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by ManchesterDev
694 days ago
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This is the sort of reply I was hoping for, thank you. I have a few follow ups: - Do you have any sources for where you’re seeing salaries at 100k upwards? Anything online, or is this offline advertised roles? I’m going to need some evidence points to support my counter offer. I think a few senior salaries to solidify a low of 100s and a few head of salaries to set a benchmark will be helpful if I can find them. - It’s not an AI business, but does leverage it. I think the 100k-400k at 0.2% isn’t a game changer, but double or triple that would be. Where are you getting your ARR multiple estimates from? I don’t doubt you, it just helps me assess my position. Yeah I feel my equity offer is probably unfair, but didn’t know any different when accepting it sadly. Do you have any resources I could read to educate myself more about what I should be specifically asking for in a negotiation and how it works. |
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- No online sources. This is first hand data for engineers that have worked on my teams.
- Here are some resources [1] [2] [3]. During the boom a couple years ago, multiples got way higher - at the time I worked at a company that got valued at 26x. But that's not very realistic these days except for particularly hot companies. The median for SaaS is probably around 5x. But you get more points if you're growing fast, etc.
- Here are some resources [4] [5] [6]. Normally you'll see the first employee - especially the first engineering hire - get around 1%. That number drops quite quickly after the first employee. So based on your circumstances it seems you're below benchmark by around 5x, and that's further compounded by how early the founders want to exit (i.e., if you were an early employee of Instagram, then 0.2% would actually be a lot. But 0.2% of a business that wants to exit at $10M ARR doesn't make up for your risk).
[1] https://www.saasacademy.com/blog/saas-company-valuation-metr...
[2] https://feinternational.com/blog/saas-metrics-value-saas-bus....
[3] https://aventis-advisors.com/saas-valuation-multiples/
[4] https://www.hustlefund.vc/blog-posts-founders/equity-for-ear...
[5] https://www.wing.vc/docs/early-stage-hiring/how-to-determine...
[6] https://www.linkedin.com/pulse/equity-equation-mastering-fir...