Ask HN: How to consider startup offer

https://news.ycombinator.com/item?id=4009830

by skippa • 14 years ago

1 2 14 years ago

news.ycombinator.com

I'm thinking of joining the startup and have got an offer. Now I would like to better understand the financial part of it, putting aside startup culture, fun, idea etc.

I do know what I will be missing in terms of cash if I change jobs. How can I approach evaluating the equity? If I'm getting 0.X% of stocks of the company, how can I decide if this is worth it? What are some common mistakes I can make here?

harrywye• 14 years ago

I'm no expert in this area, but I just stumbled upon your post. Depending on the stage of the startup (and, importance of your role), you might get 1/4% or 1/8%, which is sort of standard, in my understanding, for early employees. But, these numbers do not really mean much, since your share will be diluted and diluted, and diluted, as the startup gets more funding. The cash equivalent of your option is close to zero at this point, so I wouldn't optimize for the option. (As for the valuation of the startup, if it has been funded, then there should generally be valuation based on the previous round. You can always ask the founder(s) and, I presume, most of them will be candid about it.)

gus_massa• 14 years ago

Get enough money to be happy because the startup probably will close and the equity probably will worth nothing. But remember to take some equity just in case they are the next Google :).

Some ideas about how much equity you should get, by Joel Spolsky: http://answers.onstartups.com/questions/6949/forming-a-new-s...

Ask HN: How to consider startup offer

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