What to say when recruiters ask you to name the first number
For startups or any companies who offer illiquid equity, the following is a good tactic I’ve been using that never fails.<p>Simply tell them (at the offer stage):<p>“Make me two offers, one with a higher cash compensation and the other with higher equity.”<p>Then, always take the position with higher cash to base your next negotiations. If it’s good enough, you might even take it outright.<p>This is a trick that exploits the fact that most startup founders and recruiters have an over-inflated “best case” view of how much their equity is actually worth, so it works in your favor when they use it as a benchmark against real money today. I’ve found they also fail to account how much it would be worth for you vs. them. Considering the risk is high you won’t make anything from those options even if you exercise them (&amp; stay long enough), the cash position is nearly always better. If the company becomes some run-away success there will be opportunity to get more equity but getting a cash raise in 6 months is infinitely harder I’ve found. Promotions at startups often times have an additional equity award and by that time you’ll have more information as to the chance of success or not.<p>Generally, based on my experience, it’s a good way to immediately get an extra $10-20k, with little emotional effort and without the other side feeling as if they were strong-armed, or that they had to give up something, since they offered you the choice. (This is important because you don’t want to start your position there viewed as an “expensive new toy”). They still feel powerful and in control. They may even be happy you took the cash option and let them “keep more” of their precious company. When I started doing this I originally feared they would think I don’t have faith in them, but I’ve never had someone feel insulted I took the cash option.<p>As an engineer I actually enjoy the negotiation process, it’s the best type of problem: pure tactics.