Should you take that Director offer at a startup worth $25 million or $250 million?
When it comes to base salary, the gap might not be as large as you expect.
Look at a Director in Data, for instance. At a startup worth $25 million, the base salary for that position is currently around $193,000. At a much larger company worth $250M, the salary starts at $215,000.
That's a solid jump, but 11% is not a chasm.
There are certain functions where comp just naturally begins at a higher level (Eng in particular). And of course the specializations matter here. We didn't chart the AI/ML eng data but it is growing super quickly at the moment.
Other functions like HR or Design have larger gap jumps, but on the whole candidates should expect between a 12%-18% boost in base for a 10x jump in company valuation.
BTW, a $25M company is likely ~Seed / Series A while a $250M valuation is around Series C-ish.
๐ข๐ธ๐ฎ๐, ๐ฏ๐๐ ๐๐ต๐ฎ๐ ๐ฎ๐ฏ๐ผ๐๐ ๐๐ต๐ฒ ๐ฒ๐พ๐๐ถ๐๐?
On the one hand, equity grants at the larger company will be much smaller. Probably something like 75% less equity (expressed as a percentage of total diluted shares) than the offer from the $25M company.
On the other hand, the equity from the $250M scale-up is much more likely to end up resulting in some value, as the equity from the small company remains at high risk of becoming a zero.
Is the comfort of a 20% salary increase worth the decreased equity? Is the equity risk level at the small company too much for your risk appetite? Such an individual choice.
Of course the content of the role is likely very different as well.
๐๐ถ๐ฟ๐ฒ๐ฐ๐๐ผ๐ฟ ๐ฎ๐ ๐๐ต๐ฒ ๐๐บ๐ฎ๐น๐น๐ฒ๐ฟ ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐
โข In the weeds every day building the function. Lots of IC work. Dips toes into all sorts of problems and projects.
๐๐ถ๐ฟ๐ฒ๐ฐ๐๐ผ๐ฟ ๐ฎ๐ ๐๐ต๐ฒ ๐น๐ฎ๐ฟ๐ด๐ฒ๐ฟ ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐
โข Much more about managing teams, communicating cross-functionally, managing up, generally speaking. Although maybe with the advent of AI this is less true?
No right answer! Everyone has different risk tolerance and need for current cash.
As it is often stated: are you optimized for learning or earning?
Startup comp introduces all sorts of questions in a way that compensation at Big Tech mostly avoids.
BTW, dunno if you noticed in the graphic - but Carta Total Compensation, our comp product that helps founders build the best compensation benchmarks anywhere in private tech, is now powered by over 1 million startup employee records.
Largest such database anywhere in the world ๐
------------------------------
Peter Walker
------------------------------