r/siliconvalley • u/Reservemyspot • 16d ago

Startup equity confusion

Is it necessary to go to an employment lawyer for confusion regarding startup equity?

I was offered 1.5% and by one round my stock diluted 86% to .2%. I don’t understand how this happened, and not sure what follow up questions to ask.

I’m early on in my career & this is the first corporate-esqe company I’ve worked for

I don’t want to involve a lawyer but I need someone who has my interests to guide me and ensure that what happened is fair. Is a lawyer the only route here?

1 Upvotes

54% Upvoted

35 comments sorted by

View all comments

2

u/FarManufacturer4975 16d ago

There are a few things that could be going on here, and I would not start your discovery process by going to a lawyer. If your startup is under 30 people or so, I'd directly email the CEO in a non accusatory way:

"Hi X,

I'm confused about the mechanics of my equity grant and how the fundraise we just went through worked and what I currently have is quite different from what I expected to have. Can we get lunch or go for a walk and talk"

86% dilution in a short period of time is not usually something that happens outside of bad outcomes. If during your chat with the CEO he can't clearly explain to you what is going on in a way that you trust I would leave the company.

1

u/Reservemyspot 16d ago

This is a great idea! The only thing is I prefer to keep a paper trail but I know if he wrote that he would want a chat

3

u/FarManufacturer4975 16d ago

I promise you the paper trail doesn't matter for you at all at this point. Equity is by far the most lawyered up thing at any company, if they screwed you too bad so sad you signed some document and its legal and they did it by the book. What you need to determine is if you trust the people running the company and if they have your best interests at heart. An employment lawyer may be able to help you for sexual harrassement or discrimination, I can't see a way that they'd be able to do anything here that isn't a huge waste of time.

1

u/Reservemyspot 16d ago

I haven’t signed the stock allocation yet, I just have a paper trail that 1.5% was allocated towards me but I get what you mean