Startup employees: How much weight do you put on stock options?

Question

Do you just treat stock options as a bonus / lottery ticket and focus on overall compensation like salary, commission plan, OTE? Or are stock options an important consideration in assessing employment opportunities?

Do you dive into the strike price and FMV? Vesting schedule? Etc.

Share your perspective in the comments!

Do you dive into the strike price and FMV? Vesting schedule? Etc.

Share your perspective in the comments!

Accepted Answer

I was at a startup that went public, so I am one of the lucky ones, but I will say almost every single one of us there focused on getting a higher OTE vs shares. The shares were a sweet bonus on top but the higher OTE only increases as you move up in your career so it sets you up long term

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Lottery ticket to me...base/OTE, perks and benefits, culture, a strong product, good management etc are all way more important.

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If it’s not real money that I can see in my account then it’s all a gamble. Base and Bonus are actualized dollars that I can spend. Equity is a nice way to hedge bets on futures.

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I think this varies greatly for IC vs leadership. If Im an IC I would focus heavily on OTE and any shares would just be a cherry on top. Most ICs

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Man, I really feel that I need to see my money. In my account. You have no idea how the shares/options will turn out.

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It's part of evaluation criteria. For me it's weighted lower than things like product-market fit, leadership team, ARR growth and NRR, territory, and comp package.

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One of many considerations, but I'm all about the now, so OTE and other items that I'd make sure align to success in the role (market fit, etc) carry more weight. As coups said, equity/options are a lottery ticket. Fun if they land, but it's a chance, not a certainty.

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options are fools gold IMHO, for every company that has gone public and it worked out for the employees theres 100 where the equity never amounted to anything. Don't get me wrong, it is nice to have and should be considered but it's very low on my list of what to weigh when I pick a company

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Options are about to make me rich so

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A nice have, but it really depends on your vesting schedule with them. Base and OTE are the most important thing to me.

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I’m going to negotiate more of anything always because…sales…but I don’t put a second thought into it after negotiations. If it turns into anything, cool. If not, never thought it would so no biggie.

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Dealing with this now. My company is planning on going public in a year but I am not sure if the shares will go up once we go public.

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I think if you have done your research into the company, the industry and competitors to truly understand the landscape and believe it has an opportunity to go public then options should play a large factor in your decision. Of course, making sure your base and OTE will keep your pockets happy for now

CadenceCombat

Startup employees: How much weight do you put on stock options?

How important are stock options in your overall compensation package?

16 comments