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0 pointstbrownaw12y ago0 comments

I'm talking 40-60k below market rate, with pitiful stock options to make up for it. I often wonder who would even let themselves be taken advantage of so strongly? Why would any halfway decent engineer take 65-80k with 0.25-0.5% equity?

    see news about $100M exits ==> 0.5% == $500k
    heard mention of a 10% success rate ==> $50k expected value
    $50k == (market_rate - salary) ==> sounds about right

Which of course misses that (1) the utility of large amounts of money isn't linear (expected value doesn't work that way on single occurrences); (2) future money should be discounted by some rate; and (3) your equity will get diluted.

And that the slaray difference is per year, and the equity is a one-time thing. And whatever else I missed.

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Jormundir12y ago

Yeah, though this is napkin calculations, 10% chance of $100M exit is wayyyy too high. I would love for someone to cite a real figure, but I would guess it's less than 0.5%.

Having been through a $50M acquisition with some options, it's really not worth the risk at all. I keep with the opinion: anyone who sacrifices salary for options is a fool. I also suspect the people getting ripped off here tend to be younger people who don't really know what they're worth, don't know just how much money they're giving up.

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