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Comment by stevesthrowaway | Hacker News Reader

throwaway acct here. I left a flagship tech company with $500k total comp and joined a startup as engineer #1 with 5% options over 4 years. My salary is current $120k and I'm losing money each month, although I've been promised that will changed as soon as we raise more.

We are going to raise a Series A in the next few months. I know a little bit about this stuff, but not enough that I'm confident in exactly what to expect over the next few years, nor enough to know that I've negotiated properly (thought I did lol) and are protecting myself enough. This thread is scaring the shit out of me. I have a good relationship with the two founders and not afraid of being candid with them. Would appreciate any advice.

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You should be candid with them that you're uncomfortable with the cash portion of your comp.

5% is an unusually high % of equity, the founders likely assumed you were happy to trade-off cash for equity. Series A is usually a dilutive round and it's normal to grant people like yourself more options to compensate for the dilution (i.e. to keep you at 5% of the new cap table).

My 2¢: I know people in your position who have ~$200k cash comp in addition to meaningful equity. Don't feel bad about asking for more cash, if your founders have a good relationship with you and you're providing value for the company, they'd rather invest the marginal cash in you and keep you happy + comfortable.

> I know people in your position who have ~$200k cash comp in addition to meaningful equity.

That's great, so long as its taken within the context of "200k is way more than the average US engineer makes without any equity"

Thanks, I feel a little better about the situation. I pushed pretty hard for the equity. One of the founders knew me and sought me out, so I leveraged that a bit. When I signed on, the plan was to raise a new round within a 2 months, which would be accompanied by a bump. But for reasons not worth getting into, we waited about 9 months. I padded my bank account in preparation, and I'm just about to tap into savings, which I really want to avoid.

I just told them I need around 200 to be comfortable. And that's the truth. Response was good, and they can't match that now, but they will. I'm working for good people I trust. And we are building some pretty awesome tech that are much needed in our industry.

That's good! As long as there's mutual trust, honesty and transparency are always the best strategy. Wishing you the best on your fundraise!

5% is insanely high based on the founders I surveyed personally (probably around 50 at this point) and generally available info from hiring pros. They must really value you. Cash comp is probably low (depending on the locale ofc) but i dont know how much money you raised.

hate to blow your bubble but this sounds like a bad deal. do you even know the denominator on equity? look at liquidation

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