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You can write an article claiming that anyone doing x is probably getting screwed, if you choose numbers that make it a bad deal. In my experience (which at this point is pretty extensive) the numbers he uses here are extreme outliers.

I'd expect a startup that was only able to raise money at $2m pre to be giving the first employee way more than 1%. How much more depends on how good he is (a factor that's not even considered in this article). Someone as good as the founders could reasonably expect 15%.



Interesting that your figure seems to be similar to the number another commenter came up with (assuming this guy is as good as the founders).

What do you think of his reasoning? [edit: from 7th para at http://news.ycombinator.com/item?id=2949795]

"What he should do if he actually wants to work on the startup: First, he needs to value his contribution to the company over the next 4 years appropriately and put a number on his "sweat equity". Let's say his market salary is $100,000 and he's being paid $50,000. Now add to his base salary: benefits (15% for health insurance, 401k matching), job-loss risk (25%, since typical severance offers are 1/4 tenure at current salary), career risk and opportunity cost (15%), and overage hours (30%, assuming a 50-55 hour work week). That's $185,000 per year. Take that, less the $50,000 he's making, and his sweat equity is $135,000 per year. Over 4 years, that's $540,000. The company's valuation is $2.5 million, "pre" to his contributions. He should be getting about 16% of the company, assuming he remains for 4 years. This number seems high, but if he's there after 4 years he will have been there almost as long as the founders, so it's about right."


It's been my experience that they get about 3% or 4% and if they are good they get more in subsequent bonuses. Usually totaling to around 5%. If they end up in an executive role they get about 7% to 10%. But maybe YC companies have different metrics than my local TO startup scene.

I received 4 subsequent bonuses in about 20 months before leaving a successful startup tripling my stake, but I was employee 20.




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