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Open guide to equity compensation

(github.com)
656 points mooreds | 4 comments | 13 Apr 25 19:13 UTC | HN request time: 0.908s | source
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blindriver ◴[13 Apr 25 23:38 UTC] No.43676682[source]▶
Those equity percentages in this document are EXTREMELY FOUNDER FRIENDLY and I believe this entire document was written to anchor new employees with lowered expectations on equity. I think this entire document is a disingenuous scam to make new startup employees think that those percentages are okay.

I’ve been in Silicon Valley a long time, since the dotcom boom. My first company, the executive assistant got so rich from the pre-dotcom IPO she quit and bought a vineyard. That’s how things used to be. And we aren’t talking about some crazy ipo, it was before those times.

Fast forward to these days, the startup I worked for got acquired. I was engineer < 15. The founders got low 9 figures, I got 5 figures. Almost everyone got fucked for years of loyalty.

But that’s what YC and other accelerators teach founders. Be cheap with equity. And this document just perpetuates that.

Founders can easily make life changing money but the people that do the actual work get fucked unless it becomes a >100B company like a Facebook. That’s not realistic and they know that. Employees need a bigger piece of the pie when things go great for the company and not just when it becomes a Facebook, Uber, etc.

If you want to know how to evaluate equity, pick a total valuation of the company at exit and then multiply by your stake. If the company needs to exit at > 10B for you to make a life changing amount of money, then ask for much much more equity or don’t take the offer.

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1. Ozzie_osman ◴[14 Apr 25 06:40 UTC] No.43678639[source]▶
> I believe this entire document was written to anchor new employees with lowered expectations on equity. I think this entire document is a disingenuous scam to make new startup employees think that those percentages are okay.

Have to love the HN crowd. A guy goes out of his way to write a very detailed, high-quality guide demystifying a very complex and consequential topic, open sources it so it's free, and immediately people suspect the entire document is build just to make startup employees think lower percentages are OK?

Disclaimer: I know the author personally, so can definitely attest to the motivation behind this guide. I'll also say I've used this guide both as a founder and as a startup employee and it's been immensely helpful.

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2. xyzzy_plugh ◴[14 Apr 25 14:55 UTC] No.43681995[source]▶
Both can be true!
3. blindriver ◴[14 Apr 25 23:53 UTC] No.43687565[source]▶
The fact that you are a founder that agrees with these extremely low equity percentages for early employees confirms exactly my point. It's to anchor lowered expectations for new employees coming in.

I stand by exactly what I wrote.

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4. Ozzie_osman ◴[15 Apr 25 05:47 UTC] No.43689360[source]▶
Genuinely curious. What percentages do you think are fair and why? As both a founder and employee, I anchored to the market. But maybe the market isn't fair. So what is?