I've joined a startup an year ago as #1 full-time employee (the team is small, we're 5 employees and the 3 founders), and at the beginning we've stated a pretty small percentage of equity (less than 2%) after a two years vesting and some other conditions.

The team is great, the environment is cool but the future is uncertain. In this year I've added a huge value to the company and now I don't think that the equity we agreed on are fair.

At the moment the company is going through an hard period (the marketing seems to be not so skilled) and I don't think we will meet the goals. Not sure if we're going to make it through another couple of years (and I'm probably not going to take any equity at all).

Last week another company called me for an interview and I accepted.

In case of an offer the only thing that will probably make me stay is a bigger and immediate share (4-5%), because if I have to sink with the ship I don't want to sink as a sailor.

Is that a fair reasoning or it sounds like a threat?

  • 1
    Where is that 5% coming from. But still voting to close "what to do" question. – paparazzo Jul 1 '16 at 17:28
  • 3
    What is your thought process here? What possible good will the equity do you? – Lilienthal Jul 1 '16 at 18:21
  • 1
    You ask for whatever you want. if they can't pay you then you can ask for 20%. If the company isn't doing well that % is only worth a % of that number in real dollars. There is no threat. Ask for what you want. If you don't get it, leave. – blankip Jul 1 '16 at 19:29
  • 1
    @Paparazzi - then you leave. Either the equity is enough to keep you or it isn't. If OP thinks it is a fair trade off there is no reason he shouldn't ask. For instance if it is software and he writes 90% of the code and the only person that can pull them through... the founders will have a lot to think about before telling the guy off. – blankip Jul 1 '16 at 19:42
  • 3
    If the company is doing badly, they will probably be delighted to be able to retain you with worthless stock rather than cold hard cash. – Carson63000 Jul 2 '16 at 0:03

It's not possible to tell you what to do - only you know what risk is acceptable to you.

Personally, I see no reason to stay if it's a sinking startup. If it goes under, it doesn't matter how much equity you have - 10% of a bankrupt company is still $0, just like 2%.

To make me consider staying, I'd need an immediate, significant bump in salary, not extra equity. If the startup is failing already, there's probably not much of a chance for this to happen.

Even if you get a raise, what are the chances that you staying will save the company? If not very high, then you pass up on your new offer, get some more money but you'll end up losing this job anyway and you'll be back on the market and you'll be looking for a new job again.

| improve this answer | |
  • He did not say sinking. He said marketing is not skilled and not making goals. If could be a product he feels good about with a huge upside if it hits and will know in the next two years then staying around for a good bump may be worth it. OP implies he would stay for 5%. – paparazzo Jul 1 '16 at 19:10
  • @Paparazzi You're right, I assumed from his wording and from past experience. Even if the startup is not sinking, I think what I wrote still applies. Unless the startup is really doing well, in which case more equity is a good choice but that's not how the question reads to me. – xxbbcc Jul 1 '16 at 19:16

My first job in the computer field the company was with a company that while I was there started the process to go public. I found a new job during this period and they offered me 500 shares at $5 a share to stay. I declined. Two months later the company went public at $.48 a share.

If you have a concrete offer for a more stable company I would take it. Good Luck.

| improve this answer | |
  • This may be a huge coincidence, but years ago I had a colleague who had owned shares valued at $48 in a startup, and he decided to sell them at $50. He ended up selling at $2 :-( – gnasher729 Jul 2 '16 at 12:27

If you get an offer that you are prepared to accept then you have two options

  1. Ask for bump

  2. Turn in your resignation and let them ask what it would take for you to stay
    You can hint at it with "I like it here but the offer is more money and here I am at 2% of payout at risk."

The problem with 1 is that is they will have no urgency. They will feel like they have 30 days. You almost need to resign or tell them you have a hard job offer you are considering to get a quick response.

And you need to consider they may need to take in another investor and you will get diluted. Go in at the high end and be ready to take job offer. Or go in at 4% and you will not be diluted. Any investor money needs to come out of founders share.

Given you have 3 investors with 80% and one at 10% now way they are going to give more than 6% unless you are absolutely critical to the company. Immediate vesting at 4% is still more than double what you have. And I don't think that would come off as a threat. If 6% would probably not come off as a treat but most likely a no.

| improve this answer | |
  • Down vote care to comment? – paparazzo Jul 1 '16 at 19:03

Not the answer you're looking for? Browse other questions tagged .