1/16 Fred Wilson says you should focus on the cash value of your
options, not the percentages:
http://www.avc.com/a_vc/2010/11/employee-equity-how-much.html
\_ Or at least, so says a VC trying increase his profit margin...
\_ A VC wants to keep as much of the stock for themselves (and give
as little to employees as possible). That maximizes their return.
The VCs also control the valuation process. When he says your
option grant should be based on the valuation, do you think he's
saying that because he has the best interests of the rank and file
engineers at heart? His suggestion also means that your equity
and your salary will be proportional. One of the biggest
bargaining points in startup salary negotiations is trading off
salary versus options (I'm not saying one direction or the other
is a good idea, just that it's an example of reality conflicting
with this guy's suggestion)
\_ If "you" is a founder then yes:
"Giving out equity in terms of points is very expensive" |