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“I was expecting an offer of three percent,” Joe said to me. I’d been recruiting Joe since before we got our funding, and, now, two years after we closed our funding, we had offered Joe 0.75% stock options to become a Senior Scientist.
Joe had a PhD from Stanford, and the engineering team thought he’d be a great addition to the team. I did too, but three percent was just way too high.
“Joe, we just don’t have the equity (I use equity and stock options interchangeably in this article) to give you that (three percent),” I said. “That’s more than we would give a VP that we’d hire now. The offer we gave you was in line with other senior engineers we’ve hired.”
You have to stay disciplined with your stock option distribution or you’ll run out of them.
“The last time I joined a startup that’s (three percent) what I got,” Joe said.
“I’m sorry, but we just don’t have that much equity available,” I said.
“Okay,” Joe replied.
I could hear the disappointment in his voice. I knew he really wanted to join us, and, somehow, his expectations were out of line with the reality that I had to deal with.
