{ "media_type": "text", "post_content": "How to think about getting a % equity in startups? Eg if a startup wants to give me 1% equity, does that get diluted over time? If there’s no IPO is there a way to convert the equity into cash?", "post_id": "61f031852a39150033110311", "reply_count": 4, "vote_count": 2, "bowl_id": "5ae4a4f739e7cb001391ec8b", "bowl_name": "Consulting Exit Opportunities", "feed_type": "bowl" }

How to think about getting a % equity in startups? Eg if a startup wants to give me 1% equity, does that get diluted over time? If there’s no IPO is there a way to convert the equity into cash?

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1. Yes, it will get diluted in every funding round to 1% * (1 - x%) where x is the new investors’ equity share.

2. Yes, if the startup does periodic buy backs. If at all this happens, there will be a cap on % of vested shares that you can sell.

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Some startups give equity refreshers for people in year 2+ and at promos. So you can accrue more equity to offset some or all of the dilution.

Ask about refreshers before you accept.

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Pretty sure if there’s no ipo you don’t get cash. It’s more of a gamble. I think you can always try and sell your equity to someone else and they buy into the idea of eventual ipo but there may be stipulations?

Wanted to clarify that in the case of startups gamble≠bad. You’d just need to thoroughly understand what you’re getting into

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