[balloot]

I actually just accepted an offer at a startup, and like the idea of a tool like this because I had to approximate it. However, it's simply incorrect to compare your startup job with an VC investment, and the numbers given by your tool would create a situation where you would turn down almost any realistic startup opportunity.

For example - let's play with the offer given in the article: 1.25% + $85k salary (I'm including all extras in both salaries). Given that the author made ~$142k before, the tool says that if she expects a valuation of $100M on cash out with a 1% stake (after dilution), she should have been offered $117k. That's simply not money you'll get at a 5 person startup under any circumstance, even given the very generous valuation estimate for a startup with $800k funding.

Alternately, if you join as employee #15 or so, you're probably getting closer to .1% of the company, and the calculator says that you should take a $3k deduction off market rates on a $100MM expected valuation. That's also not even close to what really happens.

The problem lies in the comparison to a VC investment. Because for a job seeker, the real comparison is "take a job with standard salary". Your calculator claims that if you could make $600k over four years at a "normal" job and $400k over four years at a startup, you would be upset at a $1MM stock payout because it wasn't 10x the $200k "investment". That is just totally asinine.

In reality, a rational decision would take any salary/equity combo that has an expected value (in the statistical sense) of $1 more than the market rate. There is no multiplier.