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> Compared to taking a $250k base and $250k equity offer from a startup

No startup offers such high salaries.




They do, the catch is that 250k of equity has a high chance of ending up as $0


Oh they absolutely do.


Would you be able to name a few?

The highest cash portion I’ve seen at mid to late stage startups was around 175k for a senior SWE. Equity offered was in the five digits, but I was coming from a boring enterprise company and not a hot FAANG.


at least one does (I interviewed and got a similar offer)


Guess I need a pay raise!


Startups do not offer such high salaries. I'd be surprised to find a startup advertise a salary like that. You have to negotiate those salaries.

You aren't negotiating with a startup against their current bank account. Their bank account is only relevant in determining what they can _afford_, not how much they should pay. They should never pay more than they can afford, that's bad for both of you, but beyond that there is no ceiling to how much they should pay.

You are negotiating against the pool of risk-adjusted returns you are going to provide the startup. The more directly coupled you are to their ability to fundraise and generate revenue, the larger the pool of risk-adjusted returns you are negotiating with them against.

If there is a high probability that $10m in value over the next few years will directly result from hiring you, $10m that would be hard to unlock with any other hire, you aren't negotiating a salary anymore. You are negotiating your share of that $10m.

An oversimplified example: Let's say you expect to deliver that over 5 years. A $500k offer that is 50% equity is a 25% share with half paid upfront in yearly installments.

If you close that deal, the company is appraising the expected return of hiring you vs. the risk of the impact to their runway and making the bet that reducing their runway by ~$30k/mo will payoff without them going bankrupt.

I've found this is a good rule to follow in general. I never pay myself with value I don't unlock. I always appraise my salary, contracting rates, etc. by estimating the expected ROI for the work I do and I pay myself out of that. If I overdraw (charge more than the ROI), I won't take the job.

As an aside, this is part of the reason why (I believe) CEOs are so well compensated. They obviously provide value. But that value is incredibly difficult to measure. You know a good CEO is extremely valuable and a bad CEO is extremely expensive, but you don't exactly know how to measure the value they really unlock. So, short of an actual appraisal, they are perceived as infinitely valuable. Since neither side in the negotiation knows the true dollar value of a CEO, they are negotiating against what the company can afford since they both know the company will pay as much as they can afford to get a CEO.




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