Comp Offer from Start-Up Fund
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Do you have a good seat right now?
Even if not, would at least wait the 6-12 months and see if they grow. Base and equity in the offer are low, and if the founder is giving 20% for that seed check it is probably a bad sign.
This guy is taking you for a fool. Do not take that offer unless your current seat is worse and tell him to go f himself and good luck with his plans, doubt it plays out
I have seen this exact situation maybe 4-5 times in my career so far and, since I keep tabs on folks, a grand total of one of those firms actually scaled into escape velocity. So call is 20-25% odds it works out from a business POV, and then then place the odds it personally works out for you somewhere inside of that. Start ups hire who they can not who they want, so you may not actually gel with the PM or have bad individual performance.
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with your level of experience, you need to be playing for HSD % of carry, which is where I assume the phantom equity comes from. you should demand minimum 5% with outlined path to HSD, so the fact he started at LSD is a lowball. LSD of total carry at SM is a joke, that's a number for partner path at established $2B+ funds
Ignore title. 8 years of experience in the buyside, how many experience total? Maybe he shouldn’t discount your total experience.
Formulaic pay: 20% of first $10mm in firm earnings, 10% of next $10mm in earnings
5% equity as a floor on profits above and beyond with a reasonable vest and buyout clause (e.g. vest over 4 years, buyout at 3x earnings)
PM is unlikely to scale past $10mm in annual earnings for a long time so you would basically be a 20% partner, and forces PM to put money where their mouth is for scaling ambitions.
Would still evaluate your market value carefully, being a senior analyst at a top pod is probably better than being a 100% partner in this venture. The best founders aren't giving a 20% GP stake for a 100m seed check. If you really can't find any solid opportunities outside, the step down structure in profit sharing is what aligns incentives.
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