Comment by codingdave
4 days ago
> figure out the real value behind the equity.
Zero. Equity is a bonus in case things work out. But for the purpose of deciding on offers - zero.
4 days ago
> figure out the real value behind the equity.
Zero. Equity is a bonus in case things work out. But for the purpose of deciding on offers - zero.
While I think it’s good advice to live as if the equity is worth zero, treating all equity as if its worth nothing, seems a bit over-reductionist when equity packages can routinely be worth millions of dollars.
Obviously it’s a crapshoot and should never be seen as a guarantee, I think treating it as zero is bit too far on the opposite extreme.
How did you get to equity packages being “routinely” worth millions when tech startups fail somewhere between 75% and >99% of the time (depending on estimates)?
Seems far more likely that startup equity will be worth zero to typical individual contributor employees, not millions
Case in point: 2 years ago i interviewed at a number of places with mind boggling valuations and most of the places I got offers from either no longer exist or laid off half their staff. It’s a lottery
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By your own measure, if startups fail 99% of the time, shouldn't one value a $1M equity as $10k bonus? "Zero" does seem extreme, agree with the sentiment that "it's less than you think" but if you get lot of equity in a series-C startup, I wouldn't say that's equivalent to 0.
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Of course most startups fail, and most equity is worth nothing.
I guess I didn’t think “routinely” implied a specific percentage, just that it isn’t uncommon for options to be worth a lot.
If even 5–10% of VC startups succeed, then it’s still worth considering the expected value of the equity when comparing job offers.
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You'd be remiss if the company is growing and has an IPO schedule. The uncertainty over equity reduces over time. Some people hop from pre-IPO company to pre-IPO company.