Salary Negotiation With Startups
By Jeff Altman, The Big Game Hunter
A startup is not like any other company. You may not receive annual raises, but you should always try to negotiate your salary. You never know if the company might be acquired or go out of business, and your equity may be worthless. Startups can be tricky because they have limited budget for new hires. In such cases, you can make use of the culture and product potential of the startup as leverage.
Before negotiating salary, it is important to consider the future cash flow of the startup and its business model. Even the best contract will mean nothing if the company cannot pay salary, let alone be able to last until an exit. Understand the startup’s financial situation, because they may already have debt or, heaven forbid, are trapped in a vicious cycle. Make sure that your salary is worth more than what you expect to make. If the startup can’t afford to pay your salary, then don’t even bother negotiating.
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Another factor to consider when negotiating your salary is the equity in the startup. Startup compensation is generally structured differently than that of mature companies. Moreover, it is often highly dependent on the company’s stage and age. In a fast-growing startup, the company will be willing to offer its employees some equity. Equity allows employees to benefit directly from the company’s growth and makes the company’s growth more rewarding.
Avoid asking for an increase when the company already has high turnover. Instead, try to negotiate your compensation in person or by phone. Be prepared to negotiate with a team, and don’t accept an offer without discussing it with a coach or some other trusted adviser. It may be tempting to accept the first offer, but remember that it may not be a good idea. A new company doesn’t want to pay a high salary to hire someone who will leave after a few months. If you’re looking for a new job, it’s wise to give yourself time to consider your needs and priorities before you get so far down the road that you leave a potential employer in a difficult situation and you having wasted a lot of time on options (startups) that you could never commit to.
Ⓒ The Big Game Hunter, Inc., Asheville, NC 2022
ABOUT JEFF ALTMAN, THE BIG GAME HUNTER
Jeff Altman, The Big Game Hunter is a career and leadership coach who worked as a recruiter for more than 40 years. He is the host of “No BS Job Search Advice Radio,” the #1 podcast in iTunes for job search with more than 2300 episodes. He also hosts Job Search TV on YouTube, and Amazon, as well as on BingeNetworks.tv for Apple TV and 90+ smart sets.
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