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Negotiating a pay raise without equity - Startups Anonymous
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Negotiating a pay raise without equity

I am approaching the 1-year mark of working at a startup. The two founders brought me in as the #3 guy (we now have 3 more employees) but I was not given equity. We are privately funded through the end of next year.

I did receive a small pay raise six months ago. I am pretty sure I am the highest paid employee at the startup ($65k).

I do not have any equity nor a 401k, etc.. stock options have been promised but it has not been discussed recently.

What % of pay increase should I be asking for? Aside from performance, how else should I justify the raise?

If they say no or little raise, should I consider leaving?

  • You should’ve asked this question BEFORE joining.

    Unless you’re a key employee, you don’t have much leverage now since they have money to hire.

    Your options to negotiate are:

    1) I’m a key employee, I know shit and I will quit and not transfer my knowledge unless you up my equity.

    2) I feel screwed, you really should do the right thing (believe it or not this has worked if the the founders like you)

    Reply

    • I agree with you. How would you take the route of option 1 in a way that doesn’t damage your relationship with the founders?

      Reply

  • If the market is willing to pay you more than $65k with or without benefits you should leave. Not giving any stock to employee#1 is OK, not having a conversation with employee#1 about equity and keeping him in limbo is not OK.

    Reply

  • No hope here… no 1 and 2 are evil fuckers who just used u. Find better people to deal with and yes negotiate better before sign anything.

    So annoying, feel your pain….

    Reply

  • Thanks for the responses guys.

    I should have said earlier that i WAS given 0.5% equity originally and bought in for another 0.5% when i started. I meant to say that i was going to negotiate the pay raise without any regard to an equity raise as well.

    anyways.. i was offered a 4.5% raise and promised the ‘gift’ stock (not options) would be revisited soon. I accepted because I need the income now but I do feel shafted.. we have raised almost $1m through 2 different rounds and have a small but inconsistent revenue stream. all things considered i feel like the founders are taking the piss w/me.

    I will be looking to move on by the end of the year but they are paying for a professional certification that I’d like to finish before quitting.

    can they force me to cash out my equity when I leave? it might not be a bad idea I am not convinced our business model is going to work.

    Thanks

    Reply

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