| You may wish to read: https://danluu.com/startup-tradeoffs/ and https://danluu.com/startup-options/ Quoting danluu : There are a number of factors that can make options more or less valuable than they seem. From an employee standpoint, the factors that make options more valuable than they seem can cause equity to be worth tens of percent more than a naive calculation. The factors that make options less valuable than they seem do so in ways that mostly aren’t easy to quantify. Whether or not the factors that make options relatively more valuable dominate or the factors that make options relatively less valuable dominate is an empirical question. My intuition is that the factors that make options relatively less valuable are stronger, but that’s just a guess. A way to get an idea about this from public data would be to go through through successful startup S-1 filing. Since this post is already ~5k words, I’ll leave that for another post, but I’ll note that in my preliminary skim of a handful of 99%-ile exits (> $1B), the median employee seems to do worse than someone who’s on the standard Facebook/Google/Amazon career trajectory. From a company standpoint, there are a couple factors that allow companies to retain more leverage/control by giving relatively more options to employees and relatively less equity to investors. All of this sounds fine for founders and investors, but I don’t see what’s in it for employees. |