The War Room
Advice
Post

Tell me about equity!?

For those of you that have been given EqUiTy


Good experience or bad?


What advice and wisdom would you share with new sales reps being enticed with .003 percent of the pool with a 1 year cliff?

☁️ Software Tech
πŸ’° Compensation
2
brotato
WR Lieutenant
+9
Head of Sales
Equity is almost always useless. Negotiate for performance based equity instead of standard vesting, and don't expect much after the multiple rounds of funding dilutes your equity holding.
LoneMaverick
Opinionated
+3
Strategic Account Leader
It depends on the company. Β 

The vast majority of companies never go public or get acquired making those shares essentially worthless.

Even we'll known unicorns can fail to launch? I've been burned there.

I've been apart of three a tart ups.Β 
1) One ended with an Aquisition (did okay)
2)Second one failed to launchΒ 
3) My current company is preparing to IPO in a few months value of shares around 500k

It can be great but don't give up OTE for something that likely will never happen.
Stringer
Arsonist
+8
SDR
Depending on how early you are in the company, you can negotiate owner's share. I was employee #5, I negotiated 2% of Owners Shares, meaning when they execute, I don't have to pay for my shares, they are given to me.Β 

The employee pool stock option gives you the opportunity to purchase at a set rate when they execute.

If you like that company and the compensation is already good, it can be worth it. If the company gets valued at 10MM (low valuation), your .003 stock option is worth $30K upon execution. That's a quick 1-year vesting period, definitely worth it. If it was a 4-year vesting period and the pay was low, it wouldn't be worth it. You want the valuation and execute price to be 1/2 or more of your salary. Which takes some prediction on your end, but $30MM valuation which is not crazy, is $90K. That's a quick house dp, new car, or investment money.Β Β 
LordBusiness
Politicker
+7
Chief Revenue Officer
Are they asking you to trade something for it. Like in replacement for a pay increase you deserve, or an adjustment down on your compensation? Equity is sweet, but 99.999% of the time it’s relatively worthlessΒ 
4
Negotiating equity package - what to look for??
Question
9
3
Experience with Private Equity Spinouts
Question
3
11
How much equity to ask for?
Question
16