negotiating startup comp
get money, get hit with an unfathomably large tax burden
A friend recently emailed me asking for advice on how to negotiate her first tech job offer out of college. In many ways, this is the hardest part of any interview process. Here is the framework that I have always used that I find helpful:
Be prepared to negotiate. Every offer is built with the assumption that you will negotiate, so do not think that by doing so, you will offend or come across in a negative light. You won’t offend if it is done professionally and respectfully. It is infinitely harder to negotiate compensation once you have a job.
Negotiate with the right person. Negotiate with your recruiter, not your future manager. A recruiter understands how the process works and has done it many times before. Your future boss, on the other hand, may have an ego and less practice.
You own the process. Most firms will attempt to put time pressure on you, limiting time to reply to 24 to 48 hours. The vast majority of these are fake. Hiring is a hugely costly process for firms and replacing a candidate that made it all the way through their process because they needed an additional two days is nonsensical.
Set your timeline. Be sure to articulate a timeline for both the recruiter and yourself. While exploding offers are largely a hyperstition, processes that last overly long (5-10 days?) will go cold.
Know your bounds. You should know from the get-go what your market price is (or a range), even prior to entering the process. For late stage, Glassdoor is invaluable for finding these comps. For early stage, you have to rely more on backchannels from trusted peers. Alternatively— just cold email any solo-gp, or talent partner at a large firm, they’ll have a great sense for market comp. You should also get a sense of how the firm thinks about stock options versus cash.
Don’t lie. While inflating your next best offer by 10% is unlikely to cause career-ending harm, it does increase the chance the firm will walk away leaving you to take an offer you never actually had. How you behave in negotiations is a good indicator of how you’ll behave once hired – so be respectful, be professional, don’t ghost, and keep it reasonably accurate.
Interview the company. A negotiation process is a great way to learn what the culture you are walking into implicitly values. For example, why does a firm that holds that “titles don’t matter” care so much about title as part of the negotiation process?
Everything is a package. Good job offers are a mix of give and take in terms of equity/cash/title. You should have leeway on each while communicating which matters to you. The best packages I’ve seen are often a result of the candidate clearly articulating which of the three will move the needle, and then being open to meeting in the middle on the rest.
At the end of the day, make sure you want the job. Throughout the process, it should be clear that you actually care about the role. It’s a hell of a lot easier to slam the table for someone who is clear they’ll crush it and love it in the role if they take it than it is one who intends to use the offer as a stalking horse to negotiate their Stripe package.
Know when to walk away. Labor markets are very tight right now-- your worth as a candidate has never been higher. You shouldn’t feel pressured to make an offer work. You can always go back out in a few months and try again*.
* Know when to sacrifice: If you happen across a company that is a clear fit skill-wise and it is at its earliest days of hypergrowth, you should be willing to move on most points in order to join. Most errors in comp/title can be quickly corrected when a firm is doubling week over week. Just make sure you get the equity right early.