| ||Ask HN: How should I evaluate an equity offer vs. hourly rate?|
3 points by peanut_merchant 49 days ago | hide | past | favorite | 5 comments |
|I've been made a purely equity offer at a unfunded early stage startup and am able to complete the work in my spare time outside my day job. I have a rough estimation of the amount of hours required and I obviously know how much I earn at my current job. I do believe in the product, but I am realistic about the chances of success.|
The offer is based solely on milestone deliverables, and will vest when those are complete. I'm trying to assess what percentage of equity is a reasonable offer. There is no dilution protection and I'm not guaranteed any more work or stock after the deliverables are finished.
Essentially my inputs are: hours of work required, my current salary at day job, finger in the air valuation decided by lawyers/founders at time of formation.
My inclination would be to do something like this:
i.e. (current hourly rate * risk modifier) as a percentage of valuation.
I'm struggling to come to what that risk modifier should be though, that article suggests 2x. Any thoughts?
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