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I recently applied for a job that in the Posting said 60,000 - 90,000 (Provides equity). I have Gotten past the first two interviews and am heading for my third this Friday. During the interview process they said multiple times that they were a start up. I'm worried that they aren't going to pay me a salary, just a percentage of what they make, is this true?

closed as off-topic by gnat, keshlam, mcknz, Masked Man, Chris G Nov 28 '16 at 16:31

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    You should probably ask them, not us. – Erik Nov 16 '16 at 15:50
  • it could be that they may have trouble to pay salary on time, or that they expect you to do a lot of extra hours, or quite a lot of things that we can find in start-ups usually. We can't read their mind. – Walfrat Nov 16 '16 at 15:55
  • Ask them clearly. However, if you are really interested in the job, accepting to be paid with Equity is showing that you trust the start-up to grow in the future years, and is a positive sign for the employer. Refusing to be paid, at least in part, in equity, could be seen as a lack of interest for the company's growth. Ask them to clarify how much cash you will get, and the modalities to turn equity into cash, were you to need some. – Thalantas Nov 16 '16 at 15:57
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    The way I read that is "We will pay you 60k-90k plus shares in the company. – Kaz Nov 16 '16 at 16:10
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You already kicked two interviews and you're scheduled for a third. Go for the job.

  1. If you don't get the job, then the subject of compensation for the job is irrelevant.

  2. If you do get the job, your prospective employer will have to put their offer including the compensation aspect in writing. At this point, everything about compensation should be clear to you.

They repeatedly said to you that they are a startup. It's probably translation for "we can't afford to give you the salary progression that you might expect". Keep your resume handy and up to date while you're working for them. If you choose to work for them, that is.

Reading your post, it's pretty clear to me that they'll pay you 60000-90000 and stock equity which has a 90% chance of turning into scrip given that 90% of startups fail. Whether you can afford to live on 60000-90000 is for you to determine.

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"Equity" would mean that you will become owner of a (likely very small) share of the company. So if the company goes bankrupt, that equity is worth nothing. If the company gets sold for a ton of money, it will be a lot.

You will get a salary, and the equity will be on top of that. Your salary may be (likely will be) a bit less than you could get elsewhere, but you will be paid a fixed monthly salary. You will not get a percentage of the earnings. Many startup companies are sold before they manage to make money (if someone believes there is the potential to make money).

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    Many more startup companies simply fail and close down. – Oded Nov 16 '16 at 16:03
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Equity is typically in the form of stock options. When they go public you can exercise your options at a set price that is hopefully lower than the public price.

Outright equity is not always a good thing and then you would have part of the debt if they are in debt.

Check with the company. A salary and stock options is pretty common with a startup.

And you need to be careful as they could award you 20,000 stock options at $x and end up awarding too many that they do a reverse split and your 20,000 options become 2,000.

Stock options are also a tax advantage to the company.

  • Equity as stock options is generally only for publicly traded companies. Review the compensation section of your agreement carefully. Consult an attorney if you're confused in any way. $300 for them to review it can make tens of thousands in difference later. – Wesley Long Nov 16 '16 at 18:02
  • @WesleyLong I am been with two startup and both were stock options. That is common for pre IPO. Once a company is public you it is more common to award actual stock but with a vesting period. – paparazzo Nov 16 '16 at 18:07
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Did they ever say that statement about being a startup in relation to salary. Because there might be plenty of reasons for people there to mention it. Most commonly it's mentioned to prepare you for the hectic state the company is in while trying to find a form of survival.

Eventually you will receive an actual contract proposal that will explain your and also their responsibilities. This should make your salary obvious and you are always free to decline it when it does not feel right.

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Usually, postings like this - if they're mentioning equity that soon - mean they're paying less than market rates, and want to entice you with the idea of the option of being a part-owner. The stock options game has been done to death with startups - it's high risk, and because it's only options, you have no say so if the company leadership torpedoes any chance of those options ever paying out.

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