Episode 5 of 6
The Salary Negotiation
Fiona's co-founder proposes raising her salary to $130k as part of the Series B. She models the trade-off: higher salary now vs. larger equity refresh at the lower salary. The tax implications are significant.
Key Insight
The $50k salary increase yields $37k after tax annually. An equivalent equity grant at the Series B valuation would be worth $150k — but only if the company exits above $40M. At Fiona's estimated 60% probability of a successful exit, the expected value of salary ($37k certain) exceeds the equity refresh ($90k expected).
Model This Scenario