[hkmurakami]

Great answer. I'll just add an anecdote where I was in a fairly similar role/situation as this fictional example of Robert.

The equity grant # was about #350 at a post Series B startup that would exit for about $1B later that year. My stake in the company was 1 basis point (0.01%).

Equity grants loosely follow an exponentially decaying pattern.

[w1ntermute]

So your 1 bp grant was basically a year's salary for a junior engineer in the Bay Area. What is the advantage of joining such a large post Series B startup (which could still face a down round or layoffs before the exit) instead of AppAmaGooFaceSoft?

[landryraccoon]

There isn't one. If you want to join a startup and do well you have to be willing to join when they're paying lower than market salary, desperate for help and nobody's more than 50% sure they'll be around in 2 years. If you can't handle that then a startup isn't a great proposition for you.

[abalone]

It's probably a lot less than even that because, having joined less than a year before exit, the strike price would be far from nothing.

Having said that, you can only say there's no advantage in retrospect. If it had become a $10B or $100B company, 1bp would be substantial. And if the exit was a stock swap then perhaps the potential is still there.

[hkmurakami]

1) This was back when the economy was much worse than it is today.

2) I was a young desperate 20 something who didn't know better. ;)