🚀 Should I take the big tech job or join a startup?
Evaluate the financial differences between a big tech and a startup job offer. Understand cash, equity, and risk to make an informed decision.
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Having worked in big tech (PayPal) and at a YC-funded startup (SimpleLegal) and something in-between (Stripe), I can safely say the choice is so much more than just comp.
Think of it this way: a big tech offer will almost always look best on paper financially. The most important growth often comes from intangible experiences, like seeing a business take off or learning to navigate a complex organization.
Ask yourself: what's my ultimate goal? Once you have that "north star," you can decide which job is the better vehicle to get you there. The people you'll work with and the network you'll build are a huge part of that journey, too. Without a clear goal, you're just choosing between numbers, not opportunities.
That said, let's make sure you're ready to rollercoast / coast.
First, let's establish your baseline. This is your current or alternative big tech offer. Its value is more predictable, consisting of salary, bonuses, and liquid stock (RSUs). This total compensation is the benchmark against which you should measure the startup offer's potential, but riskier, upside.
Now, let's break down the startup offer. It typically involves a lower cash component (salary, bonus) but includes an equity grant (stock options) that holds significant potential value. The key is to understand the details of this equity to estimate its future worth. For more detail on evaluating startup offers, see this guide.
Ownership At Grant
Ownership At Exit
Exercise Cost
The value of your equity depends entirely on the company's future success. Since this is unknown, we model it with scenarios. Estimate the company's valuation at exit (e.g., an IPO or acquisition) for bear (pessimistic), median (realistic), and bull (optimistic) cases, along with the probability of each. The probabilities must sum to 100%.
Expected Equity Payout
Expected Equity Value Net
Big Tech pays out more reliably than startups. Startup payouts are weighted toward the end, potentially long after your four years are up. This section does some discount cashflow analysis, using the net present value (NPV) to compare the two flows more evenly.
In most cases this shouldn't change your mind, but it's fun to be rigorous.
Startup Premium (NPV Delta)
Having gone through all that, look at the worst case / bear case and make sure that's something you can live with. Now, look at the premium and ask yourself if the experiences you'll be getting from a startup are worth it. If you're like me, you may be about to take a fun leap!
For further related reading, check out:
📊 Results
Total Comp (TC). All figures pre-tax.
Startup 4Y TC (Weighted)
Startup 4Y TC (Bear)
Big Tech 4Y TC
Startup Premium / Deficit
Remember: A deficit is just the price you pay for the unique experience. You decide!
Last updated by mahmoud (v25.9.1)
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Disclaimer: This content and any calculations provided are for informational purposes only. The views, calculations, and methodologies expressed are those of the author and do not necessarily reflect those of this platform. Not financial advice. Users are solely responsible for any decisions made based on this information.
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