Please Try again!
Calculate How Much Your Equity Offer Is Worth in Terms of Salary
personal finance

Calculate How Much Your Equity Offer Is Worth in Terms of Salary

Kristin Wong, Gawker Media

Photo by Štefan Štefančik on Unsplash

Let's say you just landed a job offer at a startup. The salary isn't great (it's a startup, after all) but you also get something called equity . Here's what that means and how much it's worth.

Startups often offer new hires equity. What they're really offering is partial ownership of their company-typically a small portion. This means if the company grows and makes a lot of money, those shares could be quite lucrative. Of course, if that doesn't happen, your equity won't be worth much.

Advertisement

A site called SalaryorEquity.com can help you figure out how much your equity is likely to be worth in terms of dollars. Creators Natalia Rodriguez and Matt Wallaert designed the site after helping a friend go through this very process.

"So when Natalia and I were looking for something to work on together, this idea sort of popped out," Wallaert told us. "She did this beautiful, simple design and all the code so that it could be rendered client-side, without transmitting data to us."

Sample results

The larger context, he explains, is inequity in tech:

"Women are less likely to accept offers that contain equity than those that are straight cash, and that's bad for the tech ecosystem, because it means we have relatively fewer women with large exit payouts. Which, in turn, means that less of that money comes back as angel funding, where women are more likely to fund women than their male counterparts (because of the rampant sexism in the industry). It is all a giant cycle that needs to be disrupted. Hence this tool."

In order to use the tool, you'll need to know the company's valuation in addition to any funding they have received. Sometimes this information is included in your offer letter, but it often isn't, which means you'll have to ask the startup.

Advertisement

"If they refuse to answer, that's a warning sign-they're offering to pay you but refusing to tell you basic facts that would allow you to evaluate it? Not exactly an open culture," Wallaert said.

You enter this information into the tool, and it will crunch the numbers for you and give you an estimate of what your equity translates to in terms of salary. To try the tool out for yourself, head to the link below.

Salary or Equity

Contribute to LifeHacker

Write for Us

Subscribe for latest stories