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I've been approach by a startup to join them. I'm currently making 80k USD as a developer, not knowing much about the startup world. What would you consider a reasonable offer from them? Knowing they won't be able to match my salary, they will compensate with stock options. They will be making me an offer tonight.

Is there other things i need to consider/asks before accepting the offer?

Thanks,

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3 Answers

up vote 5 down vote accepted

I would expect them to pay about 80k. Stock is a red herring.

First off there is a 90% chance that it is worth 0 dollars in the long run.

Second unless they are giving you stock regularly then stock is a sign on bonus not pay.

Third whatever you agree the stock to be worth, consider you won't be able to sell that stock for several years. Think of it like a risky loan. The value you get out of it is less than the dollar amount on the package because if you had cash on hand now you could put it to work for you earning money in some other investment.

Edit: Another thing to consider is dilution, if they don't have a lot of money to pay you then they probably haven't taken any investment yet. 2% of the company after a few rounds of investment is going to be closer to .02% of the company.

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up vote 2 down vote

There are so many variables here, that answering what is market etc. is a waste.

Where is the job located? How many years of experience in what skills do you have? What previous companies you have worked for? What level company is hiring you into, how many people you may mentor/manage? How much money company has raised in how many rounds? How much stock is outstanding? How many options they are offering and at what strike price?

I mean, we are talking $50K-$150K range here. I have hired a lot of devs, so I am not pulling this out of my behind.

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up vote 1 down vote

You didn't mention if they're funded: that would obviously be a big determining factor in terms of the salary you can expect. You should ask them how much funding they raised and ask to see the financial projections: they should have a line item that shows "software developer". That's what they've budgeted.

Most likely, they will try to pay you less but don't think it's a bad thing: they might simply be trying to save money to help the start-up grow. But overall, you should expect something along the budget line. And if they don't have a budget, then that's a real problem, for many different reasons.

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You can "ask", but as someone who has been through 7 companies and managed financials in most, I never heard of a reputable startup bothering showing an outsider financials. I would give you the burn number, but that is about all I have ever divulged. Asking for line items is really non of your business, unless you are an investor or senior level manager for that functional area. – Apollo Sinkevicius Sep 6 '12 at 19:54
Well, he may or may not be given access to the projections; but in terms of finding out the answer to his question, getting to the line item is the answer to his question. – frenchie Sep 11 '12 at 1:46

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