Family Is More Important Than Equity
While equity takes four years to vest, relationships with family members are invaluable.
I had the chance to spend this past weekend with my two best friends in the world. My brother and sister have been there for me from my battle with cancer, to all the ups and a lot of downs of working at various early-stage startups. We see each other all the time, but rarely is it just the three of us together. We laughed nonstop for three straight days. Standing on the beach getting ready to leave, we realized that we sucked at making it a priority to spend time together just as siblings, so we decided that we would do a siblings trip every year. No excuses.
Now back at my desk, I feel grateful that we all made the effort to spend time together. I love the energy in the SF startups space, but sometimes it can really mess with personal priorities. People become obsessed with product updates, making more money than the next person, and equity. It is easy to forget how important it is to stop, and focus spending time with the ones that matter most. A few companies encourage employees to take time off and unplug such as Full Contact’s Paid Vacation Policy. Most companies, however, aren’t this generous. The majority of companies pressure people into skipping vacations while also misleading them on monetary upsides such as potential equity.
Equity is a great perk of working at startups but it is also unfortunately the most misunderstood part of overall compensation. The quick overview is that equity takes four years to fully vest, usually with a one-year cliff, and the rest accrues over the following three years. Before joining any startup that is offering equity, I highly suggest reading Venture Deals by Brad Feld and Jason Mendelson. It covers equity, cap tables, tax implications, and will help put a potential monetary value on equity gained versus time it takes to actually earn it.
After six years at early-stage startups, I encourage everyone to focus on spending time with loved ones. Make it a priority. There will always be opportunities for more work. Time with family refuels the passion and courage needed to make it through working at high risk companies. Startups are really hard and frustrating at times, equity quickly disappears, family will still be there. Of course equity can provide long-term financial gains, but a weekend of laughing and eating burritos with family is pretty powerful too.