Ask HN: Equity Offer

1 pointapurvak4 comments

I am relatively new to the startup world. As an early employee, I am offered options at a price with a total value of X. For a company of a total of 30 employees, what is a good framework to think about my compensation? I would love to chat with someone with prior experience who might guide me in the right direction.

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You are not being given X, you are getting paper that lets you pay X to get shares worth X. Their value is zero.

At best, they're a lottery ticket. You can look at something like http://www.valuation.vc/ that uses data from other startups, to get an idea of what your odds are that they'll ever be worth something. Usually the odds are not very good.

generally, count equity as a lotto ticket

Sure. That is understood but how do I find out what is the good offer for an equity?

I don't think there is a good answer to your question beside "it is a good offer if it entices you to join their company." I guess you could ask what percent owner it would make you and what your liquidation preference is. Depends on how early you are too.

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