A promising startup offered me a role with a $75K base salary, but they're dangling the carrot of equity – 0.5% to be exact. Currently, I'm making $110K as a Senior Accountant at a well-established firm.

I'm torn. The startup is in a space I'm passionate about, but the pay cut is substantial. How do you evaluate the value of equity when considering a career move? Is it worth taking the risk for the potential upside?

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Run some hypothetical numbers and ask if there are obligations for future capital calls and potential dilution.

You are giving up 35k a year, let’s assume for 5 years and a total of 175k. The company would need to be worth 35m to break even and you would need to wait for a liquidity event to get the cash.

What’s the value of the .5% stake now? How much funding have they raised to date and how much will they need to raise in the short, medium, and long term.

But really ask yourself why they are making this offer. I’m skeptical of any startup that is offering a non senior level exec equity in exchange for a 35k annual pay cut. That’s a company desperate to reduce cash expenses and a red flag to me about future prospects.

Only you can make this decision.

Agree with the above, but offering a different take below. Without more information (value/vesting/future obligations/RSU vs options), we can’t help you here.

Unless you’re given RSUs that are immediate vested and you can make an 83(b) election, i tell people you should always value the equity at zero.
Here’s why:
1. It might be years before you have a liquidity event
2. Company can fail within a year or 2.
3. Any future fundraises might dilute your value today
4. Long term vesting schedules.

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