what is a reasonable equity size for very senior engineer (12-13 yrs) at a 20-40 person startup, the startup is supposedly profitable and has not gone through funding rounds yet and has been around for a couple of years. the vesting plan is 5 yrs
company valuation unknown??
shares outstanding b/w 30-40 mil
no funding rounds yet.
reasonable salary offered
options are offered not grants
This doesn't sound like a startup to me. You're saying company has 20-40 employees, no outside investment, and is profitable.
That's a founder's home run.
Anyhow, usually, stock options are part of the risk premium of joining a biz that has a dangerous future.
But in this scenario, there's way less risk!
How many stock options would this engineer get if he joined Microsoft or Google or Facebook? He'd get a few (probably).
If I were a founder, I would look at employee stock ownership plans at places like that and then design a plan like theirs.
Frankly, I think the smarter move is to design some kind of profit sharing program, rather than stock options.
This company looks like a lifestyle biz; why would the founders ever sell it? I know I wouldn't.
And if the founders never sell, those options are worthless.