Here are 5 tips on how to negotiate for more equity in your startup | Wilnesh News

The first step is to determine what you want the company to offer.

“I think one of the mistakes that some employees make because they see some of the great successes in Silicon Valley … is that they put too much emphasis on equity,” he said. “They think…I have this equity and it’s going to make me a millionaire, but statistically that’s completely untrue. 98 percent of startups fail.”

Employees should start by assessing their current budget and lifestyle. “You have to be happy with your cash compensation number to cover your operating expenses and living expenses,” he said.

Once you’ve mastered the basics, Vashe says, you can turn your attention to seeking equity.

“Most retail investors don’t have access to…(this) asset class and you should always be looking to maximize that aspect of it as part of your portfolio because you can get cash elsewhere, but you You’re not going to be able to get this lottery in most places, for lack of a better term,” Vashi said.

If you want to own equity, it’s critical to make sure your company offers equity compensation and that you’re bullish on the business.

As far as Vashi is concerned, Anaplan is a company “that is experiencing so much growth and success,” he said. “Every time I start to feel a little complacent or comfortable, there’s always a new and exciting challenge waiting for me to take on.”

“When you negotiate equity versus cash compensation, you are implicitly saying…I am betting on the success of the company and I want my financial performance to be directly tied to the financial performance of the company,” Vashe said.

So if fairness is important to you, employees should do their research to make sure they trust the company they work for.

“I think the more you know about the trajectory (of a company), the more you can calculate the risk and you can take the risk based on what you think the equity (in the company) is worth,” Vashi said.

Once that happens, the key to getting an equity stake in the company is to bring value, Vahi said. “The best way to get equity compensation is to make yourself extremely important to the company,” he said.

“There’s a direct correlation between how important you are to the outcome of the company and how much equity you own. That’s why founders often own a majority stake. That’s why investors get a large stake because they’ve actually invested cash. Get into business,” he said.

As far as employees are concerned, “everything is based on[their]contribution, whether it’s actual or expected contribution,” Vahi said.

One way to show your value to a company is to be proactive and make connections throughout the company, Vashe said.

“Don’t limit your own growth based on how much your manager may or may not do for you,” Vashe says. “Make sure you advocate for yourself and make your contributions visible, not only to your manager, but also to your supervisors,” or your manager’s managers, he advises.

While culture may differ between companies, industries and regions, Vashi advises that it’s important to stay proactive at work. It is usually up to employees to advocate for themselves in a work environment.

The key to successful negotiation is to be prepared so that when you get the chance to defend yourself, you have a strong case ready.

“Make sure that whatever you do, you can clearly communicate how it is directly related to the success of the business,” Vashe says. He recommends documenting your contributions as a way to prepare.

“Start building a portfolio for yourself. This will serve you well in every raise conversation,” he says. “Then you can eventually turn that into a PowerPoint briefing…and it’ll be more summarized as you pitch it to your team and the entire function.”