What is a reasonable ask while negotiating with startups?
Should I ask for a match or hike of X% over my TC/annum (52lk Base + 8lk Bonus + Rs30lk RSUs), or should I negotiate only over the Cash (Base + Bonus) component?
A startup I’m negotiating with is not considering the RSUs I have and is offering a 8% hike only on the cash component, and is throwing in ESOPs (paper money) instead.
What do I do?
Lelo jo de rahe
In the current market conditions offers can get revoked on negotiation.
First hand experience
I’ll end up losing ~25lk this year if I do that. RSU is as good as cash which I can liquidate any time, unlike ESOPs which need a liquidation event.
Tbh, I can afford to stay put and not take the offer. While the role is interesting, idk if it’s worth letting go of the 25lk.
This shows that you r not confident on the company. It's better not to take if you can't take the risk
The prospective employer is being too clever if it thinks RSUs and cash are not the same. ESOP is for rewarding the early contribution you make. RSUs is compensation in non-currency asset class. Tell the HR to piss off.
I get the startup’s predicament too. They’re early stage and don’t want to burn cash, and they try to offset that with ESOPs (lottery, basically) instead.
I definitely do not want to burn any bridges because I loved talking to them and have very high regard towards the founders and the team.
Unless they're providing 3x esops, that is ₹30L * 4 years * 3 years = ₹3.6 Cr, it really is a bad deal for you. Most startups are going to be dog poop, yours won't be any special. Must ask them straightforward what is the value of ESOP they're providing?
Stick with your current company... You seem quite money minded (not saying this is bad)
Startup ESOPs are lottery tickets... But you already assume your lottery ticket is a losing one since you mention no details of company stage, domain, cap table etc. Or even what different exit scenarios may mean for you. If a startup is offering you 55LPA+, they are likely digging in deep as is in current economic scenario. But you are acting like that asking you to forego your salary.
Stay at your current company. Keep your fixed $$$ which keeps you in top percentile salaries at your experience, work on "translating company directives and initiatives" and chill. You won't regret it
I understand what you’re saying.
I can’t name the company because it’d straight up dox me. They are pre-valuation, seed funded (which was larger than some series B or series C rounds), entering a very very crowded market with an untested differentiation.
Also, I am being asked to forego a part of my compensation, no? RSUs (more or less) translate directly to cash in hand. Not my first rodeo with a startup, but had a bad experience with ESOPs earlier. Hence the hesitation.
Pretty risky, IMO. But might pay off it it clicks. Feel like sticking to the Current org will be a safer bet
Concentrate on base more. And explain them that RSUs and Esops are not the same . You would be taking a bigger bet here.
And may I know ur domain and experience?
I assume you are not desperate for a change. The last 10 yrs has taught you a lot, about people, business, risks.
Your salary of 60L, i assumr you must have saved decently.
Thus my opinion -
If the answer to all above is Yes. Seriously consider joining them, with salary hike and relevant esops.
If the answer to anyone is No, stop considering and go back to your current job.
In case you want anymore help, connect with me at 4sushant@gmail.com.
The only scenario where this makes sense from my pov is if you're bored in your current role and are looking for something exciting with higher ownership at the cost of reduced pay. If this isn't the case, I don't see why you should switch
More Esops only make sense if they will be raising another round in 2-3 years and you get to liquidate it else it's just paper. Not to mention if it's late stage startup valuation might even drop.
I recently cleared the interviews for a very well seed funded startup. I want to know how should I negotiate? HR has asked me to tell the expectations, how to benchmark it?
Also, how much ESOPs should I ask for?
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