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by rdl 5043 days ago
If you're already well-off enough to not need income, or have a rich doctor as a spouse, it's quite reasonable to trade salary for equity.

Also, I'd love to take $50k/yr + 1% equity in an already successful startup. Say, Facebook.
3 comments
potatolicious 5043 days ago
> "If you're already well-off enough to not need income, or have a rich doctor as a spouse, it's quite reasonable to trade salary for equity."

It is never reasonable to trade your skills at substantially below-market compensation - regardless of if you can afford to do so. I have a lot of savings, but that doesn't make it reasonable for me to start lighting cigars with $20 bills.

Equity is a form of compensation, in this case dchichkov worked it out to be a expected value of $5K (or thereabouts) - how does one justify taking a haircut substantially more than this? (in this case, the haircut is on the order of $50-100K depending on the person).

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colmvp 5043 days ago
Unless lighting cigars with $20 bills could give you more money, I don't see that as an applicable analogy. If anything, it's a version of gambling.

Taking a significant paycut can be worth it if the options offered proportionately compensated the salary disparity IF the startup exits AND at a number that you estimate it could potentially hit.

If one isn't willing to take that risk then they should opt for less equity/no equity but a fairer market value.

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rdl 5043 days ago
At a very early stage startup, being a late founder means $50k cash salary (I get $30k as a founder, and if we did a late founder, I'd push for the same salary) vs. $100k+ for employee #1, but huge equity (5-50% instead of 0.5-5%, depending on person, size of team, how late, etc.). If you don't view founder-level equity as being worth $50-100k less cash comp, you probably shouldn't work there.
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dchichkov 5043 days ago
If you are already well-off, then 50k/yr wouldn't make any difference for you. And you probably have connections and can bring in a lot of value. So, if you are serious enough about it, ask no salary and a late co-founder status. Would serve you a lot better. And wouldn't allow other founders tell you, that they are paying you "salary".
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sofuture 5043 days ago
Yeah, and I'd take $20k/yr + a winning Powerball ticket.
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