Should you take that director-level offer at a startup worth $50 million or $500 million?
When it comes to salary, the gap might not be as large as you expect.
Take a Design director, for instance. At a startup worth $50 million, the base salary for that position is currently around $174,000. At a much larger company worth $500M, the salary starts at $205,000.
That's a solid jump! But 18% is not a chasm.
There are certain functions like Marketing or Operations where the gap is higher, but on the whole expecting about a 20% increase in base for a 10x jump in valuation holds true.
However - this obviously leaves out the equity component of compensation.
On the one hand, equity grants at the larger company will be much smaller. Probably something like 75% less equity than the offer from the $50M company.
On the other hand, the equity from the $500M scale-up is much more likely to end up resulting in some value, as the equity from the small company remains at high risk of becoming a zero.
Is the comfort of a 20% salary increase worth the decreased equity? Is the equity risk level at the small company too much for your risk appetite?
Startup comp introduces all sorts of questions in a way that compensation at Big Tech mostly avoids. Just another hurdle that great founders need to clear as they attract the best talent to their startups.
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