Ask HN: Reasonable equity for early employees?

Re:Ask HN: Reasonable equity for early employees? by johnrob on Saturday January 15, 2011 @12:55PM (#2107381)

If they are paying you a salary that changes the equation, to reveal the true equity amount you'd have to convert your salary (times the number of vesting years) into stock at the current valuation. The 'real' number in this case is probably more like 10-20%.

[ Parent | on HN ]

Re:Ask HN: Reasonable equity for early employees? by dfnord on Saturday January 15, 2011 @03:11PM (#2107681)

Yes, I took that into consideration. The explicit equation, all from PG's article is:

i = 1 / (1 - n) + sp

where:

i: the amount I'll increase the company's worth divided by the profit multiplier (which is 1 + profit(%)/ 100, eg: 1.5 for a 50% profit)

n: equity received

sp: salary price. Which is anual salary * overhead (pg suggest 1.5) / company's valuation

In short, my values are:

n = 1%

i = 1.023 (2,3% which with a profit of 900% means they'd expect me to increase the company's value by 23%)

sp = a bit above market's salary (can't say much more, sorry)

[ Parent | on HN ]