FeelItInMyPlums

Sales Account Executive

Valued Contributor

More Money? or More Equity?

Hi All. I'm a mess right now trying to make a decision and would like the war room's advice.

I'm leaving my current company. 100% - time to go. I have a lot of options, but right now there are 2 offers on the table.

1) 120/120. .05% ownership. 8.7m revenue company, series B (series C coming early 2022), trending towards 15M revenue 2021. 50 person company. I'd be an individual contributor. The tech is something I already grasp and know I'd be successful selling.

2) 140/140. Small company (11m 2020, 30-40m 2021, goals projected at 80m 2022) Company was acquired not too long about by a 8B market cap company. Equity would be a grant of the parent's company stock. The tech is still a step away from me, but the value prop is not.

X Factor:

Company 1: Local to where I live though I'd be remote. Had an old colleague and CEO (who I like/respect) reach out to me promoting the leadership group. Also, I'm not an overly technical seller, and this is a less technical sale than #2

Company 2: More $$. Rocketship of a tech. Although I'm likely a bit underinformed when it comes to the space specifically, I can see spending 2 years here and absorbing the information as a basis for the next 15 years of my career. Also, I have a friend on the inside who started 3 months back who says it's everything it's cracked up to be.

I have til 10/6 to give an answer. Would love to get some additional insight from the war room.

Update: I ended up choosing company 1. Negotiated up to 125/125 with .075% equity. The desire to not have to travel 2-3 times a q just to meet up with my company for internal stuff (I have 2 young kids) made me choose the local company. And hell, if we hit unicorn I'll have $750k in equity.

Money v Equity

Attached poll

Company 1 - 120/120 + .05% equity. Company 2 - 140/140 + friend on the inside. Don't rush it. Neither is perfect and hold out for something better

*Voting in this poll no longer yields commission.

☁️ Software Tech

💰 Compensation

31

34 comments

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UrAssIsSaaS

Arsonist

13

SaaS Eater

If you trust your friend I take company 2 all day long. You can learn the tech/industry. You dont know if youre being sold a pile of shit with #1 or not, #2 you know is good.

CaneWolf

Politicker

3

Call me what you want, just sign the damn contract

Exactly. 3 months is a bit early to be sure your friend knows what he/she is talking about but that's better. Also, stock grants!! are dope.

FamilyTruckster

Politicker

7

Exec Director, Major Accounts

Take the real cash. Invest the extra 1,500/mo and odds are you’ll get a better return over time than the equity.

InQ5WeTrust

Arsonist

5

No marketing, mayo isn't an MQL

#2 seems pretty strong

StringerB

Politicker

5

Senior Account Executive

Equity won’t be worth 90% of the time. So unless you have a ton of belief if the company and leadership I’d go with option 2. That being said, if you truly believe this will be a unicorn, maybe take that risk.

CuriousFox

WR Officer

3

🦊

Agreed. At the end of the day, we can't tell ya what to do friend.

FeelItInMyPlums

Valued Contributor

0

Sales Account Executive

even at Unicorn status equity would only be $500k. Not life changing (but still very nice)

StringerB

Politicker

1

Senior Account Executive

500k at once is definitely life changing to most people. Even sales people

FeelItInMyPlums

Valued Contributor

1

Sales Account Executive

Yeah but that's assuming a) unicorn. B) no share dilution. C) before tax. 250k cash can help you make a big life move, but it isn't life changing. With the world we live in, realistically you will need 3.5m to retire comfortably.

StringerB

Politicker

0

Senior Account Executive

We have very different lives lol, but you’re killing it though

DungeonsNDemos

Big Shot

0

Rolling 20's all day

You gotta listen to your plums.
Great points!

jefe

Arsonist

0

🍁

Agreed

hh456

Celebrated Contributor

2

sales

#2.

Diablo

Politicker

2

Sr. AE

As you are 100% confident that you want to move out, I won't think about point 3. #2 for me considering the company is growing (that means it's selling and I'm sure you are a champ in selling), equity which will only grow (in valuation), known source in the org.

Kinonez

Celebrated Contributor

2

War Room Enthusiast

Company #2 for the short run, #1 for the long run.

Do.it.for.the.checks

Politicker

2

Account Executive

Math time!

So option 1, IF they became a unicorn and you fully vest in 4 years. You'd make 500k. This is high risk however. Factor in 50% of startups fail within 5 years, that if you assume a 15x multiplier you'd need to be worth 66 mil rev which at 15 rev today requires a annual growth of 44%, and that leadership and PE specialize in certain size companies i.e. 1 to 10, 10 to 30, 30 to 50, 50 to 100 (meaning change could happen).

Or take the extra 40k and invest in a moderate aggressive account at 6.5% and net 140ish.

The question becomes this would you bet 140k on a single company to net 500k?

Sunbunny31

Politicker

1

Sr Sales Executive 🐰

Honestly, two solid offers, though I like 2 better.

FeelItInMyPlums

Valued Contributor

1

Sales Account Executive

Wow I'm honestly surprised 0 people commented on the fact that #2 is a deeper tech!

MoneybaggYo

Good Citizen

0

Enterprise SDR

Yeah the actual selling of the product is what’s gonna get him that second number lol people forget about that

Justatitle

Big Shot

1

Account Executive

Option #2 seems to be better but the fact that your friend has only been there for 3 months means it's still the honeymoon phase so take their feedback with a grain of salt. In this case I believe it really depends on what you are looking for. Rocketship pros are obvious but the cons are not. They include the following. they will be rapidly hiring which means more mouths to feed accounts to and there will be a learning curve. It's easy to become a number and not have as much of an impact as you may like and their goals are lofty which is great but there is no guarantee to the future. My best advice to you would be to trust your gut, it rarely steers you wrong. Best wishes in the DM process

goose

Politicker

1

Sales Executive

More money.

SaaSam

Politicker

1

Account Executive

I had my answer the second you said an old CEO who you like and respect promoted the leadership group. Culture is a big thing to me now as I've learned that lesson the hard way.

DungeonsNDemos

Big Shot

1

Rolling 20's all day

From what you described I would recommend #2. Equity is potentially a long shot and having a friend on the inside at the other to give you the truth is worth it's weight in gold.

Also, I will take whichever offer you don't want

desperado

Big Shot

1

Taking A Break

Equity if you can structure as follows: Set vesting cliff to 6mo. Front-load 40% of allocation to year 1. 20% to year 2. 20% to year 3. 20% to year 4. Argue 3mo cliff for Y1 and vest monthly starting at Y2 and ending at EoY for Y4

WomenWantMeFishFearMe

Politicker

0

AM

I like equity

Elepin

Opinionated

0

BDR

Me too

payton_pritchard

Executive

0

RSM

#2 Ask your friend a couple more questions to confirm but sounds like the better option.

Most equity ends up being worthless, the success stories are great and more visible but those are the exception not the rule. Even if there is a "successful exit" dilution and share priority means less money for you especially if you're not VP level or above with meaningful equity

LordBusiness

Politicker

0

Chief Revenue Officer

I'd have to know the products to give you my actual advice - but I'd lean towards number 2. You have a friend giving you the real deal on the inside, they are growing fast as hell, so they have to be doing something right, its $40k more actual dollars (before over performance). 99/100 times equity is worthless.

RedLightning

Politicker

0

Mid-Market AE

Both seem like great options and the fact that you have existing relationships is huge. Which buying persona do you resonate better with and money aside where do you want to be in 2-3 years?

Equity is great in theory, but you'll get diluted heavily along the way. Also, you're banking on the acquisition or IPO scenario.

Assuming you hit OTE at both over 3 years, there's a 120K difference in earnings. You're company will need to get acquired for 24 million at year 3 for it to break even for you

dwightyouignorantsale

Politicker

0

Account Executive

I appreciate this math. Def #2

dwightyouignorantsale

Politicker

0

Account Executive

Having a friend there that can vouch that it’s a good place to be is worth absolute gold. So many companies sell the dream, not the reality, when hiring salespeople on. Therefore #2 gets my vote!

bellaccione

Valued Contributor

0

Growth Consultant

Always go for equity.
And if your friend confirms - this is actually a no brainer.

Wealth is not generated by income, it's generated by equity in an income-producing asset

AnchorPoint

Politicker

0

Business Coach

No brainer if the friend is truly a friend and not just someone you "know".

Flippinghubs

Opinionated

0

Account Executive

ill echo some similar sentiments for company #2

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