> There are a few warnings that go along with working for equity.
Another warning: Equity can be expensive. It can cost a lot of money to keep that equity when you leave the startup.
I was at a startup for 2 years and had 2% vested equity. I left the company 2 months ago. If I want to keep my equity, I have to exercise my stock options and pay ~$30k within the next month. If I don't, the equity disappears forever.
There's a third option: you can sell some or all of your equity to an investor. Companies don't like to talk about them, but I've seen more and more of these transactions happening, and they can be great for everyone involved: the employee gets a payday and eliminates her risk, and the investor gets access to a company she would not have otherwise been able to.
It's because almost all the time you are actually issued options, not shares. The options allow you to buy a certain number of shares at a lower price, but you need to pay that price to exercise them.
Another warning: Equity can be expensive. It can cost a lot of money to keep that equity when you leave the startup.
I was at a startup for 2 years and had 2% vested equity. I left the company 2 months ago. If I want to keep my equity, I have to exercise my stock options and pay ~$30k within the next month. If I don't, the equity disappears forever.