

Ask HN : As an Early Employee | Equity vs ESOP? and how much? - yinchin

I have been working in a startup for quite some time now. Recently they have raised seed capital so now going to formalize stuff. They have given me an option to choose between Equity or ESOPs.<p>I am confused, what should I choose? Points to consider are : Equity are subject to dilution in later round of financing, but gives more control (i think), where as ESOP have some strike price associated with it?<p>Please tell me the parameters on which I can take a decision?<p>Secondly how much is the acceptable range of equity for first few employees in a web startup?
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codeonfire
Equity may get diluted on number of shares but the firm gets cash for selling
the shares, so each share is worth more than before.

Things to consider are vesting period, option expiration, strike price, price
per share.

Personally I would choose equity. Options may be out of the money and never be
exercisable. Valuing options for a private company is difficult. You probably
don't get to look at financial statements, so you have no idea what the
underlying stock is really worth. Without this it's impossible to correctly
value the options.

if the company is sold at a low pps, at least with equity you would get
something.

