Startup salary survey

I think I’ve come up with what I think is a really cool metric to value the tradeoff between your salary at a startup and the equity stake that you are given. For lack of a better name, I call this “multiple of foregone income”:

Let’s say that your “market salary” is $ 100,000 (pulling this number out of thin air), and since you are joining an early stage company which 1. cannot afford your market salary and 2. wants you to have some skin in the game, let’s say that you agree for $80,000. Now, your “foregone income” is $80,000 per year since that is the cut you are taking from what you think is your “market income”.

Let’s say the company is worth 10 million dollars (as per the latest round of funding before you join, assuming there has been one) and they give you a 1% stake (which amounts to $100,000), then the “multiple of foregone income” is 5 years ($100,000/$20,000 per year). If the company gives you equity that is worth $200,000, then your “multiple of foregone income” is 10 years.

Now I’m trying to figure out what the “normal” range of this multiple is. For this purpose I’ve created this form that I request you to fill out. I’m not asking for any personal details, the survey is completely anonymous and it will only take a minute of your time.

Thanks in advance! In return for your participation in the survey, I’ll publish aggregated results on the measure!

One thought on “Startup salary survey”

  1. With a start up you aren’t betting on valuation, possibly option value of the stock. (Which might be priced in the valuation already)

    As with an option, lot of them might expire worthless, and it is personal preference.

    Do you want a 10% chance of being a millionaire, with 90% chance option expires worthless
    Or do you want a sure payout of 100k?

    Personal risk preference (or aversion)

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