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!