Salary Or Equity? Helping Women Entrepreneurs Decide
Do you know what your next job offer is really worth? A new online tool Salary or Equity aims to help entrepreneurs understand the value of their equity offer in a company by converting it into a salary.
Matt Wallaert, behavioral scientist and founder of Salary or Equity first identified the need for this tool when his mentee and cofounder Natalia Rodriguez, was struggling to evaluate her first start up offer.
“We built a simple tool that takes in some variables and spits out equity in the form of potential salary,” said Wallaert. “If we want women to benefit from the economic engine that is startups we need them to accept equity based offers,” he added.
While anyone can use the tool, Wallaert says the tool provides a solution to a problem that disproportionately affects women.
Raising women’s understanding of equity is a critical issue. The Small Business Administration, a government organization that provides assistance to small businesses in the United States, found that women typically lack exposure to venture capital investors and are more reliant on self-financing, which can act as a barrier to entrepreneurship.
Wallert says part of this issue is a lack of understanding about what equity is and how it works. “When you look at what makes start up people rich, it is equity not salary. The problem is that women tend to be risk adverse and are less likely to accept equity based offers because it feels risky,” he says.
The aim of Salary or Equity is to level this playing field. “Not only will women founders be able to understand the value of their equity they will also be able to walk potential hires through it. This tool will help them to explain why they have a lower initial salary but potentially a lot more money,” Rodriguez says.
There is a gender bias in funding women entrepreneurs, while they own 36 percent of all businesses, men are four times more likely to receive funding according to The 2015 National Women’s Business Council Report.
Rodriguez says the startup culture is notorious for excluding women and the Salary or Equity tool will help women be more informed about their career choices so that they can take risks and receive the potential payoffs.
“Salary is a very concrete concept. We all make a salary but not all of us have equity in a company. When you spin salary into equity it is so much easier to understand the financial stakes,” she says.
This tool is simple solution to helping women entrepreneurs understand the complex issue of what their equity in a company is worth in dollars per year so that they can make an informed decision about their next offer letter.
“I think that this is the right kind of tool to build. Many of these problems have not changed and the gender wage gap has barely moved in my lifetime,” says Wallaert.