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/biz/ - Business & Finance


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58657200 No.58657200 [Reply] [Original]

Hey /biz/ bros, halp bls. Any VCs or startup wizzards help a brainlet out? I've been offered a job at a pre-seed startup, the company has novel IP regarding decarbonisation of flue gas. I've been offered an average salary plus 0,5% options on a 2 year vesting schedule. Is this pretty usual? Should I holdout for moar? There are two founders and I'd be the first proper employee. Cheers fags

>> No.58657232

>>58657200
I showed you my Jason Parser, please answer me

>> No.58657242

>>58657200
0.5% options? what

>> No.58657246

>>58657242
so if your company gets acquired for $1m, you get $500?

>> No.58657252

>>58657242
0,5% equity in the startup, in the form of options that vest after 2 years. If this doesn't make sense to you(it barely does to me) I'm not sure you're my target audience, but thanks for pitching in fren

>> No.58657256

>>58657246
I think you missed a decimal place, half a percent of €1.000.000 is five thousand

>> No.58657317

>>58657200
First few employees for software is usually low single digit. However that's for software, I think hardware stuff is lower.

If they haven't raised it is more important to get real equity instead of options. Trust me on this, especially if they sell the company later. If you get equity, when they sell 5years later, make sure to talk to a really good tax accountant familiar with startups, find one in SF, I cannot understate the importance of this part.

Options are bullshit if it is preseed. I'd also ask if they're willing to do more equity with a 4 year linear vesting w a 1 year cliff, tell them you'll grow w the company and are motivated to build value (only go for longer vesting if they give you *at least* 2x more ofc).

>> No.58657422

>>58657200
How’s life after 30?

>> No.58657888

>>58657200
Love the meme lmao

>> No.58657912

Do you have double-trigger acceleration on your options?

>> No.58659163

>>58657317
I'm back frens, different device, same brainlet. Thanks for the halp. This sounds really great info, thanks. You think I should ask for 2% and maybe get beaten down to 1,5%?
>>58657422
I've got morning glory, but life's a different story
>>58657912
I believe so, this phrase was mentioned (double trigger was, I don't remember acceleration per se) but I just nodded and said I understood (didn't want to seem dum). They said no-one does single, so it didn't seem worth admitting to

>> No.58659454

>>58657200
>2 year vesting schedule
does it accumulated over time or is it all or nothing?
what are the clauses if they fire you, what happens?
what about if they "retire" you, let you go?
What if they sell the company, are your sharess ecured?
tl;dr talk to a lawyer.
also if you're not getting a good salary on top of this you're getting scammed.

>> No.58659543 [DELETED] 
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58659543

>>58659454
equity in startup not crypto

>> No.58659900

>>58659163
I'd ask for at least 1%. idk if 2% is a good idea, depends on your skillset and whether it is in demand and how much they need you. If they really need you and can't easily find others, or if your gut feeling is they're flexible and expect negotiation. I can't really tell without being in the situation and observing. I do know hardware is expected to be lower though, I am more familiar w software.

Definitely ask for equity. I don't see why they didn't offer it. Did they raise any amount of money yet? If so, can they get the 409a low enough where you can just cut a $500 check for them and get equity instead of options? Preseed should be flexible.

>> No.58659927

>>58659900
Thanks fren. I'll throw this back in their faces and threaten to walk and take a copy of the IP with me. That's hardball, right? Then we sit down and come up with an equity number rather than options

>> No.58659929

>>58659900
I'm not saying they should do a 409a just for you, but I'd assume a low valuation and cut them a $500 check for the vesting equity and just assume a low 409a if they did get one. If they haven't raised it is possible they are noobs at startups and 100% they should give you equity.

>> No.58659945

>>58659927
Don't go hardball. Startups are delicate. It is like getting married. Offer your benefits and see how much they believe in it. Tell them you want to be super committed and say everyone says this is the standard for first employees, but you are interested.

>> No.58659952

>>58659945
ok got it. I've got the weekend to sign so I'll go back to them first thing Monday and say all this. Absolute gold, fren. Thanks a lot

>> No.58660127

>>58659952
If they are legit retard noobs w startups, the most important thing w equity is to file your 83(b) in time. If you get equity, make sure to do it and make sure they did it too.
No problem.

>> No.58661610

>>58659900
Just to piggy back on this: If its pre-seed, options are basically worth 0. You can't check valuations on crunchbase, there is 0 liquidity for them, too far range of outcomes.
You should straight up ask for equity. Remember though: You will likely get diluted at each successive round, to the point where 0.5% will quickly turn into 0.01%. Also remember that the IRS treatment of this shit is retarded, look into 83b) schedule or make them explain it to you at the meeting. If they themselves cannot explain it to you its bad faith and they want to scam you.
How senior are you in terms of employment? If you are skilled enough where you could get above market rate I would take that, remember the base rate for startups failing vs successful exits. If you are younger and you can afford to take a risk, put some extra title on your LinkedIn, have more management responsibilities would be good.
Lastly, you should ask for the exit plan: IPO? Strategic acquisition? IP licensing? Each one has different parameters for how you will exit out of your equity. For this IP license/Strat acquisition seems likely, usually safer than IPO.

>> No.58661612

fuck chainlink mang