Evaluating a job offer?

https://news.ycombinator.com/item?id=125950

by csmajorfive • 18 years ago

13 16 18 years ago

news.ycombinator.com

Hi guys, I'm about to take my first job out of college/grad school and I don't really know how to evaluate my offers and whether it's appropriate to haggle. Also what are some good resources to learn about the mechanics of stocks, vesting, etc?

ardit33• 18 years ago

It is always good to hagle, but with good spirit, and as long as you are reasonable in your request.

Say something in the tune: I like your company, and I would love to work with you guys, but on the compesation part your offer was in the low range. I got an offer from another company, which I like too, and that was 10k higher and I can't just ignore it. I'd like for you guys to come close to it.

They might come back with 5k more, or not. The best position to be, is when you have more than one good choice, and have hard time to decide which one to take. you have a lot of bargaining power, (psychologically), as you can walk away from an offer.

Compesation is not everything, what you do matters to. As for stock options, unless you are one of the first employees of the company, and you are being offered a good chunk of options, they really don't matter. If you are joining a company that is 50+ people, than most likeley options will be insignificat (unless it was something like a future google or youtube, which is highly unlikeley).

If you are joining the average startup, those options will take four year to vest, and they probably wont be worth much. Actually, there is greater chance they will be worth nothing. So, don't compromise your salary for those options. Consider them just as a bonus, or perk. Usually, you have no bargaining power over how much stock options you get (assuming you are joining a mid size 50+ employees company). They often are set by the board, and divided way before (e.g software engineers get this much of options, senior engineers get more, etc...).

mechanical_fish• 18 years ago

I'll always remember my first encounter with employee stock options at a startup company. (Not to be confused with startup founder equity, which consists of actual shares of the company, and enough of them that you're actually playing the game instead of watching from the bleachers. And also not to be confused with employee options at a big Fortune 1000 company, which have a fairly predictable value -- if you're smart enough to exercise them ASAP and sell the stock, instead of pulling an Enron and leaving all your eggs in one basket.)

ME: "I see I'm being offered 10,000 options. What does that number "10,000" mean? What units is it in? What is 1 option worth?"

STARTUP GUY: "It depends on how many shares are outstanding, and what the share price is."

ME: "Well, how many shares are outstanding?"

GUY: "Right now there are, um, something like X shares. I don't really remember. But it doesn't really matter to you at this point, because we can always issue more."

ME: "Um, okay. And if you go public, my options can be converted to shares, which will be worth whatever people pay for them... but we have no idea what that will be, because it's in the indeterminate future, and right now this company consists entirely of debts and handwaving."

GUY: "Right."

ME: "What if you sell the company before we go public? Then our company's stock never formally trades on a market, so I have options to buy something that is never going to exist. How do the options get evaluated then?"

GUY: "Well, the board has to decide how to compensate the existing option holders."

ME: "Hmm. And they can decide to pretend that my options are worth... whatever? Down to and including zero?"

GUY: "Um, yeah. Technically. They'd probably try to make you guys happy."

At which point I decided to never, ever think about employee stock options again. Just pretend they are like those Certificates of Achievement that managers give you when you've worked a lot of overtime -- don't throw them away, but stick them in a file somewhere and forget about them. And, as it happens, that worked out just fine.

rcoder• 18 years ago

This is absolutely right. Options are a lottery ticket, and nothing more.

My brother is currently working an awful, low-paying job with a startup because he has visions of a big stock payout dancing in his head. They continue to nurture and encourage those visions, despite having no prospects for an IPO, and only marginally more for a buyout.

edw5193• 18 years ago

Negotiate a 6 month review instead of the usual one year. If you're any good, you'll get your first raise 6 months early. You may want to say something like, "The salary is not quite what I was hoping for, but I want to get started here so badly, I'm willing to accept it. I plan to do such good work that we'll both see that a 6 month review makes sense." How can they say no to that?

staunch• 18 years ago

I've seen multiple people become disgruntled trying this method. People very quickly forget the verbal deals made at hiring and by the time your early review roles around you might be working for someone else that wasn't involved in hiring you.

I think you're much better off just pushing for the salary you want in the beginning. You're in a more equal negotiating position at that point and it's when companies are used to haggling over salary. It'll be far easier for the hiring manager to argue "We need to bump our offer up $10k to get this guy." than "It'd be nice if we gave Peter a $10k raise right now."

This is due to the same forces that make it easier to quit and get a 50% salary increase at a new company than to get a 15% increase at your existing job.

edw5193• 18 years ago

A verbal deal isn't.

theremora2• 18 years ago

here is some basic negotiation advice http://jobhacks.wordpress.com/2007/08/08/offer-negotiation-t...

regarding the comment to mention another offer, that is cool if you really have one. It wasn't clear if the poster was recommending a "bluff" which is not a good idea at all. More important than the offer is how will the experience increase your value in the market. http://jobhacks.wordpress.com/2007/08/01/career-equity/

icky2• 18 years ago

> It wasn't clear if the poster was recommending a "bluff" which is not a good idea at all.

It can be, if you don't need the job. ;-)

edw5193• 18 years ago

In the long run, a "bluff" is a real bad idea. What right will you ever have expecting open honest communication from someone else if one of the first things you ever did to them WASN'T?

theremora2• 18 years ago

regarding options and anaylysis, Venture Hacks is an excellent resource, here is a specific post http://venturehacks.com/articles/option-pool-shuffle#more-11

mpc• 18 years ago

location? what will you be doing?

csmajorfive• 18 years ago

Thanks guys. The situation is I've got a couple of very similar offers from companies in the < 50 employee range. One is probably 30 people and the other is nearing the 50 line. Both companies are in the bay area and about a year old. Both positions are for software engineering.

As for haggling, the thing is -- they're both good offers. I can't reasonably expect more out of school and they're pretty much identical so I'd be bluffing if I said "well I have a better offer.." I just want to know whether I'm expected to try no matter what.

Retric• 18 years ago

Say, "I have a similar offer from another company and ask them if they can sweeten the deal." Most places will up the offer around 5-10% with a minor nudge. If they don't change things you can still go with them and say I think it's a better option or whatever.

comatose_kid• 18 years ago

If the offers are similar, you should probably focus on how smart your co-workers are and what you will be working on / learning.

mrtron• 18 years ago

The best advice I received was to not focus on money early on as a way of determining what job you take.

Focus on what you will be doing, who you will be working from and so forth. Programming is a skill where a experienced coworker can help you progress rapidly.

Evaluating a job offer?

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