Re:How I negotiated my startup compensation (with numbers)
by colmvp on Tuesday August 21, 2012 @05:09PM
(#4414797)
Unless lighting cigars with $20 bills could give you more money, I don't see that as an applicable analogy. If anything, it's a version of gambling.
Taking a significant paycut can be worth it if the options offered proportionately compensated the salary disparity IF the startup exits AND at a number that you estimate it could potentially hit.
If one isn't willing to take that risk then they should opt for less equity/no equity but a fairer market value.
Re:How I negotiated my startup compensation (with numbers)
by rdl on Tuesday August 21, 2012 @08:40PM
(#4415545)
At a very early stage startup, being a late founder means $50k cash salary (I get $30k as a founder, and if we did a late founder, I'd push for the same salary) vs. $100k+ for employee #1, but huge equity (5-50% instead of 0.5-5%, depending on person, size of team, how late, etc.). If you don't view founder-level equity as being worth $50-100k less cash comp, you probably shouldn't work there.
It is never reasonable to trade your skills at substantially below-market compensation - regardless of if you can afford to do so. I have a lot of savings, but that doesn't make it reasonable for me to start lighting cigars with $20 bills.
Equity is a form of compensation, in this case dchichkov worked it out to be a expected value of $5K (or thereabouts) - how does one justify taking a haircut substantially more than this? (in this case, the haircut is on the order of $50-100K depending on the person).