There's potentially an opportunity for me to take a job at a startup company. They're small. Currently [n < 5] employee[s] small, have been around for [n < 3] year[s].
Taking this would be a big pay cut (but still being paid) but I would get equity. How do you assess what is reasonable compensation in terms of equity?
In terms of risk, obviously it could fail, my equity would be worthless, and I'm out of a job. Are there are other more subtle risks I'm not thinking of? Thankfully it's local, so I wouldn't need to move for this.I have no idea how this sort of thing works; undoubtedly there's some sort of "what percentage of a company do founding members get" convention that readers know about that I do not.
I presume that there's two possible ways to calculate this:
- How much is this company worth, in the best case? How much of that is the ownership willing to give me?
- What kind of a hit am I going to take by working here? What portion of the company's future revenues will make up for that actual hit to my salary?