Recently, I've been given two offers. One is a large company that pays 90k/year for 6 months, with option to be made as regular employee with higher pay. The other is an early stage startup with the CTO and his dad whose started several businesses in the past. It pays 65k plus 5% equity.
I don't know what the better route is. With the large company, I can make a personal project on the side of my own. But with the startup, even if it fails, I can potentially jump onto another one (and hope for that nice payout later hehe). The CTO's dad is very well connected with businesses who are interested in the current MVP.
If the startup CEO is Peter Thiel, choose that. Otherwise take the other option.
There are many ways to look at this:
startups are a better alternatives if
your startup offer fails in all these.
Thanks for the overwhelming responses everyone. I guess with the larger company, I can still indie hack my personal project.
Just make sure to read and abide with fine print of your employment agreement about moonlighting. Do not talk about it to your teammates, big corps are about politics and finding negatives in others to pull down(more than people pushing themselves up :) .
Are you the first employee? 5% is too low for that. Are you employee #5-10? 65k is too low pay. Value equity at what it's currently worth: $0. Get a real salary from them, and accept equity on top as a bonus. Most equity is never worth anything.
The startup deal is awful: You'll be at the whims of a family managed business, and the way they over-estimate the worth of their own business they're either duping you in order to pay you less, or are clueless. Possibly both. Neither situation is worthwhile.
Supposing the startup makes it to IPO and you get to cash out your equity, how many additional investment rounds will they have gone through? Early employees get screwed over every day by having what they thought was 5% equity watered down in subsequent fundraising rounds, where the big investors ensure they have preferential treatment.
Even supposing the equity is worth anything one day, you're weakening your overall wealth by reducing the diversity of your portfolio. You're holding equity in the same entity that pays your salary. What happens if it goes under? You lose your income AND equity. Take the equivalent income and invest it in something completely unrelated to the startup, ideally unrelated to the tech sector.
What is your long term goal?
Five years down the line, do you want to be working for someone else (and probably making way more money than you need) or working for yourself (and make enough to live comfortably)?
If the latter, then I recommend choosing the option which lets you work as much as possible on your side projects.
Startup all the way. Golden handcuffs should be off of the table. There is nothing like the feeling of being part of a team that is creating. In my opinion comparing being a creator at a large company and at a startup is the same as comparing karaoke to a live musical performance of a song you wrote; one is beyond gratifying, the other, not so much.
You will get a lot more interesting experience at an early stage startup, especially if you join wanting to learn. If you're early in your career, I'd go for the startup.
It's really a risk/reward type thing, the startup has more potential for long term gains but 5% of 0 is still 0.
How likely is the startup to succeed and do you believe in what they're doing. You'll be working more for less money, so without that potential payout at the end it's easy to pick; and you'll also certainly need some type of passion for the project to get through the early stages.
25k difference isn't small change either. Can you live without it? Even if so, imagine how much better off you'd be in 10 years if you took that extra chunk and invested it.
There's also the question of culture, where do you think you'll fit in better. Some people are happy to take a pay cut to work in a small company.
Only you can answer these questions for yourself.
It really depends on your goals. I imagine in a startup environment it'd be hard to do any indie hacking. I would also consider how much the company would need to be valued for the 5% equity to be a factor.
The benefits of the startup is that you can network with a lot more people that are doing interesting things. Opportunity may arise. At a large company, you'll find yourself mostly alone in your indie hacking ambitions, but you'll be able to easily do your indie hacking.
Connections are a big determinant of success. In order for those startup connections to pay out though, you would need to push harder to do indie hacking and start-up work. Otherwise, well, it may be that you will never cash out on those connections.
Well, for a startup I'd be willing to replace my indie hacking with the job if the equity won't be too devalued...
This comment was deleted a year ago.
This comment was deleted a year ago.