How Much Is Your Equity Really Worth?
Let this handy website help you.
Congratulations! You just got a job offer from a start-up that has cold brew on tap and conducts its meetings in a room that’s actually just a bouncy castle. Upon receiving your offer letter, one thing stick out to you — “equity” being offered in addition to salary. Maybe they’re giving you a ton of equity and not that much actual cash, along with the implied promise that once the startup sells, you will be rich. Sometimes that happens. But if you’re not comfortable with risking your livelihood on something that might not actually happen, there’s a website, designed by two New York City-based tech workers that want to help you figure out what the word salad of a job offer you just got means.
If you know what the company’s valuation is and how much funding they’ve taken, you can fill in the numbers and get a rough estimate of how much the shares you’re being offered are actually worth. This is especially helpful for those new to the start-up world who aren’t accustomed to the way tech start-ups talk about money. Matt Wallaert, one of the co-creators of the site told Mashable he created the site in part to make the weird slipstream of money and power in the tech world make sense for those who are unfamiliar.
“In tech, we often take for granted that everyone in the ecosystem just magically has all this tribal knowledge. We talk about ‘friends and family money’ like everyone has friends and family that can afford to just dump money into their ventures.”
The scourge of “friends and family money” as a given rather than an immense privilege extends beyond the tech world, but I imagine that it’s much more pervasive there.
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