how much of a scam are startup's equity options?
Discussion
Promissory fiat
Probably depends on the startup 😉
Not a scam but most likely worth nothing.
If part of your comp is a unilaterally dilutable share which is likely worth nothing, I mean, kinda scammy, right?
Any form pf compensation plan that is even remotely complicated is scammy.
Most of them are risky, but would not use the word scam.
Some might be though, but not all.
I'd disagree--I'd ALWAYS want options when I'm working in a startup.
Then you (and everyone else working there) has some skin in the game 😃 and if you (and by extension the company) become successful, then the payoff can be tremendous.
I'd go one step further--I'd probably NOT work for a startup if they DID NOT offer options...
Depends, but they can dilute the crap out of them right up to the x-date in order to make sure the founders, angels and VCs get their cut before any employee sees a dime.
Not scams. Some maybe. But broadly would say risk/reward balance at low probability of success, but more similar to lottery tickets than scams
Better odds than a lotto ticket, but in many situations they will be worthless.
Beyond founder options, these (options) should be viewed as a longer term incentive on top of decent compensation.
They’re very effective at aligning incentives to focus on the long-term value of a startup. Milestone-based compensation could be another option, though.
100% scam.
Just a lottery ticket and should never be given weight when considering your compensation.