

Ask HN: What's the fair amount of equity for a VP of Engineering in a startup? - trumbo

I am offered a position in a medical technology startup in exchange for 5% of equity. Is this a fair amount?<p>Are there any points of reference on how to make this evaluation?
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brk
Will you add more than 5% of value to the company? What do other execs have?
Is it late stage, or early stage?

5% seems somewhere between about right and a little low, depending on the
factors above ( plus others).

Also, step back and think about the big picture. A typical startup will have a
CEO, VP of Engineering, VP of Marketing, VP of Sales, CFO, VP of Biz Dev (
maybe not all of these in all cases). If they each got 5%, that's 30% right
there, which is quite frankly probably high, depending on the funding.

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trumbo
It's fairly early stage. The project was initiated 6 months ago, but it's not
funded yet. They are still working on building a working product. The website
will be 1/3 of the overall product strategy.

The titles are meaningless at this point because I am also doing marketing and
strategy. What I am told is they want to work out an equity strategy based on
milestones I deliver. The first milestone, they said, would be the entire
website, fully integrated with the proprietary app they are building.

Is this reasonable? Especially considering that the site is an essential part
of the product.

I heard elsewhere that an alternative is to use the "sweat equity" algorithm.

<http://www.torquepowered.com/community/blogs/view/16191>

But seeing as we are all working remotely, it'd be hard to ensure that
everyone is working fulltime on this project.

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brk
This is just off the cuff, but based on having a fair bit of experience in
things like this...

What you're describing doesn't sound like the beginnings of a real solid
company. IMO, what you're most going to get out of this is experience and
resume fodder (which will likely be highly valuable in the future).

EVERYTHING is always negotiable. Rather than put up a shit fit up front, it's
probably best to take the 5% and start plugging away. You could push and argue
for more, but it's more than likely you'd be spending time arguing for a
larger stake of nothing (not trying to be negative), especially if you're only
being offered common shares anyway with no preferences.

IF the thing actually gets legs, than a large part of it will be due to your
efforts, and you won't have any problems arguing for a second grant during the
next funding rounds (which would pretty much obliterate any grants you get at
this stage anyway).

~~~
trumbo
I agree with you. Thank you.

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seasoup
Here is Aaron Patzers (founder of Mint.com) take on things.

[http://techcrunch.com/2009/10/08/startups-101-the-
complete-m...](http://techcrunch.com/2009/10/08/startups-101-the-complete-
mint-presentation/)

