[usaar333]

Under any normal circumstance I've ever seen, you should be taking the higher equity/lower salary combination and should focus on equity rather than salary.

The only time it ever makes sense to push for more salary instead is if you literally cannot get a job at a public company (or even a near IPO unicorn). Plenty of startup employees can, so clearly they believe their startup equity is worth something.

Financially speaking, startup equity is actually worth a lot as an employee (https://www.amafinance.org/startup_comp/). Yah, over 50% it's going nowhere but expectation needs to consider how huge the win is even if it is lower probability.

[gjm11]

If I'm understanding your logic correctly, I think it's flawed.

It seems like you're saying: if you choose to work for a startup rather than a bigger company, it must be because you think their equity is valuable, so you should prefer to take more of your pay in the form of equity if you can.

But there are plenty of other reasons for choosing to work at a startup.

You might have chosen to work at that particular startup because the work interests you. You might prefer startups to bigger companies because they have less bureaucracy and can do (some) things faster. You might prefer startups to bigger companies because there are fewer layers of management above you and so you have a better view of why you're doing what you're doing.

Even if you're only in it for the money, I don't think your argument is valid, though this is more of a nitpick: it might happen that a startup particularly wants you or at least your skillset and is willing to pay more for it than any bigger company you've found. You might think the startup is likely to fail, but still prefer being paid twice as much. (This is kinda nitpicky because I don't think this situation is super-common, unlike the other ones I mentioned above.)

[cortesoft]

First, your stock has a much higher than 50% chance of being worth less, even at the best startups. This is why early stage investors invest in so many companies… a vast majority are worth zero, but the few that make it big pay for all those and more.

This is why you would never see an early stage investor invest in only one company. They need volume to be able to survive the high risk/high reward nature of startup investing.

Now, maybe you think you are a better judge of the probability of success for your startup than an investor, so the risk is lower. You would be wrong; if there was a way to reliably predict which startup would hit it big, then investors (who spend all their time trying to predict exactly that, and have a lot more data and history to use in their evaluation than you do as an employee) would have a much higher success rate.

So even if you have a very promising startup, your equity is a huge risk. Your company probably won’t hit it big, and if it does you have to hope you aren’t screwed out of your equity by the millions of tricks they use to screw employee shareholders; dilution, preferred shares, etc.

Even worse, you are taking double risk. Your startup is risking both your equity AND your salary. You want to diversify your risk, so you can use your investment when your salary fails and use your salary when your investment fails. In this case, those both will fail together if your company doesn’t make it.

Look, equity and stock options are great, but you REALLY have to discount its value as an employee because of the way the risk shakes out as an employee.

[usaar333]

I didn't claim my risk is lower, but as my link notes I can quit and recall my investment while the investors cannot.

[tylergetsay]

How does quitting "recall" the investment?

[almostgotcaught]

> Yah, over 50% it's going nowhere but expectation needs to consider how huge the win is even if it is lower probability.

yes that's literally the definition of expectation value...... so

    ev = 1 bagillion * 0.0000000000000001 = ~0

hence you should absolutely not be taking higher equity/lower salary ever. hell i wouldn't even take that at a publically traded company if given the option.

[doctorpangloss]

The interesting thing going on is, stars align. The kind of person who has to think about this problem should take equity. The kind of person who would choose to take cash isn't going to be hired at the kind of VC backed business that will end up being worth something.

[Dayshine]

Yes, a company will do very well if it fills itself with naive employees who think that if they work insane hours and sacrifice their life for equity (which they'll never get an exit event for) will do very well.

But you don't want to be that employee...

[almostgotcaught]

Man what level of weird delusion is this? Windsurf was an app for code completion not interstellar space travel lol.

[cortesoft]

Man this is a ridiculously naive take.

[zdragnar]

I've long preferred working for startups over big companies, but my equity has rarely been worth more than a day or two's salary equivalent.

I know a few people who did well working for unicorns, but that isn't most startups, and pretending that any given startup will be one is selling yourself short.