be bringing in people because they want to work on the problem for the salary that you can give them or promise to give.

If you hire someone who has an expectation that he will make a million dollars in 4 years - it can lead to a lot of bitterness while you are building the product - especially when you are having a few bad months. Have seen this happening a bunch of times.

Equity != Money, equity ~= the percentage of ownership and responsibility.

Edit: Salary AND relatively high ownership of the company / product. Some people don't mind taking risks if they have an opportunity to build and own something great.

Re: Just how much is that 2% really worth?

#12

Post by zhte415 »

Nice skit.

Small point: Fixed positioning of column on right (contaning calculations) obscures the bottom few lines on desktop (the result), probably due to expecting a greater vertical resolution. On mobile (Android) it completely obscures all input forms.

Re: Just how much is that 2% really worth?

#13

Post by nilkn »

This reminds me of the early-stage startup that offered me a $55k salary in a big city and zero equity to be engineer #3. They told me that if after a year I'd become an integral member of the team then we could discuss equity. Meanwhile they tried to sell me on the job by saying that if the company succeeded we'd never have to work again.

Re: Just how much is that 2% really worth?

#15

Post by [deleted] »

onion2k wrote: post #7

My advice to people who want to work in a startup is always very simple: Ignore any equity. If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it. Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the start…

[deleted]

Re: Just how much is that 2% really worth?

#16

Post by carrotleads »

newcf wrote: post #6

I'm not entirely sure the calculations work.. Maybe I entered data wrong, but I was trying to model the acquisition/startup that I just went through. with our numbers, and our dollars, and my shares.... I walked with a heckuva lot of money, but that's not what the site said.

What are you doing here on HN. Shouldn't you be on a beach?

Don't tell us you have the startup bug!

Re: Just how much is that 2% really worth?

#17

Post by hkmurakami »

nilkn wrote: post #13

This reminds me of the early-stage startup that offered me a $55k salary in a big city and zero equity to be engineer #3. They told me that if after a year I'd become an integral member of the team then we could discuss equity. Meanwhile they tried to sell me on the job by saying that if the company succeeded we'd never have to work again.

I really don't understand what these companies try to accomplish by essentially lying to you and trying to defraud you of your value. Do they really think you'd sitck around for long under these terms after you find out inevitably how badly you're getting fucked?

Re: Just how much is that 2% really worth?

#18

Post by newcf »

carrotleads wrote: post #16
newcf wrote: post #6

I'm not entirely sure the calculations work.. Maybe I entered data wrong, but I was trying to model the acquisition/startup that I just went through. with our numbers, and our dollars, and my shares.... I walked with a heckuva lot of money, but that's not what the site said.

What are you doing here on HN. Shouldn't you be on a beach? Don't tell us you have the startup bug!

Ha! I hear you.. beach is good.... it was a truckload,not a boatload? :) I still have to work, but , you know.... I can do what I want when I want.. ok... I need to stop getting braggy.. sorry ...

Yeah, I think it was with the equity addition.... Once I did that, my delta went in the negative, and it would have beeen better to stay corporate ;)

Re: Just how much is that 2% really worth?

#19

Post by newcf »

carrotleads wrote: post #16
newcf wrote: post #6

I'm not entirely sure the calculations work.. Maybe I entered data wrong, but I was trying to model the acquisition/startup that I just went through. with our numbers, and our dollars, and my shares.... I walked with a heckuva lot of money, but that's not what the site said.

What are you doing here on HN. Shouldn't you be on a beach? Don't tell us you have the startup bug!

OH, and TOTALLY have the startup bug.. I got lucky with a ton of blessings on the first one... I know it doesn't happen often.. but apparently it happens

Re: Just how much is that 2% really worth?

#20

Post by x3c »

calebclark wrote: post #10
newcf wrote: post #6

I'm not entirely sure the calculations work.. Maybe I entered data wrong, but I was trying to model the acquisition/startup that I just went through. with our numbers, and our dollars, and my shares.... I walked with a heckuva lot of money, but that's not what the site said.

There is a bug that triggers when you add a funding round. It takes your equity percentage down to zero, regardless of the amount raised or pre-money valuation.

Raise an issue in bug tracking. Name it the Zynga bug.
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