Ask YC: Equity/Salary Question | Hacker News Reader

Ask YC: Equity/Salary Question

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I know, I know, another one of these :), but I figured I'd get the best answers here since so many people have first hand experience and YC companies with funding (Xobni, Weebly, Justin.tv etc) are hiring as well.

A few details: the company has raised a seed round (few hundred thousand) and I'll be employee #4 (2 co-founders). There's an existing codebase as well. So in many ways it's similar to joining Xobni & co. at their maturity.

The offer: 1% equity and below market level salary (at best 70% of what I can get at a 'normal' job).

So my question is obviously: is this fair? I know the equity is fair, maybe even a bit generous, but what of the salary?

I'll be getting about the same as the co-founders. Should I hold out for a bit more? I'm not expecting them to rise to market-level since they're a startup and all, but figure something close would be reasonable.

P.S: I'm a developer.

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I think there are details that are missing from your post, e.g. are the cofounders first time entrepreneurs / are they more senior than you? If so, how much? How senior are you? Are the seed round investors all angels? How good are they? How many?

What is the startup's next proof point / how far away? How far away from launch are they? Are they 10% burned through their seed round, or 80%? I.e. when is their out of cash date?

How big is the option pool? What do you and the founders think your dilution will look like through exit?

Do you get [ partial single ] and/or double trigger acceleration? If single, what do the founders have? (Note: the founders acceleration can affect valuation at early stages of company.)

How much does this startup need you?

(Would be happy to chat with you briefly to give you my thoughts on your situation. Email: my username with a period inbetween first.last + xobni.com.)

>(Xobni, Weebly, Justin.tv etc) are hiring as well.

Why don't you interview with Xobni, Weebly, Scribd, J.TV, etc? Shop around.

Have you read PG's "The Equity Equation" (http://www.paulgraham.com/equity.html)? Please do, it's instructive.

The short version, imho, is if you're worth employing as the 4th employee, you're worth more than 1%

Good luck whatever you decide ;)

You ought to be able to do better. At that stage I'd consider 1% and a competitive salary, or a larger stake and living expenses, but that offer wouldn't cut it.

Assuming that you are qualified enough to get an above market salary with a later stage startup, I think you should hold out for more equity.

That actually is pretty standard from what I know. I remember seeing a survey and that was average for CTO. The difference is salary is not much, and if things start going well that could be bumped up shortly anyways. The 1% is really what I would focus on personally.

EDIT: Average for a non-founder CTO.

keep in mind that if the company is successful and is one of the lucky few to get a series A VC round you will likely get diluted to 0.5% - 0.6%.

You could get a crap job for some non-startup company and start your own thing for 100% equity...

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