The company recently got $3M investment. I’m being offered $152k salary and 2% equity, vested over 4 years. Is this good?

My thinking is that 2% of $3M is about $60k, so I could treat that as an extra $15k per year. But if I look at the valuation based on that investment, it is probably worth 5x that, like an extra $75k per year. All in all it is over $200k compensation, which I’m grateful for, but it’s on par with a tech job at a big tech company. Are these reasonable assumptions, or am I missing something?

  • Minister_for_Magic@alien.topBEnglish
    1·
    10 months ago

    Not to take the wind out of a very, very good high-level breakdown, but there are many, many ways for equity to be worthless even if the company appears to have a good outcome.

    • acceleration provisions can prevent you from getting your whole award even if the company is acquired
    • investors can add liquidation preferences into their terms that mean employees get royally screwed in all but the best case scenarios…and these can stack in multiple rounds of funding. (and right now, these are definitely being included in raise terms)

    Just to add a bit of a devil’s advocate as to why options should be mentally discounted from “optimism math” scenarios