First, assess where the start-up sits on the start-up lifecycle. The earlier they are, the more equity you’ll get and less take-home pay, and the later-stage they are, the closer to market salary you will be (but with less equity upside).
If you are coming into a start-up with a significant career/role change, expect to receive less than what you were previously to begin with. But role progression and pay is not linear in start-ups, so this can change quickly.
Pay does tend to be lower but there are also opportunities for rapid growth too. Pay disparities are increasingly disappearing with the tough recruiting environment everyone is currently operating in - which is good for you as a job seeker!
Equity is super tough to understand when a company is private. The tricky thing about start-up equity is that you should value it as $0 until it’s not. And then it’s critical and can be significant in terms of upside. Ask questions about how often equity is reviewed, how often you will have the opportunity to receive more, what the conditions are for exercising if/when you leave the company. Ask about accelerators in change control moments! And sign your documents when you are issued equity! I have been through one exit where some employees hadn’t signed and they missed out :-(
Depending on the stage of the startup and especially for early stage start-ups, it’d be reasonable to expect a 20-40% haircut relative to pay in a corporate environment. Most earlier stage start-ups have longevity front of mind, and this often translates to mindfulness around cash burn and runway. The plus side is the pay gap between the corporate and startup world can often be negotiable through shares or equity options in the startup, that way if the startup does well you’d be able to share in the longer-term success of the company.
All in all I’d say pay is ok, if it’s high on your criteria list for your next role you may not find early-stage startups the right environment. But if you’re hungry for awesome career growth experiences and willing to be flexible with a more diverse compensation structure, the startup world can be quite the ride!
Pay is quite dependent on the stage of the company, but (in theory) this should be offset by equity. If I join a seed stage company, I expect to make enough to eat and pay my bills, but I’d expect my equity in the company to be significant. At a Series A stage, I’d expect to make 10-20% under market, but this would be offset by a meaningful tranche of equity still. By the time a startup is quite well-funded at Series C or D, I’d expect them to be paying at or above market, especially if equity is off the table for all new employees at this stage.
Given the pay is likely to include a lower cash component than professional services or corporate roles, if possible it is ideal to negotiate an equity component into the total remuneration package.
Pay rises are generally not scheduled and need to be negotiated with the company as required. The ability of the company to offer you a pay rise can often be constrained in its start-up and growth phase with limited cash flow and funding.
This depends so much on the startup, their stage of growth, and the experience you’re bringing - BlackBird has a great baseline guide though. Personally I would never take a role with exacerbated risk without also getting equity in the company - there is no point joining a ‘unicorn’ early if you have no skin in the game.
The earlier stage it is, the more equity upside there should be. This is also largely to compensate for the startup’s ability to pay market rates for the role.
You pay for a lottery ticket with blood, sweat and tears. Work-life balance is for cushy mature tech companies and the perk is the autonomy + impact you are able to deliver with every action vs a larger org.
It’s convenient for startups that they’re not expected to pay as much as corporate, but then they need to make up that difference elsewhere (e.g. more enjoyable/ satisfying role/ work, equity, growth opportunities)
If you are starting out your career in a startup, do not focus on the salary you are offered. Focus on who you will learn from and/or the opportunities the startup will give you. The money will come later.
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