How are the founding dates of the startups distributed? Are recent startups still exiting well?

Founding dates? I don't know. IPO dates were 2007, 2019, 2023.

Well statistics shows that it is best to value equity at 0. I will take equity in a non public company. But not in exchange for cash compensation at my market rate.

I assure you that statistics do not show it is best to value equity at 0.

"Statistics" on its own doesn't tell you anything; you have to consider your own risk aversion. Only VCs can afford to be risk-neutral and only consider expected value.

Care to show your source?

I'm honestly stunned that people here are performatively math-illiterate.

Some companies experience liquidity events. Therefor the value of equity in those companies is positive. Some companies go out of business. Therefor the value of equity in those companies is zero.

If N is the ante hoc chance that a company will experience a liquidity event, then:

N * X + (1 - N) * 0 = value of liquidity

X is positive. 0 < N < 1.

Therefor the value is positive.

People aren’t saying the chance is literally zero. They are saying it is low enough that they can’t consider it reliable comp for income purposes in their own personal situations. I can’t say my experience has been any different so I don’t blame them. People commenting aren’t math illiterate. I’m kinda amazed you are taking things so literally when it’s so obvious to anybody reading how to interpret the discussion.

They sure are insistent on it being literally zero for people who don't think it's literally zero.

If you like, I'm happy to update my claim to, "startup equity often has non-trivial value, say, >$1000 per year."

Add a few zeros and I think we’d be in the right ballpark. You have to make up for the haircut before you start counting positive net value.

And then take into account the risk/reward premium and alternatives.

I hoped you had some real data, but all you had was a joke.

Ok it's not zero. Is it 0.0000000000000000000000001?

Surely you're aware that obtaining 0.50$ is not going to have a large impact? Even if the sum is 3000$ the impact is extremely limited.

But you had to go and be a r/iamverysmart material because you actually have no more information than me.

Also learn to spell therefore please.

You played a stupid game, you won a stupid prize.

Something is different than nothing. When people repeatedly insist that something and nothing are the same, they get trivial answers.

And learn which side of the digits a dollar sign goes on please.

ok, so you're a mini elon musk pet that has good name recognition. The probability that anyone can replicate this ins the million+ employee mark is worthless, also.

so, anecdote.

The rate of having a liquidity event for startups, particularly startups past the A stage, is just obviously not ultra low. Like, is it better than 50%? Reader, it is not! But it's not sub 10%, either.

People can make intelligent decisions about equity without hyperbolically insisting that the chance that that equity will be worth money is one in a million.

Are there statistics about funding round (A, B, C, etc) and getting good value for options?

It's not really possible to have nice uncontested stats about this because the definitions of the rounds aren't fully neat, there are potentially generational effects, and how you divide up industries isn't fully neat either.

In a typical year, a double-digit number of tech companies IPO (there was a big jump in 2021 and then a crash in 2022/2023, with 2024 seemingly back in the double-digit range). https://www.visualcapitalist.com/charted-four-decades-of-u-s...

Let's be really clear, though: there's "getting good value for options" and then there's "getting some value for options." It is straightforwardly true that in general big public companies have better comp than pre-IPO companies: the guaranteed value of equity in your Metas or Googles or even lower-tier public companies is generally higher than the expected value of pre-IPO equity, even if you are relatively risk-insensitive.

That is importantly different from "the value of pre-IPO equity is zero," or "it is a one-in-a-million event to get value from pre-IPO equity."

It’s not importantly different if the value you get from pre-IPO equity is less that the haircut you took to work at the startup, which is overwhelmingly the case.

You want to tell me you’d be feeling like your equity was worth something in colloquial terms if you got what amounted to a mediocre bonus one year through your liquidity event?

Yes. Something is more than nothing. This is not rocket science.

I really want to insist on the principle that we are nuanced enough people to say, "startup equity is worth less, in expected value, than public company equity, but 'less than public company equity' is still more than zero."

I truly empathize with your desire. But I can’t agree.

To get to the point of the community feeling like startup equity is worth something on average, I think we need to figure out how to generate more favorable outcomes for startup employees.

If startup equity is worth something 20% of the time, the average person would need to work at 4 startups before seeing value. And the statement that it has non-zero, but low, expected value, just isnt true. On average it wasn’t.

If we could make startup equity worth something-minus-x 100% of the time (instead of just something 20% of the time), I’d be more amenable to agreeing with you that you can place a reliable non-zero value on startup equity.

That means things like removing liquidation preferences. Unfucking the tax situation around options or making it standard politcy that the company buys your options for you. Universally allow secondary markets. Build in participation structures for existing employees through funding rounds.

Would you say the expected value of a lottery ticket is > 0? Because startup equity is just too unreliable for an average person to not treat it like a lottery ticket.

I will concede that if you are very very discerning in which startups you work for and a good negotiator and have access to questionably legal secondary markets, you may be able to beat the curve. But that’s certainly not the average case.

You don't appear to know what "average" means. You mean that the modal value is zero. The average value is not.

There are all kinds of bets where the modal value is zero or negative that are good bets!

I've worked at 10 startups since 2006, with equity or options each time. Only one time did it turn out to be worth anything at all (~6 months salary), and that one time wasn't even a successful "exit". It was more of an aquihire, and they paid out the options for everyone they didn't want, ie everyone not living in the Bay. The other nine times my options have been worth precisely zero, either I get let go or quit because the company is circling the drain, or fizzles out, or gets rid of a bunch of people to goose the numbers before a fire sale.

Stock options are a lottery ticket, and I value them roughly the same.

Sounds like your startup equity has been worth about $3000-$5000 per year?