How to Negotiate Your Startup Offer

So you received an offer for a role you’re excited about, but the compensation isn’t what you’d hoped?

I was in the same boat a few years back. The following script from my friend Nikil Viswanathan helped me increase my base salary by 77% while keeping equity the same.

Please note that this was specific to my circumstances and not general advice, so take it all with a pinch of salt.

The Seven Step Program

Step 1: “Hey I love you guys, here’s why I think you’re gonna be super successful [insert stuff], super smart people, awesome product, etc.. (be specific here)”

Step 2: “I understand you’re a startup and have constraints on your ability to pay and equity”

Step 3: “Can you help me understand a few things. A couple logistics: 1. What is # of outstanding shares 2. What is # of authorized shares 3. What is amount of money raised and on what valuation or note cap (ask what discount is on the note also) 4. What is option pool size? Can you help me understand how you think of comp? And how the rest of the team is paid”

Step 4: “Okay let me go run think through that. I just want to be totally transparent with you, here’s where I am. At a high level, I LOVE the company (re emphasize here how much you love them and why), and I’m super excited to come in and work super hard and pour everything I’ve got into making this an incredibly successful company — I’ll do whatever it takes.”

Step 5: “However at the same time, I’m making about $[your salary] a year. And I know you’re a startup and can’t pay that much. At the same time, I’m looking at more lucrative jobs salary-wise and I’m not sure how I can cut it in more than 1/2 bc I want to take the high equity option. I believe in the company and want to be fully aligned in helping grow the company”

Step 6: “I’m having other companies reach out [if this is true otherwise say I’m planning on talk to other companies] and I feel like I have to do my diligence and see what my options are. However, since I love you guys so much, and to be honest I would only do this with you guys, if its within your power to make me an offer that makes sense for me financially, I’d be strongly tempted to just take it and could prob sign in next 24 hours”

Step 7: “I know you have constraints and I’m not expecting like $[unreasonable number] but if we can agree on something that gives me the ability to just take it I would be really excited to join and pour my heart and soul into helping [company] build a billion dollar company!”

And then just leave it like that — and see what they say.

If its good, say “oh great thank you so much, let me think about it and get back to you”

If its okay / bad “okay I know you’re trying your best, lets keep talking”

And last line, if they say hey this is a good offer, you should take it, here’s the line you should say: “How am I supposed to do that?” < — — magic line Then be silent and let them speak. Ask it in a genuinely curious / “help me” tone. — not accusatory. Even if awkward silence, just let it sit until they talk.

And most important thing: 1. Be super excited / positive, energetic about the company 2. Talk about how excited you are to come in and work super hard and crush it for them 3. Blame it on an external source — parents, worry about money, etc…

Final note: don’t anchor too high. The magic of this script is that you explicitly don’t give a counteroffer. By simply letting it be known that I can’t take the offer, the company may come back with a higher offer than you could have known to ask for.

Thanks for letting me share, Nikil!



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