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Comment by nhstanley | Hacker News Reader

I don't have as much personal experience (only one colossal flop, $4k invested + ~20% lower salary), but I've got enough experience in the industry to have come up with this hard and fast rule: If you didn't found the company and aren't getting 10%+, equity is meaningless. If they insist you take equity ("Don't you have faith that we'll be successful?"), you can offer to knock off 1% of what you would have expected in annual salary without it (even that is arguably too much). Otherwise it's absolutely not worth it.

Companies love trying to get you to take a 5-40% pay cut because "It's a startup" and "we'll give you equity". Total BS. You will be better off spending an hour every week minding your money in other ways, with your appropriate salary.

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"Don't you have faith that we'll be successful?"

To which the answer is: "The success of this company will depend much more on management's strategies and the vagaries of the market than on the code that I write. Besides, you're not sharing your financials and other private business information with me, so I have no basis for guessing whether the company will be successful or what the value of the equity you're offering me will be. And in any case, I need to be able to pay my rent and other expenses regardless of whether the company is successful or not. So I'm expecting to receive a competitive salary."

Likely response to that is "Not a team player."

And you're better off not being there.

It blows my mind when friends accept offers and I ask "did you get any equity?" and they say "yeah" to which I reply "how much?" and they give some figure that is meaningless without a cap table, and when pressed further I learn that they have never seen the cap table.

To be fair, I've talked to people in some companies that try this that quite simply do not understand how options work. It is ignorance, not malice, that causes their odd behaviors (not that the end result is any better).

My usual bargaining gambit is to ask how much salary they will give me over the vesting period to buy back the options. If nothing else this puts a price floor on how much the options are worth to the company.

Actually you would be better off coding something yourself in your spare time and giving it away for free. As soon as you can get recognition or an audience you are building some intrinsic value that will pay itself out some day.

A good rule of thumb is any start-up options has to potentially be 2-5x better than I would get at a FSTE 100 (DOW 30 in the USA)

BTW British telecoms latest share save 5 years maxed out at £200 a month - just came out at £100k effectively tax free.

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