Sklover & Company, LLC

Employment Attorneys

Serving Executives, Professionals and Senior Managers​

ExecutiveLaw Negotiating Equity with Start-Up

6. Negotiating Equity with a Start-Up

“The things you regret most in life are the risks you didn’t take.”

With investors feeling “cash rich” and aggressively seeking higher-return opportunities, start-ups abound, and their number grow daily. Executives with experience and expertise in rapid growth enterprises are in strong demand.

A. Equity Ownership is now the “Golden Carrot”.
The “coin of the realm” in start-up employment is equity ownership. It is the first reason executives give for leaving established companies for industry disrupters. Shares, RSU’s, options and their “cousins” are the primary rewards sought and offered. Salary, bonus and benefits are important, but commonly take a back seat to discussion of equity grants. While salary, bonus and benefits are rather easy to understand and negotiate . . . equity discussions are a whole different story.

B. Equity Negotiation is like Three-Level Chess.
That’s because it requires taking into account, all at the same time (i) existing Equity Plans (the “Rules”), that impose a set of equity structures and their rules, that is almost never open to discussion, let alone modification; (ii) existing Equity Award Agreements (the “Terms and Conditions”) obtaining and holding equity awards, and (iii) the multitude of potential future events, chief among them new investors, merger, acquisition, and initial public offering (“IPO”).

Requesting uniquely advantageous treatment for one executive among many of his/her colleagues is often declined, but, as always “where there’s the will, there’s the way.”

C. The Art of Equity Negotiation is in (i) avoiding the usual “we-can’t-do-that’s”, and (ii) proposing instead measures that express with conviction “surely-this-alternative-can-be-done.”
Depending on the then-present facts, events and circumstances, such alternatives might include (i) application of “minimum end-value theory,” (ii) transaction bonus payment, (iii) “no less favorable future treatment,” (iv) “equity conversion,” (v) “future freedom,” (vi) “relative value” and (vii) “maximum dilution and devaluation,” or (vi) a combination of two or more, among others, limited only by your imagination and determination.

D. We have found particular success in requesting “relative value of awards.”
Which is a way of saying, “Whatever you get, I get no less than a percentage of that,” coupled with “no less favorable treatment in all respects,” which is a way of saying “my equity can’t be treated differently than yours.”

E. The best argument for the “relative value” approach is “It will put us all in the ‘same or similar boat,’ and thus we will all swim in the same direction.”
Of course, if you bring with you – or may take with you – a special skill, relation or other unique human capital, you can ask for nearly anything, so long as you are determined to hold your ground, and apply our “Three R’s of a Request,” namely. (a) presented with Respect, (b) Reasonable in size, and (c) most importantly, submitted on the “wings” of a positive Rationale, preferably in the interests of all.

It’s a simple concept, gives you an edge that few others will have, moves quickly, and is quite effective. Otherwise, you are “shooting in the dark.” Consider its use. It is a trusted method we’ve created over time, and it sure works quite well for our clients.

F. A Sensitive but Necessary Thought.
“A person who wears one watch always knows what time it is, while a person who wears two watches is never sure.” The message is this: Negotiation of Equity, and especially with a Start-Up, is a sensitive, delicate, “touchy” subject, because of its very special place in the desire for wealth. For this reason, many attorneys who represent both employees and employers will hesitate before burning their own “bridges,” or “biting the hand that might feed them some day.” Whether or not consciously, this is one place where a strong conflict of interest can sway an attorney’s mind, and all he or she has to do is not be assertive, aggressive and effective, all of which are difficult to identify. In this particular context, we suggest counsel without such bias, conscious or subconscious, or otherwise.

Always go with the firm hand of experience and expertise, especially in employment transitions and other “shaky times.” We are here to help you.

We offer confidential telephone consultations as a first, preliminary step in providing counsel to those with workplace or career problems or opportunities. They are available days, evenings and weekends, depending upon urgency. For those with questions related to matters on which we were retained and worked with them during the preceding 12 months, brief discussions, without review of new documents, are provided without charge. For others, our Schedule of Consultation Fees can be found on our About page. Consultation arrangements can be made with Ms. Vanessa Mustapha or Ms. Phyllis Granger at 212.757.5000, or by email to or

(If you have any thoughts, comments or suggestions about these Insights, please consider sharing them with us, by forwarding them to us at Thank you, in advance.)

© Copyright 2020 Alan L. Sklover. All Rights Reserved and Strictly Enforced.

ExecutiveLaw Career Brand

1. Your Unique Career Brand

“Either you are distinct, or you will become extinct.”
– Tom Peters

We are enthusiasts when it comes to the practice and pursuit of branding and, of course, when it comes to employment, the notion of “career branding.”

Each of us has a unique personal brand, namely what others think of when they think of us. It is their sum total view of what we offer the world, our value to others, and to our clients, customers, employers and colleagues. Your brand precedes you, empowers you, and follows you, wherever you go.

Your “career brand” is what your present employer and all potential employers think of your potential value to them, and thus what they need to offer you in return for your working for them. Your knowledge, skills, relations and reputation have taken a great deal of time and effort to learn, acquire, and develop, and is a reflection of your personality, character and the standards you have set for yourself.

You create your brand each and every day, whether you know it or not. If you don’t proactively create and enhance your career brand, you leave that critical task to luck and chance, or worse, permit others to define it for you.

The employment marketplace is an increasingly competitive place. New York Times columnist Tom Friedman has written “Good enough is no longer good enough.” We could not agree more. If you don’t have a distinctive, attractive, outstanding career brand, in the employment marketplace you are likely perceived as little more than an easily replaceable commodity.

Most of our clients have devoted and continue to devote significant effort and imagination to creation and enhancement of their own, distinctive career brand, and enjoy the multiple and varied “fruits” of their efforts. Their experiences are as inspiring to us as they are rewarding for them, in the broadest sense and spirit of those two words.

ExecutiveLaw™ Insights

  1. Your Unique Career Brand
  2. Managing Employment Risks
  3. The Recruitment Phase
  4. The Negotiation Phase
  5. Equity “Trap Doors”
  6. Climbing the Ladder
  7. If Difficulties, Disputes or Allegations Arise
  8. Navigating Employment Departures
  9. Continuing Restrictions
  10. Extending Career Longevity