The Art and Science of a Compelling Equity Story
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Speaker: Kan Ta You’ve poured countless hours into finding the perfect candidate. From sourcing, screening and giving your candidate the best white-glove experience. Now you’re at the offer stage, but your candidate suddenly has four other offers! You have approval for 3,000 shares and a base salary $30,000 below the other offers. You do your best to sell the potential, but you leave the conversation believing if your candidate declines, it’s only because you didn’t have $30,000 more to offer. The truth is, there’s more you could have done. This presentation will cover: The value in framing a compelling equity story How to frame a compelling and honest equity story An easy-to-follow framework for discussing equity with candidates
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The Art and Science of a Compelling Equity Story
- 1. The Art & Science of a Compelling Equity Story By Kan Ta, Executive Partner
- 2. Kan Ta Executive Partner, Binc (And UCI Alumnus) Presenter
- 3. Techbook
- 4. $920k total comp (4 years) ● $150k base ● $30k bonus ● $50k per year in RSUs Techbook: $640k total comp (4 years) ● $130k base ● No bonus ● $30k per year (preferred value) Ours: Over $280k (4 years) ● Less base ● No bonus ● $50k - $20k per year less Delta: Why walk away from all this guaranteed money? Question: What We Were Up Against
- 5. Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Ineffective Too Late Deferring Loss of Ownership
- 6. Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Effective
- 7. Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Apply Educate Close What We’ll Cover
- 8. Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Apply Educate Close Part 1
- 9. Equity 101 Growth 1. Public vs. Private 2. RSU’s vs. Options 3. Preferred value vs. 409A value 4. Strike Price 5. Equity: not fixed carta.com/blog
- 10. Common shares issued to employees are tied to what company valuation? A) Preferred valuation B) TechCrunch valuation C) 409A valuation D) All the above
- 11. Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Apply Educate Close Part 2
- 12. $920k total comp (4 years) ● $150k base ● $30k bonus ● $50k per year in RSUs Techbook: $640k total comp (4 years) ● $130k base ● No bonus ● $30k per year (preferred value) Ours: Over $280k (4 years) ● Less base ● No bonus ● $50k - $20k per year less Delta: Why walk away from all this guaranteed money? Question: What We Were Up Against
- 13. X valuation (last round) The Growth Map Income Approach: Revenue & Profit Market Approach: Comparable companies Market size Asset Approach: Technology Team # Users / Customers Engagement “stickiness” Y valuation (today) 10x 5-10x $500B worldwide Never been done before Industry experts 10x 30% increase Z valuation (future) More effective 5% increase yoy First to market at scale 100M
- 14. Putting It Together: $$ Script 1. In the next 4 years, we can have 100M users because …1. In the next 4 years, we can have 100M users because … 2. From each user, we expect to monetize $10 dollars because … 1. In the next 4 years, we can have 100M users because … 2. From each user, we expect to monetize $10 dollars because … 3. Thus, our revenue in 4 years can be $1B. 1. In the next 4 years, we can have 100M users because … 2. From each user, we expect to monetize $10 dollars because … 3. Thus, our revenue in 4 years can be $1B. 4. In our industry, companies are valued at a multiple of 5 because … 1. In the next 4 years, we can have 100M users because … 2. From each user, we expect to monetize $10 dollars because … 3. Thus, our revenue in 4 years can be $1B. 4. In our industry, companies are valued at a multiple of 5 because … 5. Thus, in the next 4 years, we can be valued at $5B.
- 15. The Growth Map should be a: A) Low Priority B) Medium Priority C) High Priority D) Depends
- 16. Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Apply Educate Close Part 3
- 18. 18 Equity Story HireOfferPhone Screen OnsiteRecruiter Screen Apply Educate Close Takeaways Equity 101 Growth Map Compensation Calculator $$ Script
- 19. “I’m ready to sign with you” Techbook
- 20. Questions
- 21. 21 Survey Poll ✓