This 32-year-old cashed out on over $2 million in startup equity—here are five tips on how to negotiate for more shares

This 32-year-old cashed out on over $2 million in startup equity—here are five tips on how to negotiate for more shares

Bhavik Vashi, 32, made over $2 million after selling his equity in software startup Anaplan.

Bhavik Vashi, 32, is living the dream of many Silicon Valley tech workers. He joined a promising startup, did his time and eventually the company was acquired, minting him as a millionaire.

Shortly after graduating from the University of California, Berkeley in 2013, he joined software startup Anaplan. Over the course of about 10 years at the company, Vashi worked his way up from an entry-level consultant role to vice president.

“When I joined, we were less than 100 people… and then I just [saw] it grow and expand to over 2,000 people at one point,” Vashi told CNBC Make It. “Basically, every time I was promoted at Anaplan, I had an equity grant of some capacity.”

It all paid off in June 2022, when Anaplan was acquired by private equity company Thoma Bravo at a roughly $10.4 billion valuation. Under the deal, all Anaplan shareholders received $63.75 per share.

Vashi made over $2 million after selling all of his equity in the software startup, according to documents seen by CNBC Make It. Today, he has moved onto a new role as the managing director for Asia Pacific and the Middle East at software company Carta.

“It was enough to make me dedicate the next chapter of my life to spreading the good word about equity to more people, and [try] to get companies, even [those] outside of venture capital, like furniture stores and mom and pop shops to think about democratizing ownership as a concept,” he said.

While he acknowledged the role luck played in his payout, he also credited a couple strategic moves he made for his success. Here are five tips on how to negotiate for more equity at work, according to Vashi:

1. Identify what you want

2. Make sure your company aligns with your goals

3. Be crucial to the success of the company

4. Network, network, network

5. Be prepared for the opportunity

Sample script for negotiating equity

Even when well-prepared, it can be difficult to effectively articulate your thoughts when you’re in the negotiation room, so here is a sample script that Vashi gave to help structure your argument:

“For me, I’m at a stage of my career where I’m less focused on my cash compensation. I’m looking to join a company that I believe is going to be successful, and if I believe it’s going to be successful, then I want my personal financial well-being tied directly to the success of the company.

If that’s not a relationship that you would like to strengthen through the form of an increased equity grant, perhaps it’s not a great fit for us, because I want to work really hard, and I want to know that all that hard work is eventually going to be able to manifest itself in value for myself as well as the company.”

Asking for equity in a company is a big “show of faith” in the company, said Vashi, because not only are you tying your own financial well-being to the business, but you are also committing to a longer time horizon as equity is traditionally granted over a four-year vesting period, so making that known may just help your case.

Want to master your money this fall? Sign up for CNBC’s new online course. We’ll teach you practical strategies to hack your budget, reduce your debt, and grow your wealth. Start today to feel more confident and successful. Use code EARLYBIRD for an introductory discount of 30% off, now extended through September 30, 2024, for the back-to-school season.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.

Source link

See also  European stocks close lower as traders focus on earnings and bond yields
News