I'm getting a bad deal at my startup - how do I renegotiate my salary and options?

https://news.ycombinator.com/item?id=13801

by notagreatdeal • 19 years ago

11 14 19 years ago

news.ycombinator.com

dpapathanasiou• 19 years ago

This might be of interest to you: http://www.negotiations.com/articles/geeks-earning-more/

It's geared more towards working at an established company, but many of the principles are the same.

notagreatdeal• 19 years ago

More details:

engineer number 6, employee number 8. joined pre-series A

salary: 75K, .5% of the company, location: bay area

engineers 1-5 have lower salary, but 3-10% of company

recent (useless, IMO) VP hires are making six figures with a larger % of the company. they joined after raising series A.

patryn20• 19 years ago

Seriously? People make that little at these startups? I understand making that little pre-funding, but you would expect to be paid in sync with the cost of living in those areas after the company has been funded.

You can't even rent an apartment on that out there, can you? Unless you have a roommate.

I am not saying I expected too much more, but thought at least $90k for anyone with any degree of talent would be reasonable.

I mean, crap, $90k would still be WELL below median income for experienced software engineers in Silicon Valley, wouldn't it? Salary.com seems to indicate it would, but that could be a biased source.

omouse• 19 years ago

Who hired the VPs and why? Do the other employees feel they're useless?

lindsayrgwatt2• 19 years ago

Two thoughts for you: 1) What do you want - and more importantly: why do you deserve it? If you can't justify why you deserve more than a VP like that, then you can't justify it (Most powerful words in a negotiation are "where is that number coming from?")

2) What is your BATNA? That's jargon for "Best Alternative for a Negotiated Agreement": if you don't get what you want what will you do? Will you walk away? Is your company f!cked if you walk away?

Hopefully this can frame your thinking.

lindsayrgwatt2• 19 years ago

Dude,

Here's another way you might be able to justify a re-negotiation.

Think of what value your company will have five years from now if it gets sold/goes public, etc. Let's say it's $100M; your options are worth $500K.

Now think of how much you'd be making if you weren't at a startup. Let's say it's $95K.

If you took your $20K and put it in the stock market and earned 7% a year on it (that's almost a sure thing as that's the historical yield on the market), you'd have $115K.

Now how likely is it that your startup is going to be worth $100M. Let's say it's 20%. Then your $500K is worth 0.2500= $100K.

From that perspective you'd be better off working somewhere else under your current employment contract.

I have no idea if these numbers are legitimate in your case, but it could be another way of you getting a better deal.

Let me know if you want any more ideas.

Reply

staunch• 19 years ago

I think the biggest question is how much does the company need you. If it wouldn't hurt much to lose you, you don't have much room to negotiate and pretty much have to rely on generosity.

Reply

dhoward• 19 years ago

Realistically, you probably can't.

If you go to the founders and threaten, they'll probably fire you. They got funding now so you're replaceable with somebody who will accept post-funding equity.

If you go to the founders and beg, they'll probably talk you out of it. They won't increase your compensation unless they see an increase in value.

If you go to the founders and say, "Tell me what I can do to really help the company" and then work like a dog to become an out-and-out performer, they may (repeat, may) appreciate your outperformance of the rest of the team and want to give you a big equity boost. It's hard to hate a total coding monster and you have to be a bad person to want to cheat somebody who will kamikaze himself for your company. Still, you have to do that for several years and really become the guy that they say, "If we only had three more guys exactly like him!" And, in the end, expect it to take years to build up a decent equity position and realize that they don't have to give you anything. And, of course, you've got to be a total coding monster.

Reply

Goladus• 19 years ago

I realize this doesn't quite apply to your post, but I'd just like to point out that the "hard to hate a kamikaze" mentality doesn't always apply in a corporate environment. The people you'd be negotiating with may be too preoccupied with political maneuvering to even notice.

Just a warning to anyone who might take that logic and apply it somewhere other than a startup.

Reply

create_account• 19 years ago

In fact, it's downright dangerous: if you want to get taken for granted by your corporate overlords, that's the way to do it!

Reply

timg• 19 years ago

I can't help but to think that the founders can be made to act more like needy girls. Make them want you, make them think that they are about to lose because everyone else recognizes how valuable you are. Make them think that they could not go on without you.

More importantly though, working like a dog for years just to impress your for your employer!?! This is not the startup way.

Reply

jaggederest• 19 years ago

Try just asking.

Present yourself in a reasonable light, have coffee with one of the people in charge, and just mention that you feel you're getting something of a raw deal on equity. If they're decent, they'll fix it, and if not, you don't want to be there anyway.

Reply

prakster• 19 years ago

jaggederest is right. Sometimes we get too bogged down with planning, researching, positioning, etc. Just have an open discussion. This will save you a lot of time and will get you to a happier state of mind.

Reply

wehriam• 19 years ago

Go in with leverage and be ready to walk. By telling the employer you're unhappy with the compensation, you force their hand.

If they choose or are unable to increase your salary or equity, they will (correctly) assume you are not satisfied and likely will not meet your full potential. While there may be no immediate consequences, this will have long term effects on your relationship with the company.

That said, fortune favors the bold! The thread has some fine advice, good luck.

Reply

I'm getting a bad deal at my startup - how do I renegotiate my salary and options?

Related Stories