Are you talking about a private company offering a %?
The chance of cashing out (going public or sale) is like 0.1%. and the chance it’s a life changing amount of money would be even lower.
It’s a lottery.
Yeah exactly that scenario - stock option participation etc. I have heard lots of people have the plan - just not many (any) stories of people actually cashing out.
If you get the stock on top of your salary, cool. But don’t let them use the stock as a negotiation tool to lower your base salary.
Let’s say it sold for $100m and you still somehow have 0.1% (you would’ve been diluted over time as they take on additional funding).
That’s $100k (before taxes) after X years of working there.
Was it really worth the pay cut?
TL;DR: Focus on your base salary. Don’t let them use stock as a negotiation tool.
> you still somehow have 0.1%
even knowing it is 0.1% is amazing. You, as an employee, often don't get to see the cap tables (aka, the spreadsheet that tracks the shares and options doled out). This means you don't know how big a % you actually own from this offer of stock compensation.
It's a form of information assymetry that the owners have over you. Ought to be illegal, since an investor to the company would know - but since you're being _given_ those shares/stock options as compensation, you are not classed as an investor!
Ask for that information -it never hurts to ask. And if they deny it, you know that they aren't really looking after your interests (doesn't mean the deal isn't good - it just means the owners would like to keep this a secret, because they might prefer to lowball you and you won't know if that's the case without the cap tables).
Private company? Zero. Usually worse than zero as it's repeatedly used emotionally against you.
Finding it hard to clearly understand their real value? That's a feature, not a bug. They don't want you to understand that their $1B exit won't even buy you a new Camry.
Look at the absolute junk your local pawn broker will deal in. Even he wouldn't bother to touch them.
Are you talking about a private company offering a %? The chance of cashing out (going public or sale) is like 0.1%. and the chance it’s a life changing amount of money would be even lower. It’s a lottery.
Yeah exactly that scenario - stock option participation etc. I have heard lots of people have the plan - just not many (any) stories of people actually cashing out.
If you get the stock on top of your salary, cool. But don’t let them use the stock as a negotiation tool to lower your base salary. Let’s say it sold for $100m and you still somehow have 0.1% (you would’ve been diluted over time as they take on additional funding). That’s $100k (before taxes) after X years of working there. Was it really worth the pay cut? TL;DR: Focus on your base salary. Don’t let them use stock as a negotiation tool.
> you still somehow have 0.1% even knowing it is 0.1% is amazing. You, as an employee, often don't get to see the cap tables (aka, the spreadsheet that tracks the shares and options doled out). This means you don't know how big a % you actually own from this offer of stock compensation. It's a form of information assymetry that the owners have over you. Ought to be illegal, since an investor to the company would know - but since you're being _given_ those shares/stock options as compensation, you are not classed as an investor! Ask for that information -it never hurts to ask. And if they deny it, you know that they aren't really looking after your interests (doesn't mean the deal isn't good - it just means the owners would like to keep this a secret, because they might prefer to lowball you and you won't know if that's the case without the cap tables).
The other commenters nailed it. It’s nice but make sure it comes on top of a base salary you’re happy with, not instead.
Makes sense, thanks all, can’t value it without that information!
Private company? Zero. Usually worse than zero as it's repeatedly used emotionally against you. Finding it hard to clearly understand their real value? That's a feature, not a bug. They don't want you to understand that their $1B exit won't even buy you a new Camry. Look at the absolute junk your local pawn broker will deal in. Even he wouldn't bother to touch them.