A startup founder says job candidates focus on the wrong thing when negotiating their pay with startups - here's what they should look at instead
- Henry Ward, cofounder and CEO of Carta, says tech workers make a common mistake in evaluating job offers from startups.
- Those offers are typically heavy weighted toward stock options or other kinds of ownership stakes, rather than cash salaries.
- Job candidates tend to focus too much on how much those grants are worth in the near term and not enough on what they could be worth in the future, he says.
- Options can offer a huge payoff if a startup is successful - but they can also be worth nothing if its fizzles out.
Getting a job offer at a startup is exciting. But making sense of the pay package startups offer can be daunting and confusing.
Big, established tech companies such as Facebook, Apple, Amazon, and Google often have the resources to pay new hires ridiculous sums of money. But startups usually don't. Instead, in lieu of high salaries, they typically offer candidates equity in the company in the form of stock options or other kinds of ownership stakes.
Options give employees get the right to buy stock in a company at a set price. If and as the company grows and becomes more valuable, the value of employees' options can increase.
Understanding how much an offer of options or other equity is worth starts with asking the right questions, said Henry Ward, cofounder and CEO of Carta, a $516 million startup whose service helps companies manage their equity awards to employees. ...
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