

Evaluating a job offer? - csmajorfive

Hi guys, I'm about to take my first job out of college/grad school and I don't really know how to evaluate my offers and whether it's appropriate to haggle. Also what are some good resources to learn about the mechanics of stocks, vesting, etc?
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ardit33
It is always good to hagle, but with good spirit, and as long as you are
reasonable in your request.

Say something in the tune: I like your company, and I would love to work with
you guys, but on the compesation part your offer was in the low range. I got
an offer from another company, which I like too, and that was 10k higher and I
can't just ignore it. I'd like for you guys to come close to it.

They might come back with 5k more, or not. The best position to be, is when
you have more than one good choice, and have hard time to decide which one to
take. you have a lot of bargaining power, (psychologically), as you can walk
away from an offer.

Compesation is not everything, what you do matters to. As for stock options,
unless you are one of the first employees of the company, and you are being
offered a good chunk of options, they really don't matter. If you are joining
a company that is 50+ people, than most likeley options will be insignificat
(unless it was something like a future google or youtube, which is highly
unlikeley).

If you are joining the average startup, those options will take four year to
vest, and they probably wont be worth much. Actually, there is greater chance
they will be worth nothing. So, don't compromise your salary for those
options. Consider them just as a bonus, or perk. Usually, you have no
bargaining power over how much stock options you get (assuming you are joining
a mid size 50+ employees company). They often are set by the board, and
divided way before (e.g software engineers get this much of options, senior
engineers get more, etc...).

~~~
mechanical_fish
I'll always remember my first encounter with employee stock options at a
startup company. (Not to be confused with startup founder equity, which
consists of actual shares of the company, and enough of them that you're
actually playing the game instead of watching from the bleachers. And also not
to be confused with employee options at a big Fortune 1000 company, which have
a fairly predictable value -- if you're smart enough to exercise them ASAP and
sell the stock, instead of pulling an Enron and leaving all your eggs in one
basket.)

ME: "I see I'm being offered 10,000 options. What does that number "10,000"
mean? What units is it in? What is 1 option worth?"

STARTUP GUY: "It depends on how many shares are outstanding, and what the
share price is."

ME: "Well, how many shares are outstanding?"

GUY: "Right now there are, um, something like X shares. I don't really
remember. But it doesn't really matter to you at this point, because we can
always issue more."

ME: "Um, okay. And if you go public, my options can be converted to shares,
which will be worth whatever people pay for them... but we have no idea what
that will be, because it's in the indeterminate future, and right now this
company consists entirely of debts and handwaving."

GUY: "Right."

ME: "What if you sell the company before we go public? Then our company's
stock never formally trades on a market, so I have options to buy something
that is never going to exist. How do the options get evaluated then?"

GUY: "Well, the board has to decide how to compensate the existing option
holders."

ME: "Hmm. And they can decide to pretend that my options are worth...
whatever? Down to and including zero?"

GUY: "Um, yeah. Technically. They'd probably try to make you guys happy."

At which point I decided to never, ever think about employee stock options
again. Just pretend they are like those Certificates of Achievement that
managers give you when you've worked a lot of overtime -- don't throw them
away, but stick them in a file somewhere and forget about them. And, as it
happens, that worked out just fine.

~~~
rcoder
This is absolutely right. Options are a lottery ticket, and nothing more.

My brother is currently working an awful, low-paying job with a startup
because he has visions of a big stock payout dancing in his head. They
continue to nurture and encourage those visions, despite having no prospects
for an IPO, and only marginally more for a buyout.

------
mrtron
The best advice I received was to not focus on money early on as a way of
determining what job you take.

Focus on what you will be doing, who you will be working from and so forth.
Programming is a skill where a experienced coworker can help you progress
rapidly.

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csmajorfive
Thanks guys. The situation is I've got a couple of very similar offers from
companies in the < 50 employee range. One is probably 30 people and the other
is nearing the 50 line. Both companies are in the bay area and about a year
old. Both positions are for software engineering.

As for haggling, the thing is -- they're both good offers. I can't reasonably
expect more out of school and they're pretty much identical so I'd be bluffing
if I said "well I have a better offer.." I just want to know whether I'm
expected to try no matter what.

~~~
comatose_kid
If the offers are similar, you should probably focus on how smart your co-
workers are and what you will be working on / learning.

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edw519
Negotiate a 6 month review instead of the usual one year. If you're any good,
you'll get your first raise 6 months early. You may want to say something
like, "The salary is not quite what I was hoping for, but I want to get
started here so badly, I'm willing to accept it. I plan to do such good work
that we'll both see that a 6 month review makes sense." How can they say no to
that?

~~~
staunch
I've seen multiple people become disgruntled trying this method. People very
quickly forget the verbal deals made at hiring and by the time your early
review roles around you might be working for someone else that wasn't involved
in hiring you.

I think you're _much_ better off just pushing for the salary you want in the
beginning. You're in a more equal negotiating position at that point and it's
when companies are used to haggling over salary. It'll be far easier for the
hiring manager to argue "We need to bump our offer up $10k to get this guy."
than "It'd be nice if we gave Peter a $10k raise right now."

This is due to the same forces that make it easier to quit and get a 50%
salary increase at a new company than to get a 15% increase at your existing
job.

~~~
edw519
A verbal deal isn't.

------
theremora
here is some basic negotiation advice
[http://jobhacks.wordpress.com/2007/08/08/offer-
negotiation-t...](http://jobhacks.wordpress.com/2007/08/08/offer-negotiation-
the-sht-hits-the-fan/)

regarding the comment to mention another offer, that is cool if you really
have one. It wasn't clear if the poster was recommending a "bluff" which is
not a good idea at all. More important than the offer is how will the
experience increase your value in the market.
<http://jobhacks.wordpress.com/2007/08/01/career-equity/>

~~~
icky
> It wasn't clear if the poster was recommending a "bluff" which is not a good
> idea at all.

It can be, if you don't _need_ the job. ;-)

~~~
edw519
In the long run, a "bluff" is a real bad idea. What right will you ever have
expecting open honest communication from someone else if one of the first
things you ever did to them WASN'T?

~~~
icky
For something like "expected salary", you want to be optimistic. ;-)

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theremora
regarding options and anaylysis, Venture Hacks is an excellent resource, here
is a specific post <http://venturehacks.com/articles/option-pool-
shuffle#more-11>

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mpc
location? what will you be doing?

