Adit

Employees joining some recently minted unicorn* companies are facing a triple whammy.. 1) tranched valuations are very common now means their entry strike price at that valuation is often >2x of the lead preferred price. 2) this means your strike price will be quite high and so will be your 409a. you’ll paying a pretty penny if you try to early exercise and if not then you’ll have to wait a while till they grow into that valuation. 3) stock packages seem great “on paper” but are massively inflated because of this tranched valuation. so you can say total comp is very high but the real comp is not that high (at least today). this is another reason companies chase a higher valuation so they can give lower equity raises. Make sure you go with wide eyes and use Claude/ChatGPT to do some exit math on your equity. Joining a unicorn company can offer far more than just comp (learning, experience, strong mission, great team) and that should be the core reason for joining. But do your own due diligence on the company you’re joining just like an investor would. * Not all unicorn companies are the same - some are fundamentally better and have meaningfully grown into the valuation than others. Some are growing way faster than the ones with fundamentals. Point is to do your homework vs treating every company that’s valued similarly and putting them in the same bucket.