Re:Startup Stock Options – Why a Good Deal Has Gone Bad
by tomnipotent on Wednesday April 10, 2019 @12:03PM
(#19626002)
Yes, because startups are usually still cash poor after a Series A and you don't want to burn more than you need to. The whole point is to conserve cash until you can find more money or turn a profit, and employee salary is usually the largest cost for most companies.
Re:Startup Stock Options – Why a Good Deal Has Gone Bad
by TuringNYC on Wednesday April 10, 2019 @01:42PM
(#19627032)
>> Once a startup raises a series A is there actually any reason to pay below-market?
Yes, because there is a greater fool competing with you who seems to thinking the theoretical value of their illiquid options is worth a trade-off for equivalent actual cash.
Re:Startup Stock Options – Why a Good Deal Has Gone Bad
by phamilton on Wednesday April 10, 2019 @01:56PM
(#19627164)
> is there actually any reason to pay below-market?
"market" is a big chunk of change. "Google salary" is not market. It's closer to 50% of market. (GSUs and annual bonus are significant aspects of comp that are basically cash). "Netflix salary" is market, and for a series A company there are a lot of reasons not to pay senior engineers 300k+.
Once a startup raises a series A is there actually any reason to pay below-market? Fresh out of college I was employee #1 at a startup that had funding, and was basically at the mythical "Google salary for new college graduate" figure that is thrown around here, and higher than competing offers from name brand tech cos.