Pre-seed stage startup compensation evaluation

Question

I joined this pre-seed stage startup as the first engineer after undergrad and have been working here for 3 years. I was offered 1% equity in my second year and another 1% in my third year with a standard 4-year vesting period. In total, I have 2% equity. We have a year of runway if we don't raise any money. I firmly believe that we have built a great product and expect users to grow in the coming months. We still have not found product market fit and our paid subscribers are in the low single digits.

I'm responsible for the entire tech stack, product ideas, and data infrastructure. We are a team of 6 people and there is no CTO in the company. Given that we have only one year of runway I feel I'm taking more risk and should be compensated more in terms of equity. Since I don't have much experience in judging what's fair equity compensation I'd like to know your thoughts. Thanks in advance.

Compensation structure:

1. Base Salary: Rs. 24 lakhs (~$29k - I'm living in India. As per levels.fyi, my base salary is a bit more than the median TC for software engineers in India)

2. Bonus: 30%-50%

3. Equity: 2% (~ $200k)

4. No benefits like health insurance or paid vacations.

My questions:

1. Should I ask for more equity and if yes, how much?

2. What do you think about goal-based equity release? I find it motivating to work towards a goal for more equity but it seems hard to structure this.

3. Given that it's a pre-seed startup, what kind of benefits should I ask for?

madscience · Accepted Answer

I'd say it can't hurt to ask for more equity for sure, I like the idea of a goal-based incentive too. It might make it easier for the founders to stomach and understand.

With regard to benefits, I found it to be most helpful to just get a cash reimbursement and allow me to get whatever benefits I see fit.

raisinbran · Answer

This is actually a generous amount of equity. Do you know how much you'd be paying to exercise your options? That should be part of your calculus for what you should ask for in salary.

Pre-seed stage startup compensation evaluation

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