Comment by senordevnyc
6 years ago
Agreed. People are madly in love with working at companies like Stripe and Airbnb right now, but I'm not convinced the risk is worth it. They're giving out equity as if it's liquid, but it's not. So if I can get $200k per year in equity from Stripe or $200k per year in equity from Google, why exactly would I choose Stripe or Airbnb? Just in the hopes that the $200k will end up worth $400k or $800k? I mean, maybe it will, but that feels pretty speculative. Put another way, if you already worked at Google and had the opportunity to invest cash into those companies, would you put all your equity comp in Stripe or Airbnb?
In the example where you have equivalent equity packages available at Google and Stripe/Airbnb, I think you're right -- it's hard to see how equity that has an uncertain liquidity horizon is equal in value to Google's, which you will definitely be able to sell in a year. However, I've found that offers from these companies compensate for that -- Stripe/Airbnb will offer more in equity than Google precisely because of the liquidity premium. Then it comes down to, how much of a liquidity premium do you demand as an investor?
Google at least is insanely profitable. Are Stripe and Airbnb?
Seems to me that there's less risk in the Google stock than the others, because the others need a lot of potential future upside to justify their high valuations absent major profits, and if that upside fails to materialize the valuations will tank (as we're seeing with, e.g., Lyft).