Open guide to equity compensation

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.

The majority of comments here seem to argue the ideal equity share for employees is zero, since it probably won't be worth anything. That seems like an even more founder friendly viewpoint, no? Mass inequality of ownership is how we end up normalizing the corrupt billionaire class. I agree with you we need an industry desire for better ownership terms, but instead I see people arguing employees should just take a salary, look the other way, and let owners hoard all the spoils.