How do I pick a realistic exit multiple for startup equity?

Most startup equity is worth 0 — the majority of startups fail or exit below preference stack. For companies that do exit successfully, realistic multiples range from 1–3× for modest acquisitions, 5–15× for solid outcomes, and 20×+ for unicorn outcomes. Weight by probability: the expected value of most startup equity grants is 0.2–0.5× the headline number after failure probability.

What's the minimum salary lift required to justify staying at a high-salary offer?

There's no universal threshold, but a useful rule: if the equity-heavy offer's total compensation (salary + expected equity value) doesn't exceed the high-salary offer by at least 30%, the premium typically isn't worth the risk. You need upside to compensate for taking on concentrated risk.

How are RSUs taxed vs. stock options?

RSUs are taxed as ordinary income when they vest — you owe income tax on the market value at vesting regardless of whether you sell. ISOs may qualify for long-term capital gains if held 1 year after exercise and 2 years after grant, but AMT applies. NSOs are taxed as ordinary income at exercise. The calculator uses a blended rate as a simplification.

What does the break-even multiple mean?

The break-even multiple is the exit multiple the equity-heavy offer's equity needs to achieve for its total compensation to match the higher-salary offer. If it's 2.1×, the startup's stock needs to be worth 2.1× the grant price at exit for the two offers to be equivalent. Below that multiple, the high-salary offer wins.

Should I count unvested equity from my current job as part of this comparison?

Yes — if you're comparing against a current role rather than two new offers, the unvested equity you'd forfeit by leaving is a real cost. Enter it in the equity grant field for Offer A (stay) at a realistic exit multiple to capture this switching cost properly.

🚀Growth & Career

Is the Equity Package Worth the Salary Cut?

Is the equity package actually worth the salary cut?

What This Does

When a company offers you equity in place of salary, they're asking you to accept risk in exchange for potential upside. The question is never "is equity good?" — it's "is this equity good enough to justify this specific salary gap, over my likely time horizon, at a realistic exit multiple?" The Salary vs Equity Calculator runs a full side-by-side comparison of two offers: one with higher salary and modest equity, one with lower salary and a larger equity grant. It models both on an after-tax, multi-year basis — accounting for your vesting schedule, the exit multiple you think is realistic, and the actual salary gap you'd be accepting. The output is a clear winner determination with a dollar-figure advantage, a timeline showing when (if ever) the equity offer overtakes the salary offer, and a scenario table showing how the winner changes across exit multiples from 0.5× to 10×. This is the calculator for anyone comparing a startup equity package against a higher-paying offer at a larger company — with their actual numbers, not generic assumptions.

When Should You Use This?

→Comparing a startup offer with significant equity against a higher base salary at a larger company
→Evaluating whether to join a pre-IPO company at a salary discount in exchange for RSUs
→Deciding between two offers where one front-loads cash and the other front-loads equity
→Modeling how different exit multiples change which offer is better
→Calculating the exact multiple your startup equity needs to reach for the package to break even

Example Scenario

Sarah receives two offers: Company A pays $180k with $50k in RSUs vesting over 4 years at an expected 1.5× return. Company B pays $150k with $300k in options at an expected 3× return over 4 years. At a 35% tax rate, Company A's 4-year total is $512k. Company B's total is $526k — a $14k edge for the equity package. But at 1× exit, Company A leads by $112k. The break-even multiple for Company B is 2.1×.

Offer A — High Salary

Base Salary ($)

Annual Bonus ($)

Equity Grant ($)

Exit Multiple (×)

Vesting Period (yrs)

Offer B — Equity Heavy

Base Salary ($)

Annual Bonus ($)

Equity Grant ($)

Exit Multiple (×)

Vesting Period (yrs)

Tax Rate (%)

Analysis Period (years)

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Common Mistakes to Avoid

✕Using the headline equity grant number without applying probability of loss — most startup equity is worth far less than stated.
✕Ignoring the vesting cliff — leaving before year 1 means zero equity regardless of grant size.
✕Comparing gross numbers — the salary gap is after-tax cash vs. equity which may be taxed differently at exit.
✕Not modeling the break-even multiple — knowing what the equity needs to return is more useful than a single scenario.

Frequently Asked Questions