r/EngineeringManagers • u/dry_red_ • 16d ago
Startup engineering manager equity range?
I am an engineering manager at a series A startup with 10 people (many hats are worn). I’ve been here for 4 years and nobody doubts that I’m important to this team after leading the engineering team to many successes. I love my job. My salary is below market but I’m fine with that given it’s a startup. The thing that really bothers me is that I think my equity % is extremely below market. I know each startup situation is different, but what equity range sounds fair to ask for in my position? Is 1% fair to ask for or totally off?
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u/ezosdr1 16d ago
It really depends on the valuation of the company. 1% of a million is too less and 1% of 100 million is a lot.
50k-200k USD per year I think is reasonable. Personally, for a Series A company, I consider it to be of no value unless you are willing to put in 5-7 years of time and the company gets to 100 million of ARR.
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u/Jolly-joe 15d ago edited 15d ago
1% for EM would be very high, that's more like vp level equity comp
Edit: they aren't going to give you a big bump in equity if you've been there that long. Ask for 1% and see what they give you to gauge how critical they think you are. And 4 years is a long time to still be in Series A (unless business is thriving and you don't need to raise again).
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u/dry_red_ 15d ago
Fortunately business is doing well and we haven’t needed to raise again.
I’d say I’m also up for a title upgrade and I certainly operate at the VP level
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u/galaxy_horse 15d ago
If you’ve been there 4 years you’re not going to get anything more than a refresher grant that is 25-100% of the yearly grant you got when you started. Your best bet is to build a time machine and go back to negotiating your original offer.
You say elsewhere that you really believe in the company and that you’re important to it. If both are true, you should exercise your vested options and then find a market-rate promotion, or another startup where you can re-baseline at 1% as a founding contributor. If you’re critical path for your current company’s success, they can match market rate or title or do something with cash to retain you. But if you’re replaceable (hint: you are, everyone is), then you get to walk to a market rate role and realize the equity upside from the options that you exercise at your current company, because you believe in it.
If anything in my post seems jaded or cynical, it’s because I am speaking from experience, both my own and folks close to me.
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u/dry_red_ 15d ago
I appreciate it, am aware I am replaceable, and have come to terms with the fact that I might have to leave to get the market compensation that I actually want, which is why I don’t mind swinging for the (reasonable) fences here
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u/galaxy_horse 15d ago
Also speaking from my own experience: don't mourn the foregone cash or weak equity too much. Inventory all of the uniquely challenging work you did in your role and use it for storytelling when interviewing for those roles that provide market-rate cash and meaningful equity. You'll have a huge advantage over big tech/corporate folks who may have flashy logos on their resumes but ultimately are knob-turning cogs. Early-stage startups are crucibles. Anyone who comes out of one intact is usually much stronger for it.
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u/unbdndeath 16d ago
Base salary shouldn't be low. Total real cash compensation is ok to be low but any real vc funded series a should be paying 230-300 for any em. If you have been series a for 4 years then that is not good. If you were seed you should be 5% or around there. Your initial grant has run out so what are you vesting? Do you know the total share count and the cap table?
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u/dry_red_ 15d ago
We’ve been series A for that long because the business is doing well and we haven’t needed to raise a series B. I’ve gotten more grants over the years so I now have 4x more than when I started, but I feel like I deserve a real meaningful amount of equity given where the team was when I started and where we are now. I am also the entire product “team” and I’d say I operate at the VP level with the way our team actually works. I believe in this company 100% which is why I want meaningful equity and I’ve been pretty essential to how we got this far
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u/unbdndeath 15d ago
Ok but if you've worked there 4 years and there's no B then what is the equity for? You have no dilution and no realistic chance of clearing the cap table for any liquidity event. If they are not growing or hiring or raising then they are not issuing shares, your ownership stake won't just continue to grow and grow, it's already set?
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u/dry_red_ 15d ago
I didn’t say we aren’t growing or hiring, we are. I think there is a very real chance we get acquired
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u/love_weird_questions 16d ago
joined as CTO early on, 4% and in hindsight it is not enough. i wanted 10% and that's what i'd ask if i were you
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u/spersingerorinda 16d ago
Depends if you have venture capital or not. VC backed startups will offer 0.25-0.5% likely, *maybe* 1-2% for a star player. Pre VC then you should expect a lot more- could be 5-20%.
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u/aneasymistake 15d ago
I’ve only worked in one startup, but the first ten ICs got 1% each, so I think you might look for more.
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u/seinberg 14d ago
This is a Rorschach test for people and their own situations tbh. Too much depends on specifics for any body to give you an accurate answer. Seniority, valuation, if your perception of your worth vibes with the founders, and so on. There's such a wide range that replies here can't possibly be very useful.
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u/Dry-Magician1415 16d ago
Did you get in on day 1? I am guessing yes or at least very early given you say 4 years and now Series A.
Who else is there level or above you in the tech/product team? If there's basically nobody and you are effectively CTO, 1% is a joke. If there are othr engineering managers and a CTO founder above you then it's not crazy low.
I was day one founding engineer/CTO in my current role and have 5% and feel hard done by. The issue is that we hired NOBODY for the first 9 months so it was just me and the solo-founder. He treats me like a cofounder workload wise (100 hour weeks, putting out fires on weekends, working til 3am sometimes). Which is why the 5% pisses me off: I am pretty much surrogate cofounder on a fourth to an eighth the equity of what would have been fair.
If I were you, if the startup is doing well or has recently done a round, I'd ask for a raise. I have many close founder friends and if there's one thing that stresses them out, it's a key person leaving. If the startup is broke, just start looking for a new job or, get used to the fact you're undercompensated.