I've seen startups willingly train their new employees to think about equity in broken or meaningless terms. Early in my career I sat through a discussion of equity with a VP of engineering where they explained that our options would always be priced ~$4 on acquisition and $12 on IPO. The finance people would always just make it work that way regardless of the number of options in the pool and the total valuation.
I also once joined a company to be told 3 months in that the board was not approving any new-hire grants as the valuation/appraisal work had expired - and that it wasn't reasonable for me to ask them to pay 90k just to approve the options they had granted.
At this point in my career having worked in FAANG, I wouldn't value private equity at all unless I could take 20-50% of the company. It's not even a lottery ticket anymore, and has just become a way for executives to exploit information asymmetry.
I'd be curious if any startups have explored venture debt arrangements with employees to guarantee that they receive meaningful deferred compensation. Or if there are other mechanisms to publicly show that the equity is meaningful in most successful outcomes.
I also once joined a company to be told 3 months in that the board was not approving any new-hire grants as the valuation/appraisal work had expired - and that it wasn't reasonable for me to ask them to pay 90k just to approve the options they had granted.
At this point in my career having worked in FAANG, I wouldn't value private equity at all unless I could take 20-50% of the company. It's not even a lottery ticket anymore, and has just become a way for executives to exploit information asymmetry.
I'd be curious if any startups have explored venture debt arrangements with employees to guarantee that they receive meaningful deferred compensation. Or if there are other mechanisms to publicly show that the equity is meaningful in most successful outcomes.