Startup Equity Is Not the Same as Cash in an Offer Letter

Startup Equity Is Not the Same as Cash in an Offer Letter

Author

Peter Walker

|

Read time: 

1 minute

Published date: 

November 27, 2025

Early-stage equity expressed as dollar figures in offer letters is misleading—negotiate for good equity, but don't trade real salary for notional startup...

LinkedIn: Startup Equity Is Not the Same as Cash in an Offer Letter

Startup equity is not cash.

Some of you are likely discussing taking a new role at a startup over Thanksgiving dinner this year, which is awesome.

One big tip: when you’re looking at the compensation in your offer letter, don’t translate the equity into dollars if the company is early stage.

You should negotiate for a good equity offer but taking a $10K cut in salary for “$10K more in equity” is an inaccurate bargain.

Gotta account for the time value of cash (that equity is not liquid today) and the potential of the equity to be worth zero (which is…high).

Negotiate hard. Feel satisfied you’re getting paid what you’re worth. But join this startup for the agency and learning and growth, first and foremost.

Good luck out there 🙏

Peter Walker
Author: Peter Walker
Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.

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