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Ask HN: How much equity should I ask for?

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Re: Ask HN: How much equity should I ask for?

#11

Post by learnstats2 »

glofishx wrote: post #6
d0m wrote: post #2

You ask £40k and 1.5%. What's the worst that can happen?

well the worst that can happen is that he does not get hired: no salary increase, no equity. And this is not even the worst that can happen. I have withdrawn (let them expire) offers from people that after receiving my first offer tried to strongarm ridiculous bonuses. The reason I have withdrawn the offer is that it made me clear that the person does not understand their worth to us - hence would likely be a trouble…

I've been on the other side of this and it was absolutely fine.

I asked for fair market value, i.e. I understood I was asking for less than my value to the company. When this elicited a bitchy response along the lines of what you have said, I understood enough about the company to find a better job.

Companies that won't negotiate with you over salary, won't negotiate with you over anything. A toxic place to work.

Re: Ask HN: How much equity should I ask for?

#12

Post by Catalyst4NaN »

tptacek wrote: post #9

Personally, I think negotiating for equity in terms of percentages is a mistake. The better way to do it is in terms of financial outcome. You make X dollars in salary every year. You model the equity as a lump-sum bonus paid after 4 years (divide the liquid value of the options by 4, mentally applying as a deferred bonus for each vesting year). To make that happen, you ask management for some outcome scenarios --- a…

I think I understand what you mean. Certainly i'll look into evaluating my value + wants based off your model.

For me in some small way I want to be working for a company that is even in an almost insignificant way mine... Not dissimilar to the attitude that I guess crowdfunders have.

Re: Ask HN: How much equity should I ask for?

#13

Post by idlewords »

gesman wrote: post #7
d0m wrote: post #2

You ask £40k and 1.5%. What's the worst that can happen?

You: I want £40k and 1.5% Corp (in 1 week): "Thank you, but we cannot entertain your offer. We wish you all the best in your future endeavors". You: Ok, let's negotiate. Corp: "We've just filled in the position with suitable candidate. We'll keep your resume in our database for 6 months in case we might get openings down the road."

And then you take that better-paying job you were already offered.

Re: Ask HN: How much equity should I ask for?

#14

Post by tptacek »

Catalyst4NaN wrote: post #12
tptacek wrote: post #9

Personally, I think negotiating for equity in terms of percentages is a mistake. The better way to do it is in terms of financial outcome. You make X dollars in salary every year. You model the equity as a lump-sum bonus paid after 4 years (divide the liquid value of the options by 4, mentally applying as a deferred bonus for each vesting year). To make that happen, you ask management for some outcome scenarios --- a…

I think I understand what you mean. Certainly i'll look into evaluating my value + wants based off your model. For me in some small way I want to be working for a company that is even in an almost insignificant way mine... Not dissimilar to the attitude that I guess crowdfunders have.

No matter how you choose to negotiate, do the step of asking your employers for a couple scenarios --- not just one --- that will put actual numbers to the value of your options. Not based on the VC valuation, but on what the company might get acquired for, and what sales figures would look like at those acquisitions.

You will find hiring managers that literally have no idea how or why your options could be worth anything, and it's worth knowing when you're dealing with them.

Re: Ask HN: How much equity should I ask for?

#15

Post by Catalyst4NaN »

shubb wrote: post #5

How much of the value of the company is tied up in it's technology? Your leverage at the moment is, if you decided to get another job, you would walk away taking all knowledge of the current system with you. Imagine you quit, and something went wrong the next day - how long would it take them to fix it? I think your boss did you a huge favor, taking a risk on you this first year. Now you are no longer an unproved dro…

I don't think I can quickly evaluate that. I would say it's less technical than a traditional tech company but still closer to that than say an eCommerce store.

> I think your boss did you a huge favor, taking a risk on you this first year. Now you are no longer an unproved dropout, he owes you a real wage. Keep both of those in mind.

This is exactly the lines I'm thinking of. I've been lucky enough to gain the sort of experience that puts me on the same playing field (at least in the view of employers) as my a grad.

Re: Ask HN: How much equity should I ask for?

#16

Post by gjmulhol »

learnstats2 wrote: post #11
glofishx wrote: post #6

Earlier quoted context omitted.

well the worst that can happen is that he does not get hired: no salary increase, no equity. And this is not even the worst that can happen. I have withdrawn (let them expire) offers from people that after receiving my first offer tried to strongarm ridiculous bonuses. The reason I have withdrawn the offer is that it made me clear that the person does not understand their worth to us - hence would likely be a trouble…

I've been on the other side of this and it was absolutely fine. I asked for fair market value, i.e. I understood I was asking for less than my value to the company. When this elicited a bitchy response along the lines of what you have said, I understood enough about the company to find a better job. Companies that won't negotiate with you over salary, won't negotiate with you over anything. A toxic place to work.

There is an argument to be made that it is better for a company to make a fair offer and not negotiate. There have been long patterns in many industries that people who negotiate harder get better results, leading to large wage gaps (particularly between genders). A fair, open, honest, and frank discussion about the position of the company is best, but I think a hard negotiation creates a norm that can be toxic.

Re: Ask HN: How much equity should I ask for?

#17

Post by lordnacho »

1% is £70K, albeit illiquid that still sounds like a lot of money. If they better your £28K salary it looks like £100K (of course salary is real and ongoing whereas equity is a single NPV). Is there a vesting schedule?

I'd say you need to think about how much you like working there, and your chances of finding something better. The market does seem pretty buoyant, could be well worth it to talk to more people.

Re: Ask HN: How much equity should I ask for?

#18

Post by Catalyst4NaN »

tptacek wrote: post #14
Catalyst4NaN wrote: post #12

Earlier quoted context omitted.

I think I understand what you mean. Certainly i'll look into evaluating my value + wants based off your model. For me in some small way I want to be working for a company that is even in an almost insignificant way mine... Not dissimilar to the attitude that I guess crowdfunders have.

No matter how you choose to negotiate, do the step of asking your employers for a couple scenarios --- not just one --- that will put actual numbers to the value of your options. Not based on the VC valuation, but on what the company might get acquired for, and what sales figures would look like at those acquisitions. You will find hiring managers that literally have no idea how or why your options could be worth any…

First thing on my todo list for Monday! :)

Re: Ask HN: How much equity should I ask for?

#19

Post by learnstats2 »

gjmulhol wrote: post #16
learnstats2 wrote: post #11

Earlier quoted context omitted.

I've been on the other side of this and it was absolutely fine. I asked for fair market value, i.e. I understood I was asking for less than my value to the company. When this elicited a bitchy response along the lines of what you have said, I understood enough about the company to find a better job. Companies that won't negotiate with you over salary, won't negotiate with you over anything. A toxic place to work.

There is an argument to be made that it is better for a company to make a fair offer and not negotiate. There have been long patterns in many industries that people who negotiate harder get better results, leading to large wage gaps (particularly between genders). A fair, open, honest, and frank discussion about the position of the company is best, but I think a hard negotiation creates a norm that can be toxic.

> people who negotiate harder get better results, leading to large wage gaps (particularly between genders).

This can only be true if companies are not making fair offers in the first place, i.e. the wage gaps result from a culture of underpaying employees.

I agree that this should be better addressed, but forbidding employees from negotiating is only harmful.

Re: Ask HN: How much equity should I ask for?

#20

Post by shazow »

gesman wrote: post #7
d0m wrote: post #2

You ask £40k and 1.5%. What's the worst that can happen?

You: I want £40k and 1.5% Corp (in 1 week): "Thank you, but we cannot entertain your offer. We wish you all the best in your future endeavors". You: Ok, let's negotiate. Corp: "We've just filled in the position with suitable candidate. We'll keep your resume in our database for 6 months in case we might get openings down the road."

If an employer rescinds an offer after you make a politely-phrased counter-proposal, then that's a very combative attitude and I'd stay away from working there to begin with.

The only kind of employer who would react that way is one who routinely misleads and exploits their employees through sketchy tactics and ultimatums.

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