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Don't the overwhelming majority of startups fold before anyone can cash out of their equity stake, making any equity you're offered in the employment contract effectively worthless? (unless you're incredibly lucky and win the startup roulette)

1%, 2%, or even 100% of $0 is still $0.

Am I mistaken about this?

Even if the startup is successful, your equity will have been diluted quite a bit.
A $56,856 pay cut x 4 years would be $210,424. That is quite an investment for the small chance that the startup will have an exit big enough to make the equity worthwhile.