Ask HN: Equity Offer

1 points by apurvak 4 years ago | 4 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.

SaberTail 4 years ago |

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.

sethammons 4 years ago |

generally, count equity as a lotto ticket

apurvak 4 years ago | |

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

sethammons 4 years ago | | |

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.