Should I Take Equity In A Startup Over A High Paying Job?

“We often miss opportunity because it’s dressed in overalls and looks like work” ― Thomas A. Edison
Finding that rare high paying job that requires less hours and more pay can be elusive at times, especially if you are just starting out. We all have dreams of working from home and spending more time with our family, while making a high five to six figure salary. Yet, would you rather: Have that high paying job? Or actually have equity in the company you work for? In today’s blog I’m going to explain why having equity in the company you work for is a better short term, and long term move. Here are some reasons you should take the leap of faith in having equity in a business, over a high paying job every time.
How To Find It – First I’d like to explain how to find a company who will offer you equity. These companies are usually in the form of startups or smaller businesses. Pretty much startups might offer you an entry level position, but offer a huge opportunity for growth. This growth could be in the form of becoming a partner in their business, or them actually splitting up profits quarterly to distribute to you. Now I’m sure this all sounds great, but there are two main trade offs when working for a startup and having equity in the company: 1) More will be expected of you. 2) Your starting pay will probably be lower than industry standard. The real test here is your faith in the company. Do you see them expanding? What does the leadership look like in the business? What kind of potential do they show? When joining a startup it’s incredibly important to vet the company carefully and thoroughly; do your homework.
The Short Term Game – In the short term, joining a company that offers you equity won’t seem much like a deal at all. Your hourly pay will probably be less than industry standard and you will need to physically work more. Keep in mind you’re a partner in a business and now have the responsibility to build and grow the business. So where and when does the pay off in the short term come from? The biggest short term gain you will see from a company you have equity in is the quarterly profits and growth. If you work crazy hard and the company continues on an upward trajectory your income will far exceed the industry standard. Also on that same note, as you get better at your job you will continue to be promoted and move into different positions climbing higher and higher within the company. By starting out at a startup you have a really good opportunity to educate yourself on how everything works, and when you can fit the puzzle together you become an incredibly strong asset in the company; which mean substantially more money.
The Long Term Game – In the long term is where joining a company that offer equity shines. Down the line you might have not only have equity in the company itself; but the real estate assets and commercial properties they hold. All the while getting a bigger cut of the profits. Of course having equity isn’t enough alone. When your company offers you equity your long term goal is to wait until the owners of the company sell it. When the company sells you (having equity in all profits and real estate holdings) will walk away in a very good financial position.
Conclusion – Is it worth the risk to join a startup that might fail? The rewards could be a generous amount of money allowing you to potentially never work again in your life. On the other hand if the company doesn’t survive, you might have nothing but wasted time to show for your efforts. It all depends on where you are in your career. Yet before you sign on the dotted line with the already established big business, remember to take a look at the smaller startup; in the long run they might have more to offer you! What do you think? Would you be willing to take the risk of making less in the short term to have equity in a company in the long term? What kind of things would you look for in a startup when interviewing? Share your thoughts and comments below!

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