Does equity motivate you?

Startup Stock Options – Why A Good Deal Has Gone Bad https://steveblank.com/2019/04/10/startup-stock-options-why-...

Lessons Learned

- Venture Capital structures were set up for a world in which successful companies exited in 6-8 years and didn’t raise too much capital

- Venture capital growth funds are now giving startups the cash they would have received at an IPO

-- “Growth Capital” moved the need for an IPO out another five years

-- This allows VCs to capture the increase in market cap in the company

--It may have removed the incentive for non-founders to want to work in a startup versus a large company

--As stock options with four-year vesting are no longer a good deal

- Investors and Founders have changed the model to their advantage, but no one has changed the model for early employees

--VCs need to consider a new stock incentive model – RSA’s for the first key hires and then RSU’s – Restricted Stock Units for everyone else

- Large companies now have an opportunity to attract some of the talent that previously went elsewhere

By motivated, do you mean working for less than I was worth, or perhaps a time when I added more value than I was paid for?

When I couldn’t accurately value my options in my total comp, I realized that was the point. The only time I have been motivated was when I was on or working with a great team. The very best were indie consultants who were all paid consultant dollars. The next was doing startup consulting to prove a concept.

Equity that isn’t measured in a percentage of the company with transparency on prefs is at best, %99.9 of the time just a tax liability. It’s negative compensation.

Ask yourself, is what you do so magical that someone would give up partial control of their company for you to perform it? If you are not a cofounder, not an investor, not the key customer rainmaker what do you do? More so, if they don’t have the money to pay you, consider the long tail of clowns who do get funding , then why there isn’t money or why aren’t you worth it.

Most people take options because they are just happy to get the job and it makes spousal conversations easier. This latter reason I suspect is the most valuable one of all.

Short answer from someone in the startup space for over 12 years... no.

They are lottery tickets and I treat them as such. I was a c level at my last position and had a percentage ownership... no difference.

I treat salary and bonus as my only comp, equity is just a lottery ticket of x size.

Equity is to techies what exposure is for artists: a way to con them into busting their humps for the promise of a big payoff that almost never materializes.

I got burned during the first dotcom boom and learned my lesson. Demand the biggest salary and benefits package I can get, and walk out if they offer equity in lieu of actually paying me.

I recently discovered that the stock i was hand-wavingly promised never materialized. 10 months in to this job it's caused a cascade of reflection and 'why bother' moments.

So first, thanks for this question.

At prior jobs, I've hit points of "I dont want to be here, but i'll see it out because of x vesting point." Personal history has shown vesting to be a lottery ticket as has been said elsewhere. Its only paid out once and to the tune of about 4k total.

What i've landed on at this job is that I really dislike many aspects of this job; the domain, the location, the open office plan, and a lot of apples-to-apples comparisons when really theres a basket of varied fruits.

That said.

I get to do work here at my own pace and on my own terms. It's why I took a job at a smaller startup to begin with. Even as I struggle with the finer points (with some other insights in this thread), and moral points aside, I find that a lack of options means I'll at least see the year out here. I gave up a lot to prove myself in a slightly new area of the profession, and that experience is what I'm choosing to use as my "stock" instead.

I'm not motivated by equity at all (and particularly not if that equity is in the form of stock options). When I'm working for a company, I'm already completely on-board anyway. If I weren't, I wouldn't be working there.

That's not to say I'd turn it down, I'm only saying that it's gravy, not meat.

I always do my best regardless of compensation. Why would I be doing any less? Doing less harms me more than it harms the company I'm in and it makes it harder to get compensated more.

Equity is part of a range of other forms of compensation. It is a lottery ticket, yes, but statistically, lottery tickets have a value. A job that pays $20k with 1% equity in a million dollar company is better than a job that pays $25k, but worse than one that pays $50k (after taxes and all that). Plus there's other little things like potential to learn, comfort level of chairs, fun level of team.

If I get a better offer elsewhere, I will take that instead.

No way. I work in a startup (~35 employees) on a small, mission-critical team (~6 members). Even so I consider my contribution to company success or failure to be negligible. It boggles my mind that someone at a giant company like FAANG would allow their options to influence their work habits, as if their role in any way impacts the share price. Perhaps if I was in a top leadership position, but for a line-worker, equity is just an investment that happens to be correlated to the performance of your employer (ie bad, because its not diversified).

Startup equity structures are financial vehicles aimed at transferring the wealth generated from the labor of the employees to the founders and investors.

No. It is and should be treated like a lottery ticket.

Don't sacrifice salary for equity.

The real benefit of working in a startup is gaining experience/exposure to more responsibilities than you would in a big company.

First time equity holder. I like where I work and what I do, but the equity just gives me FOMO when I think about moving on in the future

I pay no attention to equity, since it usually ends up being worthless. Salary is all that matters.

No

Its harder to leave a job that pays well, with good benefits and great work / life balance above all