Ask HN: My employee equity?

Your only leverage is getting a new job and/or straight up quitting. Unless you're willing to do either of those, they're going to keep dangling that carrot.

Force their hand and say you'll have to seriously consider other offers unless there's an equity package coming from them within a week.

Only do this, however, if you're willing to have your bluff called. If you're not, you have no negotiating power and will be relying on their kindness.

It sounds like you are the first employee? If so 1-2% seems to be the norm.

Who are you negotiating with? Does one person own all equity or several founders plus investors?

1. A promise of equity is a red flag. A professional startup puts this in writing. If things don’t work out, that’s what vesting is for.

2. Wearing all the hats and the only technical hat initially puts you a lot closer to founder status.

3. “landing projects” doesn’t sound like a startup, sounds like a consultancy. Taking reduced market salary here for equity doesn’t seem right, the equity will never likely payoff to justify it.

Step 1. Interview at big companies. Figure out how much you could earn (total comp: salary, bonus, and guaranteed equity). Also to get a BATNA.

Step 2. Value the startup. Account for professional investors, market size, likelihood of success, etc. Don't just go off what the founders tell you. Look at comparable startups and their exits.

Step 3. Figure out how much the money you gave up is worth. Multiply it by 4 (last year plus the next 3) then figure out the percent of the company. Would also probably double it for the risk you are taking. (Note: You should immediately vest the prior year and have no cliff for the three remaining).

Step 4. Negotiate from a higher starting point (I’m a sucker for putting out what I think is fair and having it cut). Be ready to walk with your BATNA. 5-10 percent might not be unreasonable with what you are bringing to the table, especially if this is more of a lifestyle business than a professionally backed startup.

Good luck and don't be afraid to move.

Do not leave such critical things under specified. If the response from the founders goes even slightly short of your expectations you run a real risk of burnout because you have obviously gone over and above for an extended period of time. Make sure that there is a reconciliation on your value add between you and the founders as soon as possible.

Try to also put yourself in the founders shoes and see how you would approach such a situation rationally. Its best to have a number in mind before you speak to the founders and have thresholds on either side representing delight / time to put in the papers.

> I have poured my heart and soul in to the company.

First-- take out the emotional aspect of your contribution (I know this is difficult).

Can you calculate your impact on the bottom line? How did you help them save money/make money?

Breakdown all of your job deliverables-- compare & contrast difference with what they would likely pay at market rates. Based on your brief description, you might easily be the equivalent of a $200K/year guy and a full-partner in the business.

Assuming they agree conceptually-- and recognize your contributions have been vital to the teams success. Give them options (not ultimatums) on moving forward from here.

Just get out. They're exploiting you. Leave, start your own consultancy, poach their clients. You'll probably be surprised how much they're willing to pay.

You are replacable. You can try to give them an ultimatium and threaten to leave. But they may just show you the door.

Even if they don’t now, when things get better, they will probably be thinking about ways to reeuce their risks by replacing you or dividing your responsibilities.

Most people in your position don‘t get much equity. Even if you do, it‘s usually diluted down to nothing with rounds of funding or you never see anything when the company crashes and burns.

I’ve been there more than once. It’s much better to just work for a salary that you are worth and forget about equity.

It’s a carrot used to prevent you from leaving when things get bad.

Also, ask for a pay rise it's been a year dammit.