Startups
This lesson cautions the candidate to have his guard up when negotiating compensation with startups, as their equity, in most instances is hard to value unlike public companies.
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Working at startups feels much like a rollercoaster ride with its own unique highs and lows. Startups are positioned as shiny, fancy, the-next-big-thing and sold as such by recruiters to the candidates. Kool-aid flows freely in startup offices and is religiously distributed among employees to drink up.
It can be very exciting and highly rewarding to work at one, but the adventure can also end up in tears and crushed dreams. In short, the phrase “high risk, high reward” is the most succinct description of employment at a startup.
The holy grail of negotiating with startups is to barter as much equity as possible in return for your toil and sweat. Because startups are usually constrained on cash, especially the early stage ones, they are unlikely to match the higher base salaries and cash bonuses that public companies with impressive bottom-lines may offer. However, this presents an opportunity for the candidate to negotiate hard for options or RSUs. If the startup indeed becomes successful, the equity will far outperform any salary bump you negotiate for at the start.
One recent ...