You've been pouring your heart and soul into your startup role, working long hours, and delivering exceptional results. But when you look at your equity stake, something doesn't feel right. Maybe you were too quick to accept the initial offer, or perhaps your responsibilities have grown significantly since you joined. Now you're faced with the daunting task of asking for more equity, and the thought alone makes your stomach churn.
You're not alone. Many startup employees find themselves in this position, feeling undervalued and uncertain about how to approach this delicate conversation. Whether you're an early employee who took a below-market salary for the promise of equity or a key contributor who's become indispensable to the company's success, knowing how to navigate this conversation is crucial.
Understanding Your Current Position
Before you even think about asking for more equity, you need to have a crystal-clear understanding of your current situation:
1. Know Your Numbers
First, review your existing equity agreement thoroughly. Understanding these key elements is crucial:
Your current equity percentage
Vesting schedule and terms
Type of equity (ISOs, NSOs, RSUs, or direct shares)
Any existing performance-based equity triggers
Current company valuation and funding stage
2. Assess Your Value Proposition
Take a step back and evaluate your contributions to the company. According to discussions on r/startups, successful equity negotiations often stem from demonstrating tangible value. Document specific examples of:
Revenue growth you've driven
Cost savings you've implemented
Key projects you've successfully delivered
Teams or initiatives you've led
Critical relationships you've built
Technical systems or processes you've developed
Remember, as one startup employee shared, "I made myself invaluable before asking for more equity. When you become critical to the company's operations, you have more leverage in negotiations."
Preparing Your Case
1. Research Market Standards
Before initiating any conversation about equity, arm yourself with data:
Research typical equity ranges for your role and company stage using resources like Carta's equity benchmarks
Connect with peers in similar positions at other startups
Consult compensation databases like AngelList Talent and Glassdoor
Review industry reports on startup compensation trends
2. Timing Is Everything
Choose the right moment to have this conversation. Optimal timing includes:
During performance reviews
After completing major milestones or projects
When the company reaches significant achievements (funding rounds, revenue goals)
Before taking on substantial new responsibilities
When you're fully vested in your current equity
As one founder noted on r/startups, "The best time to negotiate is when your leverage is highest and the company needs you most."
3. Build Your Narrative
Craft a compelling story that justifies your request. Your narrative should include:
Specific examples of your impact on the company
Growth in your responsibilities since joining
Market data supporting your request
Your vision for future contributions
How additional equity aligns with company goals
One successful negotiator shared, "I presented a clear case showing how my role had evolved from managing one product to overseeing the entire technical strategy. The numbers spoke for themselves."
The Negotiation Process
1. Initiating the Conversation
Start by scheduling a dedicated meeting with the appropriate decision-maker. Be transparent about the topic but keep initial communication brief and professional:
"I'd like to schedule time to discuss my equity compensation and future with the company."
2. Making Your Request
During the meeting:
Begin by expressing gratitude and commitment to the company
Present your case clearly and confidently
Use specific numbers and examples
Frame the discussion around mutual benefit
Be prepared to discuss alternative arrangements
Sample conversation starter: "I'm deeply committed to our company's success and believe I've demonstrated that through [specific achievements]. Given my increased responsibilities and impact, I'd like to discuss adjusting my equity to better reflect my contributions."
3. Handling Objections
Common pushback you might encounter:
"We don't have enough equity available"
"Your current package is market rate"
"We need to save equity for future hires"
"The company can't afford it right now"
For each objection, prepare a thoughtful response based on your research and documentation. As one employee shared on r/startups, "When they said they couldn't offer more equity, I proposed performance-based equity milestones that aligned with company goals. They agreed to this compromise."
4. Alternative Solutions
Be prepared to discuss alternative arrangements:
Performance-based equity grants
Extended vesting schedules with larger grants
Combination of equity and salary adjustments
Future equity triggers based on company milestones
Warrants or other equity derivatives
After the Negotiation
1. Get Everything in Writing
Once you've reached an agreement:
Request formal documentation of the new equity terms
Have legal counsel review the agreement if possible
Ensure all conditions and triggers are clearly specified
Understand any new vesting schedules or requirements
2. Maintain Professional Relationships
Regardless of the outcome:
Express appreciation for the consideration
Maintain positive working relationships
Continue delivering excellent work
Document all conversations and agreements
3. Plan Your Next Steps
If the negotiation wasn't successful:
Ask about future opportunities for equity increases
Request specific performance metrics for reconsideration
Consider whether the current equity aligns with your career goals
Evaluate other opportunities while maintaining professionalism
Key Takeaways
Do Your Homework: Research, document, and prepare thoroughly before initiating equity discussions.
Time It Right: Choose strategic moments that maximize your leverage and align with company milestones.
Focus on Value: Frame your request around your contributions and future impact rather than personal needs.
Stay Professional: Maintain positive relationships regardless of the outcome.
Be Flexible: Consider alternative solutions that could achieve your goals while meeting company constraints.
Remember, as one successful negotiator on r/startups advised, "Equity negotiations aren't just about the numbers—they're about demonstrating your value and aligning your incentives with the company's success."
By following these guidelines and approaching the conversation with preparation and professionalism, you'll be better positioned to negotiate for the equity you deserve while maintaining positive relationships within your startup.
Note: This article provides general guidance based on real experiences shared by startup employees and founders. Always consult with legal and financial professionals for advice specific to your situation.
