Comment by stuckonempty
4 days ago
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
Lottery tickets still have value.
Usually negative value.
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.
Probably not, because even in the 1% when the startup succeeds, there is probably some gotcha. It will turn out that your share was diluted, or your shares are not priority shares unlike the shares that your boss owns, etc... unless you are an expert, you have no idea about the dozen ways you can be screwed even in the unlikely case that the startup succeeds.
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.
> just that it isn’t uncommon for options to be worth a lot.
You're deluding yourself here. On average, the vast, vast majority of equity options, _especially_ in the VC backed tech world, turn out to nothing for the employee.
You literally built a tool because there's so many variables, and in the majority of cases, all these variables do not align in a way that results in a payment.
This is almost the literal definition of "uncommon". It is uncommon for options to materialise into a large amount of value for employees.
I respect your tool, and I respect what you're doing. But you need to be honest with yourself and the rest of the world. If you want to help young or new people in this area, then don't perpetuate the myth that startup tech company options are statistically any better than a lottery ticket.