The Increasing Burden on Startups to Convince Good Candidates to Join - Q4 Newsletter - Stock Option Counsel, P.C.
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
Happy New Year, Startup Community!
Here's our latest update from the world of startup equity on a new service from Stock Option Counsel and excerpts from a fascinating discussion at Hacker News on the increasing burden on startups to convince good candidates to join.
Tell Your Boss. We now offer on-site programs at later-stage startups to help employees and executives plan for future liquidity. Our CPA and financial planning partners present in groups or individual power sessions. This is a huge help to startup HR and finance executives who are restricted from providing individual advice to their employees and executives. Let them know this service is available so they can offer it as a benefit to you!
Startups' Increasing Burden in Hiring Top Talent. We counsel individuals on negotiating their startup job offers. We see on a daily basis that startups have to make meaningful and well-designed equity offers to recruit talent from big tech. Here's some excerpts from a fascinating conversation on this topic at Hacker News:
Waving a fraction of a percent in equity in front of candidates simply does not work anymore. … Coming into 2020, I think startups’ best bet is to [be] transparent and honest with candidates about all risks involved when joining a startup and factoring all this into the amount of equity they offer which should be something considerable. - Zain Amro, a software engineer based in Berkeley, California, from his blog
I believe [Zain's] post does a very good job of bringing the elephant in the room into the discussion. The current structure of equity compensation for early-stage startup companies is simply not enticing enough to get people to choose that over the salary and predictable path of BigTechCos. ... We should ... give more equity to early employees and have favorable terms around vesting for these employees and better timing around the loss of options after leaving a company. … Ensuring your early employees will be taken care of means they'll work harder for your company and this will increase the chance you'll survive long enough to see an event that makes anyone a return on their investment. - Grimm1 at Hacker News
This is easy. Offer relatively competitive TC with a real potential upside to the equity package and a work environment that's attractive. BigCorp is mired in politics and decision-making that's grounded in risk mitigation. Do something legitimately interesting and folks will come. Give them some agency and the ability to really get things done and they'll stay. - halbritt at Hacker News
What’s a more democratic funding model to spread net innovation? - bhl at Hacker News
There are already 372 comments in the discussion. I hope it grows in 2020!
Stock Option Counsel, P.C. - Legal Services for Individuals. Thank you for all your enthusiasm for my practice and for the Stock Option Counsel Blog. It's been another great year. I will continue to send quarterly updates on important topics in the market for startup equity for individual founders, executives and employees. Please keep in touch and have a very happy 2020!
Best,
Mary
Mary Russell | Attorney and Founder
Stock Option Counsel, P.C. | Legal Services for Individuals
(650) 326-3412 | mary@stockoptioncounsel.com
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
Best of Blogs: How to Value and Negotiate Startup Stock Options
NOTE: Updated February 23, 2016.
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
We have suggested the following free resources to Stock Option Counsel clients to help them master this area and gain confidence in negotiating their stock options and other employee stock.
1. Leo Polovet's' Analyzing AngelList Job Postings, Part 1: Basic Stats & Part 2: Salary and Equity Benchmarks
2. Venture Hacks' I have a job offer at a startup, am I getting a good deal?
3. Andy Payne's Startup Equity for Employees
4. Mary Russell's Startup Equity Standards: A Guide for Employees
5. Wealthfront's Startup Salary and Equity Compensation Calculator (This is very general but people find it helpful.) And Wealthfront's The Right Way to Grant Equity to Your Employees.
6. Patrick McKenzie of Kalzumeus Software's Salary Negotiation: Make More Money, Be More Valued
7. Piaw Na's Negotiating Compensation, from An Engineer's Guide to Silicon Valley Startups
8. mystockoptions.com's How does a private company decide on the size of a stock grant? (You may have to create a login)
9. Michelle Wetzler's How I Negotiated My Startup Compensation
10. Mary Russell's Video Negotiate the Right Startup Stock Option Offer, based on Mary Russell and Boris Epstein's Bull's Eye: Negotiate the Right Job Offer
11. Mary Russell's Joining An Early Stage Startup? Negotiate Your Salary and Equity with Stock Option Counsel Tips
12. Robby Grossman's Negotiating Your Startup Job Offer
13. John Greathouse's What The Heck Are My Startup Stock Options Worth?! Seven Questions You Should Ask Before Joining A Startup
14. David Weekly's An Introduction to Stock & Options for the Tech Entrepreneur or Startup Employee
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
Negotiation Rhythms
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
Salary Negotiation Method: Identify your BATNA, or best alternative to negotiated agreement.
We’ve all heard plenty of advice about negotiating.
The business world directs us to stay rationally focused, rely on exhaustive preparation, think through alternatives, spend less time talking and more time listening and asking questions, and let the other side make the first offer.[1]
The psych world counsels us to listen first, sit down, find common ground, move in, keep cool, be brief, forget neutrality, avoid empty threats, and don’t yield.[2]
These tips don’t have much meaning without knowing the underlying principles of negotiations, and studying tips alone is about as meaningful as learning dance steps without ever hearing the music.
The following three-part series presents the rhythm of negotiations as described in the Harvard Negotiation Project’s Getting to Yes: Negotiating Agreement Without Giving In.[3] It should be useful for those first learning to hear this rhythm and for those who have been dancing since the bazaars of their youth who may need to go back to basics to learn some tricky new steps.
Read on!
#1: Zone of Possible Agreement
#2: Best Alternatives to Negotiated Agreement
#3: Sales & Threats
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
[1] Take It Or Leave It: The Only Guide to Negotiating You Will Ever Need http://www.inc.com/magazine/20030801/negotiation.html via @Inc
[2] The Art of Negotiation | Psychology Today http://www.psychologytoday.com/articles/200701/the-art-negotiation
[3] Roger Fisher, William Ury and Bruce Patton, Getting to Yes: Negotiating Agreement Without Giving In.