Hey everyone,

​I’m looking for some advice on how to structure my equity package at a very early-stage startup. I have the flexibility to ask the company to modify my offer letter, so I want to make sure I get this right before the upcoming funding round closes.

​The Background

​Company Status: Pre-seed stage, currently sitting at around $110k ARR. They are actively moving to close their official pre-seed round soon.

​My History: I’ve been working with them as a contractor for the last 2 months.

​The Promotion: Once the pre-seed round completes, they want to bring me on full-time as a Founding Engineer (I am employee #2, right after the CEO).

​The Current Offer

​Base Salary + 3.5% equity in ISOs (Incentive Stock Options).

​My Dilemma & Goals

​Because the company is so early-stage, I want to optimize for the lowest possible tax hit (specifically avoiding the Alternative Minimum Tax / AMT) and maximize my upside. I know that right now, the company's valuation and strike price should be incredibly low, but that will change once the pre-seed round officially closes.

​I’m confused about whether I should stick with ISOs, push for RSAs (Restricted Stock Awards), or look into an early-exercise structure.

​My Questions for the Community:

​ISOs vs. RSAs at this stage: Since we are pre-seed and the valuation is low, should I push for RSAs (Restricted Stock Awards) instead of ISOs? My understanding is that RSAs would let me own the shares outright immediately (subject to vesting/repurchase terms) at a rock-bottom valuation.

​Minimizing AMT / Tax Hit: If I stick with ISOs, what is the best way to structure them to avoid AMT? Should I ask for Early Exercise ISOs and file an 83(b) election immediately?

​Timing the Strike Price: Can/should I ask to sign the offer letter and execute the equity portion before the pre-seed round officially closes? I want to lock in the absolute lowest 409A valuation/strike price possible before the new funding bumps up the company's valuation.

​Is 3.5% reasonable? As employee #2 (Founding Engineer) at $110k ARR going into a pre-seed round, does 3.5% sound standard, or should I negotiate for more given the early stage and risk?

​Would love to hear from any founders, early startup hires, or tech tax professionals on how you would handle this. Thanks in advance!

Been sitting with this observation for a while and i think it's finally clear enough to articulate.

The world doesn't pay for intelligence. It doesn't pay for potential, for good ideas sitting in a notes app, for the ability to analyze a problem from 12 different angles. It pays for results, leverage and distribution. And those things are often built by people with completely different strengths than the ones we associate with being smart.

A few patterns i keep seeing, and honestly recognizing in myself at different points:

Analysis feels safe. Execution feels risky. Analytical people live in their heads because it genuinely feels productive. You can always go one level deeper, refine one more time, find one more flaw in the plan. But real progress requires being okay with embarrassing first attempts and being wrong in public. Most analytical people would rather be right in private than wrong out loud.

Perfectionism is just fear with a better vocabulary. "I'm not ready yet" and "my standards are high" are sometimes true. But a lot of the time it's just that shipping feels exposed in a way that planning never does. Certainty doesn't come before action, it comes after it, and waiting for it is a trap.

The market rewards output not intelligence. You don't get paid for understanding the problem deeply. You get paid for reaching people, solving something real, building something that compounds. None of that happens in your head.

Smart doesn't mean effective. IQ helps you understand things faster. But effectiveness comes from focus, consistency, the ability to sell, tolerance for chaos and the capacity to keep moving when things are unclear. those aren't really taught anywhere, and they matter more to income than raw intelligence ever will.

The hardest thing to accept, and i've been guilty of this more than i'd like to admit, is that a lot of what feels like deep work is just discomfort avoidance with a productivity label slapped on it.

Curious if others have felt this tension, and what actually helped you shift from analysis mode to just moving.

Hey everyone, I’ve been working on an idea and wanted to see if this is something people would actually use, either as a customer or as a small business owner.

The idea is basically a local marketplace app focused on small businesses.

Customers could:

• Discover local businesses nearby
• Order products online
• Schedule services
• Choose pickup or local delivery
• Follow businesses and get promotions/notifications

Businesses could:

• Create their own storefront/profile
• Upload products/services
• Manage inventory automatically
• Track orders and analytics
• Build an online presence without needing their own app or website

For delivery, businesses could either:

• use their own drivers
• or integrate with services like Uber Parcel

The goal is mainly to help small businesses:

• get discovered more easily
• manage inventory/orders better
• and build a customer base locally

As a customer, would you use something like this?

As a business owner:
Would this solve any real problems for you?
What features would you want most?
What would stop you from using it?

Also:
What do you not like about current platforms like DoorDash, Uber Eats, Shopify, Square, etc.?

We’re working on a university startup project focused on student transportation.

The idea is a service that coordinates shared transportation for students going to school and after-school activities. Students would enter their address and schedule, and the system would assign optimized pickup stops and routes.

So far, we have:

• a survey to validate the problem,
• route simulations,
• and a prototype of the future app experience.

However, our professor told us that what we currently have is not really an MVP, and now we’re struggling to understand what the MVP for this kind of startup should actually look like.

A real operational MVP (like running an actual bus service) is obviously difficult at our stage, so we’re trying to understand what would realistically count as an MVP for a transportation/logistics startup like this.

Would manually coordinating routes, pickup stops, and schedules count as an MVP? Or would that still be considered only validation/prototyping?

Last quarter we paid a consulting firm around $8,000 for a competitor and market landscape report. Looked polished, 60+ slides, nice charts. The kind of thing that looks great in a board meeting.

But once I actually read through it, most of it was public info pulled from websites, LinkedIn, press mentions, pricing pages and reviews. Stuff I probably could've pieced together myself with enough time.

The bigger issue was that it was outdated the moment they sent it. Markets move fast and a static PDF doesn't move with them. There has to be a better way for founders to get ongoing competitive intelligence without paying consulting fees every quarter just to get another snapshot.

What are people actually using for this?

 We began our Series A in January, and investors are pushing their preferred public relations agency, which I do not like. Propheta Communications reached out earlier this year, and their team seems to know our technology and market well.

  I’m conducting one more round of agency research, and then I’m pulling the trigger. Am I doing the right thing here? Any last-minute recommendations for alternative agencies?

So I started many business some with business partners. I met a several who screwed me over. It was always hard to find a lawyer because they are so expensive. Where do you guys go to find a good lawyer that doesn't break the bank? Or is that even possible?

Many employees now use AI tools to write faster, summarize faster, research faster, and generate ideas faster.

  But at the company level, the productivity gains often seem less obvious. Work still needs to be reviewed, approved, routed, validated, and turned into real business outcomes.

  This makes me wonder whether the missing piece is not better AI models, but better systems for absorbing AI-generated work. Is the main productivity gap today organizational, rather than technical?

I've been seeing the same posts 15 times a day about founder vibe coding a tool and realizing the difficult part is not build, but rather execution. So I wrote a post addressing it directly.

Founders have always loved the fantasy. Build something great, launch it, and customers will show up. Most learn the hard way that this almost never happens.

But AI coding tools have made the fantasy much easier to believe. And that’s the problem.

When building software took months, teams had natural friction. You had to choose carefully. You had to explain the idea to engineers. You had to prioritize. You had to justify why this thing deserved to exist before anyone spent six figures and a quarter of the year building it.

Now one person can open Cursor, Lovable, Replit, Bolt, v0, or Claude Code and create a polished app over a weekend.

That feels like magic.

It also makes it dangerously easy to skip the only part that ever mattered: finding a market that actually wants the thing.

“If you build it, they will come” was always wrong because customers don’t reward effort. They reward relevance.

People don’t care how long you spent building. They don’t care how elegant the architecture is. They don’t care that your app has a beautiful onboarding flow, a clean dashboard, and a clever name.

They care whether you solve a painful problem at the exact moment they feel it.

Before AI coding tools, founders still fell into the build-first trap. But they hit constraints early.

A non-technical founder had to find a technical cofounder or hire engineers. A technical founder had to spend nights and weekends grinding through implementation. A team had to choose between features because engineering time was scarce.

Those constraints forced some thinking.

A founder would ask:

“Is this worth building?”

“Who exactly needs this?”

“Will they pay?”

“How will they hear about it?”

“What will make them switch?”

AI removed much of that friction. Now the question has quietly changed from “Should we build this?” to “Can we build this?”

And the answer is almost always yes.

That’s where people get in trouble.

Vibe coding creates the illusion of progress.

AI coding tools compress the distance between idea and output.

You describe the app. The tool creates the interface. You ask for auth. It adds auth. You ask for Stripe. It wires in payments. You ask for a dashboard. It gives you charts, filters, empty states, and a gradient that looks like every YC company from the last three years.

Within hours, you have something you can click.

That click is addicting.

A clickable product feels like progress because humans like tangible things. A Figma mockup feels more real than a positioning doc. A working app feels more real than ten customer calls. A demo feels more real than a distribution plan.

But “real” is doing too much work there.

You can have a real product and zero real demand.

You can have a login screen, billing page, onboarding checklist, and database schema before you have one sentence that makes a buyer say, “I need this now.”

AI makes it easier to build real software before you’ve found a real reason for anyone to care.

The cost of building dropped. The cost of attention did not.

AI has lowered the cost of software creation. It has not lowered the cost of distribution.

If anything, distribution has become harder.

Everyone can ship now. Everyone can generate a landing page. Everyone can create screenshots. Everyone can post “I built this in 48 hours” on X. Everyone can publish a launch video, write a Product Hunt post, and produce ten LinkedIn carousels with the same slightly breathless tone.

The bottleneck moved.

The scarce resource is no longer code. It’s attention, trust, urgency, and belief.

Customers have more tools than they can evaluate. More demos than they can watch. More AI copilots than they can remember. More “all-in-one platforms” than they can distinguish from one another.

So when a founder says, “But the product works,” the market shrugs.

Of course it works.

That’s table stakes now.

The harder question is: why should anyone rearrange their day around it?

Vibe coding rewards the wrong founder instinct

Most founders already prefer building to selling.

Building feels safe. You control it. You can improve the product, fix bugs, add features, redesign the homepage, and convince yourself you’re moving forward.

Selling exposes you.

You have to ask someone to care. You have to hear confusion in their voice. You have to watch them ignore your follow-up email. You have to accept that the idea in your head may not survive contact with the market.

AI gives builders a perfect hiding place.

Instead of doing ten painful customer conversations, you can build ten more features. Instead of narrowing your buyer, you can create a flexible product that “works for lots of use cases.” Instead of writing a sharp positioning statement, you can ask the model to generate five landing page variants.

It feels productive.

It can also become avoidance with a beautiful UI.

The founder tells himself he’s iterating. But he’s not iterating on demand. He’s iterating on the object.

There’s a difference.

The market does not buy capability. It buys a specific change

AI tools encourage founders to build capabilities.

A CRM for creators. A dashboard for agencies. An AI assistant for real estate brokers. A research tool for investors. A workflow platform for operators.

All of these can sound plausible. Most will fail.

Why?

Because customers rarely wake up wanting “a capability.” They wake up wanting a specific change in their life.

They want to stop spending Sunday night preparing a board deck.

They want to answer customer emails without hiring another support rep.

They want to know which accounts are likely to churn before the renewal call.

They want to turn messy founder thoughts into five sharp LinkedIn posts before the baby wakes up.

That level of specificity matters.

A product built around a broad capability usually feels optional. A product built around a painful moment can feel urgent.

AI helps you build the broad capability faster. It does not automatically help you find the painful moment.

You still have to talk to people.

Annoying, I know.

The MVP is getting misunderstood

Founders used to define an MVP as the smallest thing they could build to test a market assumption.

Now many people treat an MVP as the fastest full-looking app they can generate.

That’s not the same thing.

A real MVP tests a risky assumption.

Will recruiters pay to find candidates this way?

Will accountants trust AI to draft client memos?

Will parents invite other parents into a private coordination app?

Will sales managers change pipeline review behavior if reps get automated coaching?

A vibe-coded MVP often tests something else:

Can I make the app work?

Can I make it look credible?

Can I connect the APIs?

Can I generate enough features that people understand the vision?

Those questions may matter later. They rarely matter first.

The first question is usually much more brutal:

Does anyone want this badly enough to do something inconvenient?

Pay. Switch. Migrate data. Invite a teammate. Change a workflow. Risk looking stupid. Reply to a cold email. Schedule a demo. Enter a credit card.

If they won’t do one of those things, your product may not have demand yet. It may only have applause.

AI also makes fake validation easier

Here’s the uncomfortable part: AI doesn’t just help founders build faster. It helps them manufacture the feeling of validation.

You can generate:

• A polished landing page
• A waitlist
• A launch post
• Customer personas
• Market research
• Competitor analysis
• Sales emails
• Testimonials placeholders
• Demo scripts
• Investor-style narratives

Some of that can help. But it can also create a movie set.

From the street, it looks like a company.

Walk behind the facade and there’s nothing holding it up.

The danger is not that founders use AI to support go-to-market work. They should. The danger is that AI can make weak evidence look strong.

A hundred waitlist signups from curiosity traffic is not demand.

A few “this is cool” replies are not demand.

A viral post from other builders is not demand.

A prospect who says “circle back next quarter” is not demand.

Demand looks like someone trying to pull the product out of your hands before it’s ready.

The new founder skill is not building. It’s sequencing.

AI does not make building irrelevant. It makes sequencing more important.

The best founders will not stop building. They’ll build in tighter loops around sharper market signals.

They’ll ask better questions before they open the editor:

Who feels this pain today?

What are they using now?

What happens if they do nothing?

Why have existing tools failed them?

Where do they already look for help?

What would make them switch this week?

What proof would they need before trusting us?

Then they’ll build the smallest artifact that tests the next assumption.

Sometimes that artifact is a product.

Sometimes it’s a landing page.

Sometimes it’s a concierge workflow.

Sometimes it’s a spreadsheet.

Sometimes it’s a five-line cold email.

The amateur uses AI to build the product he imagined.

The pro uses AI to test whether the market is real.

What founders should do instead

If you’re using AI coding tools, keep using them. They’re incredible.

Just don’t let speed trick you into skipping the work that speed cannot replace.

Before you build, write the sales email.

If you can’t write a clear email to a specific person with a specific pain, you probably don’t understand the market yet.

Before you add features, get someone to commit.

Not compliment. Commit.

Ask for money. Ask for a pilot. Ask for data access. Ask them to introduce you to the teammate who owns the problem. Ask them to use the ugly version this week.

Before you polish the UI, make the promise sharper.

A beautiful product with vague positioning loses to an ugly product that says exactly what the buyer already believes they need.

Before you call it an MVP, name the assumption.

If the build does not test a specific risk, you’re not learning. You’re decorating.

And before you celebrate how fast you shipped, ask the question founders hate:

Did anyone pull?

The paradox gets worse before it gets better

AI vibe coding tools will create a flood of software that looks finished but has no audience.

More apps. More dashboards. More wrappers. More “AI-powered” workflows. More weekend builds that feel like startups for about nine days.

But the same tools will also help serious founders move faster than ever.

The difference will not be who can build.

Everyone can build now.

The difference will be who can think clearly enough to build the right thing, for the right person, at the right moment, with the right path to reach them.

That’s the part AI has not automated.

Hello all, I’m building a small niche consulting service focused on law enforcement applicants navigating background investigations (helping people understand disclosure consistency, common pitfalls, and how to avoid preventable mistakes during the hiring process).

I’m still early and trying to figure out the best way to validate and reach potential clients without spending months building a content audience first.

For founders here who started service-based businesses, what were the fastest legitimate ways you validated demand and got your first paying customers before you had an audience?

Hi everyone,

I have been building a deep tech company for close to 10 years, it had its ups and downs, but i currently find myself misaligned with the board and having a hard time. I am no longer CEO and have about 15% equity. I stepped down as CEO about 1 years ago ago and I had 3 years vesting at that point. I would now like to exit in the best way possible keeping as good relationships as possible and start a new company. However if I resign I will loose abt 50% of my stock. I’m pretty sure the other VCs agree that I can move on as some board members are passive aggressive towards me and trust between me and board is very low, I would like to do this in a healthy way, however I am afraid to initiate as I loose too much equity. The VCs have forced many changes that I have spoken up about, I still believe in the company and would want as much equity as possible given the situation. Anyone have any good advice on how to approach this and particularly how VCs view such situation? Any way I can position myself into a non-operational role, I still bring lots of value and are to some extent still seen as the face of the company externally and sit on the board.

Some info on the company, VC backed valued at $40M, not cash flow positive and needs to raise in 6-9 months, current investors seems willing to bridge.

Thanks for any insight that helps resolve this challenging situation.

I'm feeling weird and want some opinions

I've been working on a product for a few months, and I'm starting to realize I think it's too pretty. Like, I keep staring at it proud of how it looks and how it works, which sounds good but I'm worried.

Two things I'm afraid of:

- I'm afraid of not being able to see what is missing: I built it the way I would want someone to have built it, so for me everything is just where it needs to be. I worry I'm missing obvious UX friction or confusing flows

- I'm also afraid of optimizing the wrong things: I spent 3 hours this week tweaking a micro-interaction that users probably won't even notice, but I notice it. Meanwhile, there's probably real issues I'm ignoring.

Have you guys ever felt like that? How do you deal with it? Only by getting feedbacks?

I’m doing a spin-out from a larger company and I’m so excited that things are finally going well for me after two and a half years.

The vast majority of that time, I was trying to spin-out something different with a co-founder. It was awful. I was doing all of the work while he quiet quit but declared himself CEO, and was undermining me at every step. I couldn’t understand why my life was becoming unfathomably harder and harder, but once I found out what he was doing (and not doing), I dropped that shit like a hot potato.

Everyone at the company found out what he was doing too. Not only did he lie to everyone and play all of these ridiculous games, but his behavior caused the entire project to sink like a rock once I left. So the company fired him and dropped it too.

However, everyone saw how hard I worked and I said I’m still really excited about a lot of the ideas we had. So they were more than happy to support me doing my own spin-off, with a different focus and approach. They’re asking their investors to divert the previous spin-off funding to me and are thrilled to be my first investors and partners.

I have internal beta testers set up for the next two weeks and I’m currently working on getting the prototype ready for install and testing.

All of the investors I met for the first spin-off want to get involved too. I couldn’t move forward with them because my co-founder was blocking it, which made everyone sad, but since they really like me, they’re more than happy to see where this new one goes.

I’m just super stoked that I have all of this traction already. This is WAY easier than the previous spin-off because I don’t have some dude who makes me do all of the work while secretly making my life as hard as possible.

I feel like I just came out of the 1000x gravity training gym and these backflips are so easy, wtf

Obviously, there’s a lot of uncertainty and things need to solidify, but I’m just really excited and wanted to share!

Hi everyone,

I have been building a deep tech company for close to 10 years, it had its ups and downs, but i currently find myself misaligned with the board and having a hard time. I am no longer CEO and have about 15% equity. I stepped down as CEO about 1 years ago ago and I had 3 years vesting at that point. I would now like to exit in the best way possible keeping as good relationships as possible and start a new company. However if I resign I will loose abt 50% of my stock. I’m pretty sure the other VCs agree that I can move on as some board members are passive aggressive towards me and trust between me and board is very low, I would like to do this in a healthy way, however I am afraid to initiate as I loose too much equity. The VCs have forced many changes that I have spoken up about, I still believe in the company and would want as much equity as possible given the situation. Anyone have any good advice on how to approach this and particularly how VCs view such situation? Any way I can position myself into a non-operational role, I still bring lots of value and are to some extent still seen as the face of the company externally and sit on the board.

Some info on the company, VC backed valued at $40M, not cash flow positive and needs to raise in 6-9 months, current investors seems willing to bridge.

Thanks for any insight that helps resolve this challenging situation.

This has been bothering me for a while.

Stripe owns payments globally. Amazon owns commerce globally. Google owns search globally. But there is no single company that owns hiring across markets. Not even close. LinkedIn comes nearest and still doesn't actually control how most hires get made.

The recruitment industry is worth close to a trillion dollars. There are thousands of job boards, ATS companies, staffing firms, and sourcing tools. India alone has over 5,000 staffing firms. And nobody has built the global operating system for hiring.

I used to think this was a technology problem. Like, nobody had built the right product yet.

I don't think that anymore.

The reason is that hiring isn't a transaction; it's more of a trust decision. And trust doesn't cross borders the way money does.

A payment clears or it doesn't. A candidate has to decide if a role is worth changing their next three years. That decision is full of context that won't globalize. In India you're working around 90-day notice periods, counteroffer cultures, compensation anchors set by GCCs, and trust that travels through WhatsApp groups and ex-colleague intros before any formal outreach lands. In Germany it's works councils. In Japan it's something else entirely. Every market has a different answer to the question "why would I actually leave."

Every tool that's tried to go global has had to choose between building for one market's behavior and underperforming everywhere else, or building something so generic it fits nowhere well.

I'm not sure this is fixable. Maybe the category structurally resists global winners because the product you'd need to build isn't a payment rail. It's a cultural translation layer for every labor market on earth. That's not a product. That's twenty products pretending to be one.

Which is a strange thing to sit with when every investor conversation goes back to global TAM.

For people who have hired across multiple countries: does the local context actually change how you operate, or do you find a way to run one process everywhere?

My SaaS has 4,000+ customers. And the product does what it says, pretty good actually.

And yet every few months I get on a call with someone who used one of those AI outreach tools, sent thousands of messages, and got nothing back. 

Here's what I've noticed after watching this happen for 5 years.

The people who are actually best at cold outreach, the ones running agencies that consistently get 40-70% reply rates, think most of the AI being built for this category is making it actively worse. 

Because these tools flood inboxes with generic messages, train buyers to ignore everything, and make it harder for everyone who's doing it properly.

What the best cold outreach agencies actually do looks nothing like what AI SDRs do.

They spend more time on targeting than on copy. They figure out a specific angle for a specific market rather than personalizing the same message a thousand different ways. They use Clay to build signal-based lists, Smartlead or Heyreach for sequencing, and increasingly Claude Code for custom campaign logic. When they're done, they might send 200 messages instead of 2,000, and they get more replies.

The intelligence in good outreach isn't in the automation layer. It's in the judgment that happens before the first message goes out; which segment, what angle, why this account is worth reaching right now.

That judgment is what none of the tools currently being built actually have. 

Every sequencer, every AI SDR, every agentic outreach platform executes whatever strategy you give it. My product does this too. Give it a bad strategy and it will execute that bad strategy perfectly, at scale, until the account runs out of leads to disappoint.

I've been watching this problem from close range for 5 years. And after being on more than 1800 sales calls where I kept seeing the same pattern, I started building a second product.

The idea is straightforward. 

Take how the best cold outreach agencies actually think: which segments they go after, what angles land, what a qualified reply looks like, and turn that into something AI can execute. So the strategy comes built inside the product, not something you figure out before you start.

It’s still early, I don't have any results to share yet. 

But if you've run into this problem from either side, I’m curious to know what you've tried.

Hello all, I’m building a small niche consulting service focused on law enforcement applicants navigating background investigations (helping people understand disclosure consistency, common pitfalls, and how to avoid preventable mistakes during the hiring process).

I’m still early and trying to figure out the best way to validate and reach potential clients without spending months building a content audience first.

For founders here who started service-based businesses, what were the fastest legitimate ways you validated demand and started your growing customer base before you had an audience?

Thank you.

The competitors app, like mine, is 100% free and has no ads/IAP:

(check play store "globo")

Somehow he managed to get to 100K+ downloads on android

While I am at 1k+ downloads:

(check play store "geochamp")

We are both doing lots of reddit marketing, I checked. But he never created any viral post, and reddit marketing alone could NEVER lead to 100k downloads.

SO:

I assume he invested a significant amount of money into running play store ads to get users? How much for 100.000 users would I need to invest? 10.000$ ? 50.000$?

... would be surprising to see someone invest money into running ads for an app that has no IAPs/ads

Also note:

his product is worse. So it's definitely not the product that matters

Am I the only one noticing this trend of recent YC companies? Is it the AI boom thats causing this, or is it just that these slop machines are getting the bulk of the attention because they're so flashy. I have been noticing YC is heavily funding younger founder with little to no experience producing products that barely work, and absolutely do not hold up to what they show in their demos. Then when you visit their site, the links don't work, you can the see overly AI generated slop(cards upon cards), and zero respect to any design principles. There are even some companies that are outright frauds, their demo is not at all what they do or how they work, or they make claims like they have some proprietary AI model, when you can clearly tell its just some LLM wrapper.

Dear friends,

I'd like to ask the crazy startup people working in GovTech like me, what GTM channels work for you?

In our case, we found that conferences work really nicely. We also apply to RFPs/RFQs that are relevant for us. Other than that we are experiment with good 'ol cold email outreach with non-existent results.

I'm wondering if there is something else that we can try. We'll maybe try cold calling but don't have much hope with that one. Any suggestions/ideas?

I'd appreciate to receive comments from people having first-hand experience in GovTech since that's a world on its own and the rules of B2B/B2C hardly apply.