Are you focused on getting a higher salary or do you want more equity (or both)?

@madworldusa255

2 жыл бұрын

I've been defrauded by my employer. Help me.

Thank you so much, this helps me better understand the startup options. Well done!

thank you for making this video. i look forward to diving into the resources provided! 🙏🏼

Thanks, you explained this all pretty clearly. Great vid.

wow! thank you for all the info... didnt expect all that in just 12 min :)

This was incredibly helpful! Thank you

Very helpful. Thanks!

Great video. I wish I had watched this when I got my first start-up job.

@JenniferBrick

3 жыл бұрын

Tbh it's the video I needed when I first moved to startups too.

Really clear and helpful. Thank you!

@JenniferBrick

4 жыл бұрын

I'm so glad it helped!

Great info. on stock options, and restricted stock. It can become very complex in trying to value an offer . But These options can make you wealthy , depending on how much you get .

@JenniferBrick

4 жыл бұрын

They certainly can pay off, especially if you're an early employee. Usually by the time a big exit is a surity you don't get as much... but it's a great bonus when it happens!

Thanks for making this video !

@JenniferBrick

2 жыл бұрын

Hope it helped things make sense!

Love it!

Good video, thanks for sharing. I just got offered to work at a start up (which I consider high risk of course). Equity and all sounds good on paper, but I think base is the most important part when starting out. Meaning I'd take slightly lower equity, but get paid more on my base (which is part of my negotiating plan). But all in all, high risk, high reward, and most start ups also have a high turnover (they can fire you just as easy as hire you). But the upside needs to far outweigh the downside risk if one is to leave their decent paying job at a big company with benefits to work at a start up with no benefits

@JenniferBrick

3 жыл бұрын

Solid approach. Risk tolerance is personal. I'm a firm believer in working with a financial planner to have a money strategy, and integrate it into your career strategy.

Hi! This video is very helpful, thank you! I received an offer recently for a company I am really keen on working with which includes equity as part of the offer, my first time dealing with this. However, the equity is being offered as a specific dollar amount (this case in Swiss Francs) instead of a %. The company is not on the stock market. The offer on top of my base salary and bonus is

Hey Jennifer Great video, let's talk about equity because things are quite at edge where I am, I see an opportunity.

very helpful!

@JenniferBrick

3 жыл бұрын

So glad it helped!

very informative

@JenniferBrick

4 жыл бұрын

I'm so glad it helped!

Thank you! I am anticipating being hired by a former employer who is seeking investment for a start up with a set exit strategy and am wondering how I will be paid. He has had equity in the former company he cofounded and has sold a small part of his shares for 150k and still has shares valued at well above that (by his own admission. the company was doing well but our department of about 10 people was laid off as it dealt with international events) so clearly the sound of equity sounds good to me. At the same time I feel a bit anxious about negotiating these things and also think that it is a risk and that I would like to balance salary, maybe even prefer a higher salary now. Thank you for the helpful info!

@JenniferBrick

3 жыл бұрын

There is no right answer when it comes to the salary/equity split. I have a video coming out on Friday that dives more into it, but my suggestion comes down to this: salary wise what you you want and what do you need. The biggest mistake I see people make with startup offers is being fuzzy on which is more important and what they want their salary to look like. The salary is the sure thng and the equity can be a bet (though some odds are 2:1 and some are 1:1000).

Hey Jennifer, Amazing video! Just a quick question: If you are joining a startup which isn't going to pay you till they get funding (which nobody is sure off), how much equity one should request of the unpaid task they will do till they start getting salary?

Gems 💎

How probable do you think a series B company is of being acquired or going public? Thanks in advance

How can we ask the company to participate in secondary market for benefits of employees?

This would of been better information before 2017. But I am learning,

I have an offer from a startup with 1% equity what does it mean

This is so fascinating. I literally had no knowledge of this before this video. Where have you learned about the ins and outs of this from?

@JenniferBrick

4 жыл бұрын

I spent several years working with and for early stage startups. It was a steep learning curve when I started :)

Is it usual to work for no pay and equity only?

What if the company is already public and offering equity? Is this something you should be grateful for and not negotiate?

hi jennifer, thanks so much! what's a reasonable cliff + vesting schedule for a startup that's just getting started? Also, if the startup is very early do they just come up with the strike price based on market valuation estimates? can you negotiate the strike price as well? also what happens if you leave before the company exit?

@JenniferBrick

2 жыл бұрын

Most startups have a cliff of 3-12 months (though some have none), with monthly vesting afterwards. The strike price is based on their 409A valuation. Can can't negotiate strike, but you can push for RSUs vs options or more options. When you leave before exit you can choose to exercise options (RSUs there is no need), so that becomes a decision you make because typically you'll have a set period to purchase those options. Hope that helps!

@howdycooky680

2 жыл бұрын

@@JenniferBrick Thanks so much! I feel like if you did an update on this video with some of these points, you'd find lots of people looking for this info! It's really not easily accessible at all. Is it normal for early stage startups with no product to offer about 1-3% stock option + salary? I kind of feel like I'm going in as a co-founder because they need help coming up with the product details. But, then again, I would receive a salary and in lots of startup situations, there might not be a salary if I'm a co-founder. What do you think is fair?

Can you sell your stock to a private investor if the company is never acquired and never goes public?

@JenniferBrick

3 жыл бұрын

There are secondary markets, I've had friends and clients that worked for unicorns are sold shares pre-IPO. That said, I haven't met an investor who was interested in investing in a company that had exit intent via IPO or acquisition; this in general would impact their ability to raise rounds, and definitely interest on secondary markets.

Is the equity should be mentioned on the contract ? The compagny sent me the contract but they didn’t mention the equity compensation

@JenniferBrick

3 жыл бұрын

This depends on how the contract is structured. Ask the person you are dealing with on the offer, I have seen where the grant is in a separate letter.

What is pre-IPO equity and is it a good consideration for a unicorn start up? Valuation is 5.5 Billion after 3 years (1.25billion in April) to reach 43 Billion in the next 5 years. I’m not interested in equity over salary (as I’m new to salary and equity) but wanted to know if I should consider because of the potential? 💕✨

@JenniferBrick

2 жыл бұрын

Unicorn status usually takes serious investment with at least one of top firms involved... so the trajectory is there. The investors expect ROI, and they spend to get it. So the risk isn't as high as a startup who is in Seed where friends and family handed over capital in my opinion (for what my opinion is worth). In terms of their Valuation forecasts: they are educated guesses. For example, WeWork was valued at $45B until it wasn't. Their valuation fell apart, and so many employees got screwed. Now, if the company you are considering has their stuff together and the forecasts hold then there is a definite upside to equity, even if they grow to a $20B valuation in 5 years, that would still be a stellar performance and have an upside for you - plus they're in growth mode (obvs) so there could be opportunities for your professional growth pace to be faster than a big publicly-traded company. Ultimately, it's gotta be your call based on the offer, your risk tolerance, and if you see it as the right next step in your career. Also remember the numbers they give you in the offer are negotiable :)

@UneakTershai

2 жыл бұрын

@@JenniferBrick you are amazing! I will take all this into consideration. I appreciate you for answering. 💕✨

@JenniferBrick

2 жыл бұрын

Yeah no worries! I know this is all really overwhelming and how confused I was when I moved into the startup world. Hope this info helps and keep me posted!

I have an offer with 4x equity which starts after 2 years of employment... What does this mean and how much do i get actually from this?

@JenniferBrick

3 жыл бұрын

I don't understand 4x equity. If suggest having a review with a lawyer who can explain it. One thing that stands out is a two year cliff, that is very long.

I was offered 5% of a startup company, what does that really mean for me? I was told I would become an "owner" and be involved with business decisions but on the terms of everything else im not too sure.

@jmatt98

3 жыл бұрын

Doesn’t mean anything unless you are sure the company will go public

I also, got an offer in %. (The company is pre series A). My HR is telling me that % is part of the employee pool and not part of the whole company. Is that true? Say the company sells for $1m and I have 10% does that mean my share is 100k? Or is it part of the employee pool which is worth 100k and my 10% is worth 10k?

@JenniferBrick

2 жыл бұрын

Ask then to clarify. Communicating as a percentage of the employee pool is confusing AF... You need to know the size of the employee pool (it's typically about 20%), and confirm that they are quoting on available employee pool or total employee pool.

@aliahmatov

2 жыл бұрын

@@JenniferBrick the offer reads “your total compensation will also include xx% in (company name). Subject to a four year vesting cycle… But yeah, I’m just going to have to clarify. Thank you! Your videos are super helpful!

Thanks for the video. A ceo is offering me 2.5 from what should become ten million dollar company in the first 5 years. Confusing thing is he made it sound like i would get paid from the equity weekly, everytime the ceo makes a withdraw, which he would do every Friday. This doesnt sound like anything you mentioned. Is this ever the case?

@JenniferBrick

3 жыл бұрын

Is the offer for RSUs or options? Either equity vehicle, there is not a weekly paycheck; weekly vesting perhaps (though monthly after a 1 year cliff is much more common). Theorerically, dividends could be paid with compensation that is 100% equity, but I have never seen it as a weekly payout since it's tired to the company's performance and all share holders would receive it. Honestly, best thing to do is to have the offer reviewed. An employment lawyer will be able to explain to you what the contractual offer is, they're experts at translating legalese to English 🙃

@Fearl3ss234

3 жыл бұрын

@@JenniferBrick thanks so much for getting back with me, and so soon! Wow. I talked with him and he said, because its a smaller company, he is doing equity a little different, more as owner shares. There is only about 6 people to whom the equity will be going too, and he hasnt gotten the proposal written up yet (it will be fully explained at that time) but in short, with every draw out (draw outs begin once company has X number of net profit) we will all receive our percentage of his draw out. The only downside might be that if the company needs to spend a lot of money all of the sudden, he said we might be asked to put some of that back in.. does ANY of this sound familiar to you? Ultimately i will know more when the package document is writter out. In all, he paints a nice picture of me have a ownership of a potentially great company that will pay me returns long into the future with very little work. But this is WAY outside my realm of experience, lol! Will definitely run it all by that lawyer you mentioned once i get the doc.

@JenniferBrick

3 жыл бұрын

@@Fearl3ss234 I know many people who have taken little salary and high equity, and even many who have taken all equity with NO salary to begin. It sounds like he a revenue share or a profit share in lieu of salary - this is isn't necessarily related to equity (equity can pay dividends). You can have rev/profit-sharing without equity and vice versa. Also remember if it's a profit share, that companies in growth mode, especially in tech, don't operate profitably. This isn't to say all companies do this. For example, my company is self-funded and I have no exit intent. I would not consider paying anyone I hired based on profit sharing because I don't have any intention of having profits until I reach a certain revenue level. In my circumstance, if I hired someone on profit sharing they would not be paid right now because my company reinvests every dollar it makes. Get clarity on if its a profit or revenue share, and personally if I was being compensated on either model I wouldn't do so without reviewing the financial health of the company.

Hi! New subscriber here. What are your thoughts on LLC's profit interest shares? I've got an offer to 0.2% of the company’s common units on a fully-diluted basis, aggregate profits interest threshold amount of the angel valuation ($6,000,000,) fully vested upon completion of services (3 month contract). Part-time consultant pro rata $100k. Getting all on equity, covid messed up the start-up's liquidity. The idea is after the initial 3 months, to move on to salary basis, at least 50% of it. Does that sound fair-ish? I've read when LLCs are set up is usually because the founders want to go public eventually.

@JenniferBrick

4 жыл бұрын

If memory is serving me right LLCs cannot IPO they would need to convert to a C-corp first. In tech, most startups incorporate as a C-corp. Anyways, I digress... My experience is with C-corp equity because I've not worked with any company that structured as an LLC other than my own (and I'm the sole owner). I can't tell you if their offer is fair, especially when you will be working without an income; but the first question is: can you sustain it for that duration of time? Is the experience remarkable and would raise the value of your services / your salary in the long run if it didn't last? The question that is particularly important with an equity component, but I think especially for options and profit interest, is do you think the company will grow? Because with profit interest, you are not deriving any interest from the current value, only future growth. Also make sure to ask about exit strategies! While I'd love to dive into if profit interest or equity shares are better, I'm not an expert, but I started poking around and there are a few sites I thought would be helpful that make understanding them straightforward: Investopedia: www.investopedia.com/terms/p/profits-interest.asp Equity vs profit interest sharing: www.pcg-services.com/equity-sharing-101/ Hope that helps!

Hate getting stuck holding the beg 😂

Please help!! What if the company is already public and offered equity of $40k over 4 years at 25%? What does that $10k per year mean for me? Is it cash I see in addition to the base salary?

@JenniferBrick

8 ай бұрын

Are they options or RSUs? RSUs they give you on the vesting schedule; you can hold the shares or sell them. Options give the option to buy x number of shares at a set strike price. If you don't exercise your options (ie buy) the options are with zero. If you exercise and the strike price is higher (which why would you if it was lower, you would just buy in the public market instead of you wanted), then you're up the difference. You'll be subject to different taxes - not sure where you live but you can chat with your accountant about that!

@kayzong

8 ай бұрын

@@JenniferBrick THANK YOU SO MUCH FOR REPLYING 🩷 this is the first time that a company has offered equity so I didn’t know all the appropriate questions to ask. After doing some KZread searches I realize there’s so many questions I have. Currently I don’t know if it’s options or RSUs. So I’m confused as to why they would say “$40k” instead of “40 shares”… is that the same thing? They are offering base salary + annual bonus + equity. I would prefer more base salary and/or bonus versus the equity. I’d like to negotiate for a higher annual bonus % and smaller or maybe even no equity at all. How likely is a company going to agree with that?

I am so confused. I was told that I was going to receive $12,000 in equity and they sent me this calender and I dont get it. EQUITY SCHEDULE : Hire Date- Febuary Grant Month-March Vesting commencement date-March 5th First Vest Date- March 5th (Following month)

@JenniferBrick

3 жыл бұрын

It's not uncommon to have time between your start date and the first vesting. Many companies it is 12 months.

You didn't add the resources on RSUs vs stock options like you said you would....

@rickkubina8977

3 жыл бұрын

Funny I was looking for them also.