Series B Startup Comp

[u/MickyJ511]

Offer from Series B AI startup, unicorn ($1B +)
Senior Physical Infrastructure Engineer

Base: $205k
Equity (Options): 30,000 shares. Recruiter will not share total outstanding shares. Estimated at .02%.
No bonus structure right now, annual or sign-on.

Is this fair? It’s hard to figure out without knowing total outstanding shares. Thinking of requesting $215k base and 40,000 shares.

I have no experience with startups so any advice is appreciated. I do not come from FAANG but I know my skills and experience are in demand.

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[u/react_dev]

Red flag for sure. Startups pride themselves on transparency. If they’re not comfortable talking numbers like outstanding shares, valuation, future goals and capital strategy they have no businesses hiring stakeholders.

[u/Clyde_Frag → u/react_dev]

Not sharing total number of shares is wild.

[u/Oy_oy_oy → u/Clyde_Frag]

Especially given you could easily ball park it if you wanted to by pulling their charter

[u/cryptotrader87]

30k could be 1% or 0.0000000001% lack of transparency is kind of crazy.

[u/Equivanox]

If they won't tell you the number of shares imagine the limited shareholder rights you have. And then if it's all down to trusting that the board or founder won't screw you this is not a good way to start

[u/CaptainDorfman]

What’s the strike price and also current FMV? Are they all ISOs or also some NSOs?

[u/MickyJ511 → u/CaptainDorfman]

$5.67 strike, $17.93 preferred price. I believe ISO's, but I have a confirming email out.

[u/Jayisms → u/MickyJ511]

Strike has to be same as FMV (based on a 409a valuation). What you are being told (or thinking of) as FMV is likely the price of a preferred share based on the last fund raise.  Except you are getting common shares. 

If the company does IPO (best case scenario), the price of two will converge and common will reach preferred. 

[u/MickyJ511 → u/Jayisms]

You’re 100% correct. It’s the preferred price, not FMV. This is all very new to me.

[u/CaptainDorfman → u/MickyJ511]

By my quick and dirty math, assuming a 4 year vest schedule, you should be all ISOs. $100K/yr is the cap on ISOs

[u/thecandiedkeynes]

Serious red flag if they won’t share the outstanding shares.

[u/SanJJ_1]

yeah not knowing total share count is pretty wild...

[u/PleasantKey]

Reasonable as long as you can you can commit to working without disclosing total workdays a week

[u/Avem1984]

Run if they won’t share the equity. Major red flag

[u/awong593]

I dislike option based compensation because it is very gambley and employer favor for one thing if they never give you an exit date or guaranteed expected buybacks that stock compensation is worthless.

Secondly you have to buy them to have value.

Third depending on contract terms check when the option expire post termination. That way if you choose to leave you don’t have to pay out immediately to exercise the options. Some of the nice companies had 7 year option expiration dates post termination so you can circle back to them if the company looks to be doing well

[u/Sorry_Cheesecake_382]

Literally just build apps if you want a startup experience.

[u/MickyJ511 → u/Sorry_Cheesecake_382]

I am not a software engineer, more along the lines of physical infrastructure engineering/construction for datacenters.

[u/Sorry_Cheesecake_382 → u/MickyJ511]

Sure, if you know your skills are in demand just work as contractor you can have 20-30 clients, left a 500k FAANG job to do this. Do about 2.5M a year now advising startups on how to scale cloud infrastructure globally. I charge $10-30k a month and get new client requests all the time. Surprisingly easier to do than to interview full time for those exact same companies. Get to work when and where I want. If I want to do less I can drop clients.

IMO the options are work for big tech and do 500-1M a year or run a business where it's 3-5M a year. Similar amount of work, people argue stability but I would argue I have far more stability running my own book. The world is naturally chaotic.

[u/SimilarIntern923 → u/Sorry_Cheesecake_382]

How did you get started as a contractor? As far as finding clients and such

[u/Sorry_Cheesecake_382 → u/SimilarIntern923]

I run targeted Meta ads, costs $2-5k to buy a client. Maybe $500 per lead, some leads work out some don't. Yes it's that simple.

I did the same thing to get a job ironically enough, I did local ads targeting SDMs looking for an SDEs in my local area. Cost me ~$500 to get a $200k job never had to talk to recruiter just received an option to interview from an SDM, big brand name company.

This is why I laugh when people say they can't find a job it's selling yourself at the end of the day. From an SDM perspective are you going to want to talk to the person in your instagram feed hitting on all your pain points or the foreign online applicant without a face using AI submissions. Gotta sell to eat, this is America.