Here is the compensation equation, as I see it:
- Equity - how much ownership one has, and when (roughly) it will be worth something
- Wage - how much salary one recieves
- Career - how the position advances one's career
- Life Balance - what types of time (and other) sacrifices are required
- Peers - how much one enjoys / benefits from working with the people one works with
- Work Itself - how interesting one find the work / industry / technology
In my experience, whether they realize it or not, this is the equation that determines if an employee (or founder, for that matter) thinks working for the start-up is "worth it" - and determines when the employee decides to leave.
For example, a founder might look like this:
- Equity - very high, 30% ownership stake
- Wage - at least 40k less than they could make elsewhere
- Career - very good for the career, even if the start-up fails (lots of learning)
- Life Balance - terrible. Divorces, unhealthy habits, etc.
- Peers - hopefully high, since the founder is one hiring these people
- Work Itself - very high - it's their baby, their dream
It's not really about the details - it's more about how this equation is balanced.
So my questions are:
In your experience, how does this equation change over time as a start-up grows from early stage (beta customers) to later stage (flirting with profitability, hundreds of customers)?
How does one know when this equation is 'broken' for the current start-up, and should begin looking for a new start-up to join which gives a better equation?