Should early-stage startups screen against candidates who prioritize cash compensation over equity upside?

TJ Parker · Jun 5, 2023

Employees who prioritize cash over equity should go work at a big company, because startups are a different game about pulling off something incredibly difficult and everyone doing extremely well if it works.

The startup bargain is collective upside on a hard outcome, which is not delivered through cash.

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Keith Rabois · Nov 27, 2023

At a Series A company the real unlock for generational wealth is equity rather than cash, and hiring people who are too cash-obsessed lowers the likelihood that everyone's equity ends up being worth a lot

Capital efficiency is judged alongside growth rate, so managing cash is part of collective success; cash-focused hires undermine that

Scope: Series A stage; current market conditions; cash comp still above the average job

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Keith Rabois · Nov 27, 2023

A candidate being far more focused on cash than equity is a yellow rather than red flag, but anyone joining a Series A startup should be weighing equity upside over cash

Some people have legitimate obligations like student debt or families, but a Series A startup can't and shouldn't compete on cash against mature companies whose equity only grows at market rates

23:34 Cash preference is a yellow not red flag but equity should still be weighted more heavily

Harry Stebbings · Jun 5, 2023 · hedged

In the current tougher macro environment, employees increasingly want cash rather than equity, including in Europe.

What he observes in the market today.

32:31 Macro downturn shifts employee preference from equity toward cash