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Forums Forums Business Startups I have an interview with a post-series A startup. I will be paid about $55k with the possibility of equity. What should I know about employee equity, vesting, dilution, anti-dilution measures, ect? What are some common traps and tricks bad founders will do? What are some red flags?

  • I have an interview with a post-series A startup. I will be paid about $55k with the possibility of equity. What should I know about employee equity, vesting, dilution, anti-dilution measures, ect? What are some common traps and tricks bad founders will do? What are some red flags?

    updated 3 years, 6 months ago 0 Member · 1 Post
  • David

    Member
    July 31, 2019 at 5:47 pm

    I just graduated college and I’m searching for startup jobs. I have my second startup interview coming up. First time around, I rejected because an alum from my school told me through the grape vine they were going under. Turns out there were. I wish I went through more steps of the process to just see how negotiations and equity stuff works. I studied finance in school, but they never taught us about startup equity. I’ve been reading blogs and guides to employee equity. I want to be as prepared as I can. Below I am going to post my current thoughts on the matter, I would greatly appreciate if someone could add to it and tell me where I’m wrong. Please share your experience with the matter. Ohh, an my last post on this account had bits of false info to keep myself anonymous. I would not recommend looking at it, because it will just mislead you for this question. So, here’s my current line of thinking: Even though I believe in the product and the founding team, I should plan for my financial future as if it were not there. If I get it, that’s just a nice bonus. It will dilute, and this is normal. I should not expect anti dilution rights, this is just part of the game and I should be okay with it. There is nothing I can do about it. Most of the value might dilute. It’s very unlikely that I will be given a piece of equity outright, it will be options on a vesting schedule. Its a 2 year position. I should be mindful of this, because it’s shorter then the typical 4 year vesting schedule and I don’t have that much time to exercise the options. I should not take the job if they turn around and say “ohhh the potential salary ranges we posted on the job application were actually with equity included. Your actually making $35k plus equity.” If they mislead on something like this, they are either untrustworthy bullshitters, in financial troubles, or both. The firm’s valuation is private. I shouldn’t ask about it until we get to talks of salary, benefits, and equity. I should ask how much they grew in the past few years, how much shares have diluted, and ask about their burn rate. I should have an idea of when the firm will become profitable. If a substantial portion of my payment is in equity, I should be aware of the financial happenings of the firm. I should know when they break even (if they haven’t already) and should expect higher pay when they become profitable Equity is the least important bargaining chip in negotiations, what really matters is salary and benefits – by hq overview SebatreePortal – –

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