Open guide to equity compensation

As our 30 person startup has grown, I made a conscious decision to stop pitching stock options as a primary component of compensation.

Which means the job offer still includes stock options, but during the job offer call we don’t talk up the future value of the stock options. We don’t create any expectation that the options will be worth anything.

Upside from a founder perspective is we end up giving away less equity than we otherwise might. Downside from a founder perspective is you need up increase cash compensation to close the gap in some cases, where you might otherwise talk up the value of options.

Main upside for the employee is they don’t need to worry too much about stock options intricacies because they don’t view them as a primary aspect of their compensation.

In my experience, almost everyone prefers cash over startup stock options. And from an employee perspective, it’s almost always the right decision to place very little value ($0) on the stock option component of your offer. The vast majority of cases stock options end up worthless.

That mindset can definitely simplify negotiations, but I’ve noticed that removing equity from the perceived value stack can change how people show up. Some folks who might've gone the extra mile with even a slim shot at ownership now treat the role more like a job than a mission. I’m curious—have you seen any shifts in long-term engagement or retention since downplaying equity?

It is a job, no matter how you pitch it. Equity is not real ownership and doesn't come with any real decision making power. It is a slim chance at a big bonus. I've had equity in most of my jobs and the job sucks then I'll leave before my stock vests which I've done twice.