• October 2018
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How do I negotiate equity as an early employee at a startup?

Definitely be honest with yourself and ask the hard questions. 

If you are willing to take a 50% pay cut then the company should be willing to get real with you about where they are financially at the moment, and their strategy for gaining more revenue and/or additional funding in the future. Don’t rely just on the current climate of the business, but consider the future and make sure the founders are being realistic about challenges, goals, and how they will handle those things. There’s no way to know for sure how a business will do in one year or two years, so there is definitely some risk to keep in mind.

Also, think about yourself. Let’s say the company sinks and you have been working at a 50% salary—what does that look like for your financial situation? If you are risking a lot, then allow that to reflect in your negotiations for more equity. Just know, there’s no promises that you’ll get that equity unless the business is totally solid and on the right track.

If you’d like to learn more about startups, take a look at my free eBook: How to Start a Business: An Entrepreneur’s Legal Guide. There’s some info in there that may help you understand the perspective of the founders and inspire more questions for you to ask them.

Legal is hard. Let’s tackle it together.

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