What should I ask for my comp at a start-up firm?
Would like to learn your advice on how to position my bonus payment, thank you all!
Background:
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Associate with 4 YoE in Europe
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Remotely wokring for a small start-up advisory firm
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This year, the firm generated ~£ 6m of revenue and I have closed 2 deals for them (accounted for 80% of revenue) with a 2-3 people deal team (1/2 partners + me)
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The promised package (base comp + bonus) is significantly below market as I took a pay cut for the remote opportunity
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I have been working 24&7 and handled all the dirty work (From Admin & NDA to preparing pitch and model), and the partners are there to manage the client relationship and make strategic decisions
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I also have no equity stake / option
Based on the insights from Wall Street Oasis, here’s how you should approach negotiating your compensation at a start-up firm, especially given your significant contributions:
Highlight Your Contributions: Clearly articulate the value you've brought to the company, emphasizing the revenue generated from the deals you closed. This demonstrates your direct impact on the firm's success.
Research Market Rates: Understand the typical compensation for someone with your experience and role in the region. This will provide a benchmark to negotiate your salary and bonus.
Negotiate Equity: If your base compensation and bonus are below market rates, consider negotiating for a higher equity stake. Start-ups often compensate for lower salaries with equity, which could be lucrative if the company grows significantly.
Define Bonus Criteria: Since bonuses at start-ups can be rare, propose clear, achievable criteria for bonus eligibility. This could be tied to revenue targets, deal closures, or other measurable outcomes.
Leverage Your Position: Given that you are handling critical tasks and are a key player in a small team, use this as leverage in your negotiations. Your role is evidently crucial to the operations and success of the firm.
Discuss Long-term Incentives: If immediate cash bonuses are challenging due to the firm's financial status, discuss potential long-term incentives that could compensate for the lower pay now, such as deferred bonuses or future pay raises contingent on performance and company growth.
Prepare for Pushback: Be ready for some resistance and have a strategy for handling objections. This might include offering flexible options, like a lower initial raise with scheduled reviews for increases based on performance.
Professional Tone: Keep the negotiation professional and fact-based. Express your commitment to the company’s success while also advocating for fair compensation.
By focusing on these strategies, you can position yourself effectively for a compensation discussion that acknowledges your hard work and aligns with your financial goals and the firm's capabilities.
Sources: Why You Should Reject that Start-Up Job, Why You Should Reject that Start-Up Job, Q&A: From Sellside Research to Strategy & Finance at Rapid Growth Start-up, https://www.wallstreetoasis.com/forum/real-estate/small-shop-compensation?customgpt=1
bumppp
How many employees are at the firm? Are you the only associate? I wouldve asked for some equity upfront… but curious to hear what others think
Small team with 2 non-partner FTEs (including me), I'm the only associate (and most junior)
Equity had been discussed before I joined the firm and it's a no-go
bump
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