I have made this mistake exactly twice in my career and the simplest advice I have... I won't categorically say that you should never accept "a lower salary right now but when we bring in investment/sales we'll bump it" because, well, sometimes there are companies/projects/founders that you meet and truly believe in and want to be a part of their team. But... the absolutely critical piece of it is to get in writing:

- what the triggering events are (investment, revenue thresholds, etc), and make sure to include "hiring other team members for similar roles at higher salaries" as one of the triggers

- what the salary bump will be

- whether or not there will be retroactive compensation included

The first time around I ended up leaving the role before any of the usual triggers would have been activated. Management was toxic, salaries sucked, morale was in the shitter anyway. The second time around I discovered after tendering my resignation that someone who reported to me was making $40k/yr more than I was. It would have been an amicable parting (I was moving on to something that was much better aligned with my interests) but it got pretty sour when I found that out. I got asked a couple times to come back to consult on a few projects and the rate I quoted them (and they begrudgingly accepted) was steep.

Depends on what you mean by founder. Pre-funding employees can get sweet nominal-cost restricted stock awards.

>> Depends on what you mean by founder. Pre-funding employees can get sweet nominal-cost restricted stock awards.

So basically, lottery tickets that you get to cash out in 7yrs if you are lucky.

You are better off working at market rates, and buying Nasdaq options with your pay difference.

I suppose you started your company expecting to make a loss relative to buying options, and you tell prospective hires the same thing?

You're skipping the part about early hires having outsized impact over the fate of the company and the value of their equity.

Fair point. The risks are huge. Makes sense if you've got 30% of the cap table. The risk is worth it. Esp if you are founder and on the board directing the company and fending off risks.

Not sure it makes sense if you've got 0.5% equity.

Definitely does not make sense if you are being given X,000 shares and have no access to the cap table.

Any engineer who thinks they can value a fraction with a numerator and no denominator is fooling themselves.

Startup employees -- if you were given 50,000 shares but told you arent allowed to see the cap table, please UPVOTE/DOWNVOTE accordingly if you think the pay-cut to market was worth the money you got at the IPO.