You can get a $100/year raise just for the asking. In tech, salaries are just not negotiated at the $100/year granularity. Imagine saying "I'm also considering an offer from this company, can you offer more" and the HR department coming back with "Sure, we can give you $100/year more."

If you can get a $100/year raise just for the asking, and you can also get a $100/year raise in exchange for equity, then simple arithmetic indicates that the equity has zero value.

This is trivially wrong. You could get a $100 raise once, and possibly several times. But at some point, the boss would say "alright, no more raises".

At that point, you could say "I'll give up all my equity for another $100", at which point the boss would jump to agree.

> But at some point, the boss would say "alright, no more raises".

Not because $100 is too much, but because you've annoyed her by asking too many times. $100 is still trivial in value to the business.

This still is refusing to consider the marginal case, which is what the OP was asking about. At some point, even if asked the first time, a boss might refuse a $100 raise. They would still take the $100 for equity deal.

The point was just a thought experiment to show that equity has more than 0 value.

Thank you.

It is quite something that the best objection HN can offer to "Equity has no value" is "Surely it's worth at least five cents an hour."

OK, equity is worth five cents an hour. I admit it! Let's all negotiate with that in mind.

I was making a rhetorical point against the idea that it was worth zero. I was not attempting to actually put a value on anyone's equity.

It's quite something that you apparently couldn't tell the difference between those two things.

Slowly a strategy emerges ... ;-)

Or it means: you value your equity at $0 a year, and your HR guys get a bonus for reducing expenses.

"If you can get a $100/year raise just for the asking, and you can also get a $100/year raise in exchange for equity, then simple arithmetic indicates that the equity has zero value"

If I offer my Embarcadero penthouse in exchange for a $100/year raise, does that mean the apartment has 0 value?

If you can't ask for more of a raise, then yes.

The article clearly wanted you to ask for a raise at at least the granularity of real negotiations. Try getting a $10K raise in exchange for giving up equity.

> Try getting a $10K raise in exchange for giving up equity.

This will be possible (for people operating in the eng compensation band) at almost any startup you might want to work for. If you ask for this, and they don't at least discuss it with you, it's a pretty strong sign that you don't want to work there.

I take it you mean they don't want you to work there?

No. What I meant was if a company isn't willing to discuss giving you a higher salary but lower equity it probably means that they don't really value their own equity. And not valuing their own equity is a proxy for not valuing the future of the company.

You don't generally want to work somewhere the company leadership doesn't value the future of the company.

It could instead mean that they are being careful with burn rate, and capital is hard to get, and their calculations include employees being part-paid with equity - for everyone's benefit - because companies die by the current account!

Ya, that's true. It's hard to make a rule that is 100% applicable as there are always exceptions. I guess what I would really say is that they should be willing to discuss the situation with you and explain the status of the company and how that informs your compensation. The more in depth a company will go with you the better.

Agree.

> suggest to trade the equity portion of the offer for the cash value of the options (in addition to the advertised salary). Good luck.

I was explicitly given that choice (in three packages, high/med/low options count in exchange for offsetting increase in starting salary). Being "smart", I took the salary and low options and that was a poor choice in retrospect, given that we IPO'd 2.5 years later and my salary now would surely be the same regardless of the initial choice.

I don't know how common it is, but it's absolutely doable and done. (I suppose you could argue whether the company I joined was early-stage or not.)

> and my salary now would surely be the same regardless of the initial choice.

I wouldn't be so sure unless you've never gotten a percentage-based raise.

I'm quite sure...as it's been 13 years and 5 (or 6 or 7?) promotions spanning from Senior Software Engineer to VP.

What about a deal where you give me half your salary and I buy you a lottery ticket every payday?

That would be a bad deal for me. But it has no relevance to the point I was trying to make.