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0 pointsseekingcharlie11y ago0 comments

Early stage companies (pre series A, perhaps even pre Seed in your case), cannot afford market salaries - especially in cities like SFBA. Startup compensation includes equity to make up for a below-market salary. Your "risk" is your opportunity cost - is that 2% over 4 years worth the $300-400k you could could have earned as part of a market salary somewhere else?

Ideas are very cheap - worthless actually, if you can't execute them into a product, let alone a product that users will actually pay for.

I don't know your current salary, but it should be a hell of a lot more than $100k in SF. So yes, 2% is low, especially given that it doesn't sound like there is an MVP or demo product existing - i.e. you would be building this as your role. Whether they like it or not, you're technically a cofounder, however as you're receiving some salary, you're not taking anywhere near as much risk and shouldn't receive as much equity as them - assuming they're not paying themselves.

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BayAreaSmayArea11y ago· 1 in thread

Yeah, not SF, not for me. I'm in the southern US so 130 is near the top end for technical, non managerial, positions. The salary offered is a noticeable but not terrible cut.

I've had friends tried to recruit me in other parts of the country and gotten asked if I'm "king of my town" with what I'm making.

Agreed on the cofoundery-ness of it for the most part. They've been working on the idea and getting things fleshed out of the last 9 months and aren't taking a salary. I'd certainly like to make my way closer to the double digit mark, but honestly its tough to put forward much of an argument when the startup world is so capital centric.

mentat11y ago

Getting it fleshed out isn't actually happening unless they're building a real product in that time. Talking to people is not "getting it fleshed out". Assuming 4 year vesting then you're talking about giving up a full year's salary to work on something that has probably a less than 10% chance of succeeding. You're also going to have expectations of your time that are pretty extreme. If you want to do that, you need to participate in upside beyond what you're investing in the company ($90,000 of foregone wages) so that there's actual upside at at least 5x that. Consider you're investing $90,000 with a 10% chance of getting $450,000. Are you going to get that with 2% when that will be diluted 30% each round? Without double digit equity it's almost sure you won't. Even then you need change of control language and an understanding of share classes.

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