Re:You are an amazing engineer, but you are a terrible fit f...
by droithomme on Monday December 03, 2012 @08:23PM
(#4869019)
Your analyses are very good and your posts pedagogical.
I'd like to add that, just as you have the company presenting this in a certain light, the engineer needs to look at this investment of $60,000 a year of his personal money as cash salary to buy stock in a startup the same as a $150,000 a year earning person would view any other $60,000 a year stock investment in an extremely high risk unproven early startup. As a point of comparison, we know that Y Combinator gets significant equity for one time investments of only $10,000 in early stage startups. An investment of $60,000 a year should be valued similarly. Clearly the employee is directly contributing more than six times as much as Y Combinator does and should receive six times the equity for that first year.
I'd like to add that, just as you have the company presenting this in a certain light, the engineer needs to look at this investment of $60,000 a year of his personal money as cash salary to buy stock in a startup the same as a $150,000 a year earning person would view any other $60,000 a year stock investment in an extremely high risk unproven early startup. As a point of comparison, we know that Y Combinator gets significant equity for one time investments of only $10,000 in early stage startups. An investment of $60,000 a year should be valued similarly. Clearly the employee is directly contributing more than six times as much as Y Combinator does and should receive six times the equity for that first year.