Am I getting a good deal? | Hacker News Reader

Am I getting a good deal?

7 pointsfoohbar9 comments

I recently started working for a tech startup in SF. I'm a smart engineer who chose not to work for google and facebook. Also i went to an ivy-league school (though this shouldn't make a difference) and graduated last year. The startup has been around for about 2 months and has raised some decent money, + has a ton of frothy investor interest. There are 5 employees - 3 are founders making me employee #2. I've built about 40% of the existing alpha product. There are 2 other engineers.

I'm getting 75k and half a point of equity. There's a 4 year vesting scheme. Am I getting a good deal?

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That is not a good deal, but is a pretty typical deal. You aren't entitled to whinge about it quite yet. Wait until they hire their college bud as vp of product for $140k and 5 equity points. When that happens print out a calendar that ends on the date of your 1 year vesting cliff and tape it above your bed. Welcome to the glamorous world of startups.

I disagree somewhat with the other posters about what you "deserve". You deserve about as much as you can negotiate. The more willing you are to lose the whole thing, the harder you can negotiate. That being said, if you go in to negotiate, don't go in with the fairness argument. Describe how you are excited about the company, appreciative of the offer and that you took the low equity because you were unproven, but now that you have proven yourself you would like more. Be prepared to sacrifice cash for equity or to walk.

The one thing I would say is this, if you don't ask you definitely wont get more. I don't think any of us can truly judge if it is a good deal because we dont have enough information.

The salary is fine. You should be able to live comfortably on $75k, even in the bay area (assuming you have no kids/mortgage).

The equity isn't ridiculously low, but it's not high either. You should probably push for more if you can.

At the end of the day though the guy across the street with 5% of a crappy startup isn't getting a better deal than you if your company rocks.

Well if you actually chose not to work at Google or Facebook, there were obviously other motivating factors than a decent salary. None of these other factors are listed here. So it's impossible to say.

Of course many people here will immediately judge everything by dollar amount alone, but by that logic no one should work for NASA, which has crappy pay.

Let's assume equity amounts to nothing (you're not getting much).

75K * 4 years = 300K

If you work somewhere else (Goog, FB, ...) for 4 years, would you learn more, make more money, be more content?

4 years is a looong time, they really locked you in there.

Also depends on whether your current role is challenging you enough and is in an area that you want to excel in. If you are young and just getting started sometimes the opportunity of mastering the field is itself very valuable.

If one has to ask whether or not they got a good deal, is there really any possible chance that they got a good deal? Are you hoping the founders were simply charitable?

No.

EDIT:

What will the company lose if you walk? That is what your equity should be based on. Given your brief bio, it would seem as though you can offer a lot to the company.

What contribution are you making to the product - aside from doing 40% of the work, are you contributing to design/product decisions, novel ways to implement the features? Is there any IP onto which your name would be should it be granted a patent?

What other options do you have with respect to other opportunities?

I agree, with phlux, if you're contributing to some of the IP. Then you deserve a lot more or at least partial ownership to the IP.

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