This document provides information about compensation and startup finance. It discusses reasons to join a startup such as leveraging skills, potential for quick advancement, and culture. It notes that startup definitions have expanded and now include large, established companies. Regarding compensation, it states salaries vary significantly by role and company size, with software roles starting from $40-100k. Stock options are described as additional compensation that could provide an opportunity for a large payout depending on the company's capital structure and success. The capital structure, which includes investors, determines the value of stock options and what percentage of the company they represent.

1. EDUCATION UNCUBED
NOV. 2 , 2015
COMPENSATION &
STARTUP FINANCE
1

2. WHAT WE’LL COVER
2
Raising $1.5 million to hire and accelerate growth
My Background
Reasons to Join a Startup
(But….What’s a Startup?)
The Truth About Startup Compensation
What About Stock Options?
Super Quick Stock Options Primer
About That Capital Structure
Resources
Q&A

3. MY BACKGROUND
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CEO, Co-Founder of Uncubed
University of Iowa – BBA, Finance / BA, English
Spent 8 years in finance before joining/building
startups
80,000
1,000
250
25
0—>250
0—>18
No. of Employees

4. REASONS TO JOIN A STARTUP
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•Leverage a scarce skillset
•Potential to move up quickly (i.e. head of dept/or company at 27)
•Don’t want to spend next 30 years working way up in large company
•Value the culture (“going to that office doesn’t feel like work”)
•Make a lot of money
•Ok making little money (trading for something else)

5. BUT WHAT’S A STARTUP?
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Used to mean this
• 2 people in a garage
• No salary?
• Lots of risk
• 50 - 500 employees
• Salary benefits
• Less risk
• High growth
• 5 years old
• 1000s of employees
• $50B+ valuation
Now also means this
Enormous opportunity set

6. THE TRUTH ABOUT STARTUP COMPENSATION
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There is no truth. Just a lot of misleading headlines….
Now significant overlap with corporate compensation
• Varies by skillset
• Varies dramatically
by size of company
• Starting salaries for
software
development roles
can be $40-100k+
• Starting salaries for
other roles can be
$30-60k+

7. WHAT ABOUT STOCK OPTIONS?
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Google famously minted “a thousand millionaires” at
IPO - due to stock options
or
Stock options:
• Give a sense of ownership
• Additional compensation
Potential outcomes:
Opportunity
for this
Best to plan for this

8. SUPER QUICK OPTIONS PRIMER
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Options hugely affected by the capital structure of the company
Pretty complex, but good to learn the high points
Options are not stock…
• They are the right to buy stock
Options are on vesting schedules
• You earn them over time – usually 4 or 5 years
• Usually include a “cliff”
You have to do something about them when you leave
• Have to “exercise” or not —> can be a cash issue

9. ABOUT THAT CAPITAL STRUCTURE
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The key is understanding “what’s my fully-diluted ownership %?”
One of the biggest keys to understanding what
options might be worth
Startups raise money from all sorts of places
• Friends/family, angel investors, accelerators, venture capital
groups
•These folks generally get paid before options holders
This makes headlines tricky…..
Was this good or bad?

10. A FINAL WORD ON STOCK OPTIONS
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It’s not all bad news, we just need
information and a little education!!!
Remember
Google’s
Thousand
Millionaires!
And you get to
walk around like
you own the place

11. RESOURCES
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Angel List (www.angel.co)
Quora (www.quora.com)
Google / Blogs

12. QUESTIONS?
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Q&A now, or email later
chris@uncubed.com