[habosa]

I've never worked at an early-stage company, so I have more questions than answers. Isn't 0.2% basically nothing? Even if GoogleSoftBook buys the company right now for $100M, you get (at best) $200k. And that's not going to happen. Probably more money will be raised, your 0.2% will be diluted, and a $100M exit is rare. So you'll end up with less than 1yr of salary for all that risk and lost salary/benefits in the meantime.

I know it's not all about the money, but in this conversation we are only talking about money.

[garry]

I was employee #10 at Palantir and received and accepted an offer in this ballpark. I'm pretty happy with it at this point. Frankly it was absolutely life changing, both from a learning perspective and a compensation perspective. Of course that's an outlier — but this is why you should treat what company you join the way investors think about investments. Only they get to diversify and your choice is even more important — you only get one shot at any given point.

rgbrgb's point is also well taken. You should be able to swap equity for salary, since for a pre Series A company that's a chunk of coin.

[habosa]

Very true, although Palantir is probably one of the top 10 most valuable and technologically interesting startups of the last 10 years so you made a great choice.

$130k is a lot of money and, like you said, being in the first few employees is a great opportunity for personal development. I just feel like you have to consider the 0.2% to be a lottery ticket because most of the time it will end up being worth nothing or very little.

[aetherson]

So here's the deal from my perspective:

A venture-backed startup is typically looking at a $1B valuation goal, with $300-$600M being "successful," and $100M is, at best, a consolation prize. From the perspective of outsiders, it's tempting to only consider orders of magnitude, but note that the difference between a $80M acquisition and a $150M acquisition -- which if you're just reading about it in the press are probably both compressed to "around $100M," is an almost 2x payout difference for investors.

0.2% isn't almost nothing. $200k from a consolation prize is not almost nothing. $600k-$1M from a basically successful but non-unicorn monetization is definitely not nothing!

0.2% in a pre-series-A company is also just the very start of a long conversation, not the end of it. You are of course correct that there is likely to be dilution. There are also going to be more stock grants long before any monetization event. If you stick out a job that starts with a 0.2% grant for long enough for that grant to fully vest, much less for long enough for it to monetize, it would not be, in my experience, unlikely to have another 0.2% (of the original size share-pool) coming.

My experience is also that if there is a lot of dilution, the company will at least mitigate that dilution for employees with new grants. Maybe not totally counteract it, and maybe not mitigate it at all if the dilution is, like 20%, but if your grants are halved by dilution, I would expect the company to bring you back up to 80%+.

I think that a lot of people fixate on the initial grant. That makes sense if you're a founder or, like, a really really early employee who took basically no salary and instead got 1%+. Maybe those people never see significantly more stock after their initial grant. My experience from having taken a few offers in the 0.1-0.5% range is that you will see materially more stock in new grants as time goes on. Of course, that's only a few companies, and maybe I've just dealt with unusually reasonable companies.

[dchichkov]

'a really really early employee who took basically no salary' -- this is a description of a founder.

'and instead got 1%+.' -- this is a description of somebody who had decided to work for free for some reason.

[aetherson]

Well, really, it doesn't matter how much salary they did or didn't give up for these purposes. The point is, if your initial grant is, say, 1.5%, then maybe your later grants will be pretty insignificant in comparison. But if your initial grant is 0.2%, there's no reason why you can't get significantly more stock through later grants.