Joining a startup right after fundraising?

Question

I received an offer from a medium-sized startup with equity grant based on a recent round that might have just been finalized, and is not publicly announced yet.The current round 10x the valuation from last round six month ago. I am worried that the valuation can be inflated because it is a crypto startup. The investors clearly wanted to get in, but I am not so sure about taking the same risk as a new employee.Would appreciate any advice on- how to negotiate the equity grant? Have people seen startup offers to be based on previous valuations instead of the current valuation, assuming the fundraising is very recent? (Of course, I am not thinking about the valuation from six month ago, but there might be reasonable recent valuations before the current round)- If I can't negotiate up the equity grant, should I hold off from joining for a couple months? My thinking is that the valuation is unlikely to go up even more in the short term, but maybe it is irrational to think that the risk for joining a startup is highest right after fundraising?

version_five · Accepted Answer

I joined a startup shortly after a big raise and this is the basis for my comment. I have also been on an internal team that was (simplifying) speculative investment, meaning we got to try a lot of stuff without being immediately accountable for revenue. It's only two data points.
Pros are that exuberance is at a high point and it's a period of growth, investment, and optimism, so you will get to do all of the fun stuff and ignore the boring stuff (unless the company is really well run). Don't discount this - it's really cool to be able to try lots of new stuff without having to be under constant pressure. Even if management is more frugal than the places I was, it's a whole different thing to be somewhere during the belt tightening phase where reality sets in and positive results are due immediately. There is a rewarding career to be had jumping between places that are in growth mode.
Re options / equity, value them at zero unless you're senior leadership (unless I'm misunderstanding and there is a liquid market for the shares pre IPO or acquisition). My options were worthless, even in an acquisition. There are countless ways they can lose all value, and unless you're a key part of steering the company, consider them a lottery ticket, not part of total comp

antasvara · Answer

Is the risk really highest right after fundraising? Theoretically they just got a huge infusion of cash, so you should be relatively confident that the money will allow the company to survive at least for a bit.My understanding of equity grants is that you're entitled to a specific amount of shares. If that's the case, it's not worth deferring your employment. If I plan to sell the stock 2 years from now, it doesn't matter when I got the stock (as the price 2 years from now is unrelated to when specifically I receive my shares).