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?
Peter Thiel invested in a previous startup I was at. His advice to the founder: Don’t give any employee more than 2%.
It sounds like your startup is seed stage? $152k in a seed stage is on the high end. Unless it’s a role like head of finance or ML engineer, may be getting overpaid. This is its own risk: Folks will expect a lot from you and be frustrated if you can’t fix everything. Alternatively, the founder could be less sure of common practices and overspending. That $3M runs out a lot more quickly than you’d think.
You also can’t cash in on that 2% for a long time, if ever. AND you have to pay for it before you can cash it out - you don’t own the equity, only the options.
If you want a higher salary, join big tech. Folks don’t typically stay in startups for the salary. Rather, startups can be a great opportunity to elevating your career, and you’re working in a dynamic environment where your work and ideas matter.