[dshoemaker]

Note: my experience is in private equity from VC backed companies. ESOPs are a bit different in ways I don't have experience with.

The monetary value of private equity is in most cases nonexistent. If it is a private company that is not already riding high (think airbnb when everyone knew it had struck gold) then the equity offer is nothing but a lottery ticket. I took a pay cut at a startup that sold me on accepting the offer with the pitch: "if we were to sell for $100 million like XYZ company, you'll be a millionaire". We ended up unable to raise another round of funding and my equity became worthless. Obviously this is my own biased personal experience and if you believe in the company and think the experience + shot at growing something is worth it to you, go for it! My experience was financially less ideal, but it led to a number of opportunities down the line that I wouldn't take back. But understand that trying to convert your esops into a direct monetary value isn't easy to do because they aren't terribly liquid (unlike vested equity in a publicly traded company).

Things to ask: Have they recently raised a round of funds and at what valuation? Why are they raising the money? What sort of operational runway do they have?