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Stock Options Q&A and Videos

About Stock Options

One of the most misunderstood and confusing components of tech compensation - This pay mechanism is reserved almost exclusively to those working at earlier stage startups.

What do you think is a fair amount of equity for a first developer of the team?

Medior Software Engineer at Taro Community profile pic
Medior Software Engineer at Taro Community

Right now I am helping out at a startup with 0 revenue. It's a fun group to work with, hence I am helping them out.

There's a CEO and CTO. CEO has been working on it for 1.5 years, CTO for like half a year. I have just started out for about a month. The company has 0 revenue and 0 investors yet. CEO is just giving a projection of equity sharing. There might be a CMO joining soon.

CEO is suggesting following equity share:

  • Founder 1: Himself 57%
  • Founder 2: CTO 16%
  • Soon to be Founder 3: CMO 8%
  • Investors Seed / Series A: 13 %
  • Options Pool: 5%

I am like the first developer, and he's suggesting like 0.5% of the option pool. They claim it to be a fair amount since he and CTO have made way more sacrifice so far. Right now I make sacrifices too. I am spending my nights and time in my weekend on it without any pay. And I don't have the knowledge of CMO.

I don't know much about reasonable percentage for this kind of stuff it's new to me.

But right now we're not getting any profit and I am sacrificing nights and time in the weekend on the project so I think it would be fair for founder 1 and 2 to give me some of their percentage and give me like approximately 10% or something.

So far it's been fun: Thinking if things go well, we can all become millionaires. But this 0.5% percentage doesn't fit in with that. It's a rather demotivating percentage.

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