Question to HN: How do you negotiate for a raise when cash value is below market rate but plausible equity value goes moderately above (risk adjusted)? It seems that in the negotiation you have to take a pessimistic view regarding company outcome. Or would you negotiate for higher equity instead of salary?
First decide why you want the job. There are good reasons to work at an early-stage startup, the pace of work will stretch your capabilities exponentially more than a stable job will (from personal experience). The skills I developed working at a startup were worth more in hard $$ after I left than I made working there.
If your primary motivation is financial, you need to think carefully. You are taking an irrational and outsized risk as an early employee if cash compensation is below market. But people play negative expected value games all the time at the casino.
Even if the expected value of the equity is "above" market, the variance on that projected equity is significantly worse for you than getting it in cash.
Either way, you should push for roughly market cash compensation, framing it as "your expectations." I have said these exact words before: "The salary figure is definitely below my expectations (which is $___), I'm worried this won't work out." And then pause to get more information from them. Remember, your expectations are framed by your alternatives, which makes it easier to walk away. Best thing is to have another offer, if you don't it's not the end of the world though. They still have to fill the position, which is leverage for you.
Market rate doesn't matter - what matters is what you can negotiate. The idea that you can swap one $120k engineer in for another is a ridiculous story that employers tell their staff, usually to avoid a discussion about salaries.
What matters is how much added value you bring to the company. The difference between your value and your salary is (in some sense) the profit that the company makes on you.
Further, is it your assessment that the plausible value of the stock brings you in just above market rate, or your bossess? Even if they're right, why be happy getting a bit over market rate, if you think you could get more?
