[e9]

Unfortunately this author has no idea about how equity works in real life, 2 things that stand out from experience of being very early employee 8 times: 1. If startup raised money at some point in the past and they are at 50M valuation then there is no chance average employee will get offer of 1% (you would need to be someone special to get that) 2. There will be many more dilution rounds before they get to 1B valuation so chances are that 1% will get cut to 0.3% over that time period

[islewis]

You give two critiques relating to the exact numbers the author has choose (equity package at join, valuation at exit), neither of which is really related to the authors hypothesis that people misvalue EV from equity.

You can slide these numbers around however you want and the point still stands, even if you disagree with it for other reasons

[e9]

my 2nd point says that due to dilution rounds your 5% chance is not 10M but about 3M so

5% * $3M = $150k expected equity value

$150k / 1.15 = ~$130k/year

which is same as you started with