Here are five tips on how to negotiate for more shares after cashing out on over $2 million in startup equity at the age of 32.

Bhavik Vashi, a 32-year-old tech worker in Silicon Valley, achieved the dream of many by joining a promising startup, completing his time, and eventually seeing the company get acquired, making him a millionaire.

After graduating from the University of California, Berkeley in 2013, he joined software startup Anaplan and worked his way up from an entry-level consultant role to vice president over the course of about 10 years.

""When I joined Anaplan, we had fewer than 100 people. Now, we have over 2,000 people, and I have always received equity grants whenever I was promoted," Vashi said in an interview with CNBC Make It."

In June 2022, Anaplan was acquired by private equity company Thoma Bravo at a valuation of approximately $10.4 billion. All Anaplan shareholders received $63.75 per share under the deal.

According to CNBC Make It, Vashi sold all of his equity in the software startup and made over $2 million. He is now the managing director for Asia Pacific and the Middle East at software company Carta.

"It was enough to inspire me to dedicate the next chapter of my life to spreading the message of equity to more people and encourage companies, even those outside of venture capital, such as furniture stores and mom and pop shops, to consider democratizing ownership as a concept," he stated.

Vashi provided five tips on negotiating for more equity at work, acknowledging the role of luck in his payout but also attributing his success to strategic moves he made.

1. Identify what you want

The first step is to determine what your company offers.

"Some employees in Silicon Valley may make a mistake by placing too much emphasis on equity because they observe successful startups, but it is statistically unlikely that they will become millionaires with just equity. In fact, 98% of startups fail."

To ensure that your cash compensation covers your operating expenses and living expenses, you should first assess your current budget and lifestyle.

Vashi stated that once you have a solid foundation, you can then focus on requesting equity.

Vashi stated that most retail investors lack access to certain asset classes, and it is crucial to maximize this aspect of your portfolio because it offers a unique opportunity to earn significant returns. However, this asset class is not readily available in many places, making it a rare "lottery ticket" that investors should not miss out on.

2. Make sure your company aligns with your goals

Ensuring that your company offers equity compensation and feeling confident in the business is crucial if you want to own equity.

In Vashi's case, Anaplan was a company that "was experiencing so much growth and success," he said. "There were always new and exciting challenges for me to take on anytime I started to feel even a little bit complacent or comfortable."

Vashi stated that when negotiating for equity instead of cash compensation, it implies that their financial outcomes are directly tied to the company's success and they are putting their bet on it.

To ensure that you are passionate about the company you work for, it is crucial to research its equity practices.

Understanding the company's trajectory can help you make a more calculated decision about the worth of equity at that company, according to Vashi.

3. Be crucial to the success of the company

The best way to secure equity compensation is to make yourself extremely valuable to the company, according to Vashi.

The founder typically has the largest stake in the company because they are crucial to its success, and investors receive a significant stake due to their financial contributions.

Vashi stated that employee evaluations are "based on contributions, whether actual or expected."

4. Network, network, network

Networking proactively within your company is a way to show your worth, advised Vashi.

Vashi advised against limiting personal growth based on a manager's advocacy, and instead encouraged individuals to advocate for themselves and make their contributions visible to both their manager and skip levels.

Vashi emphasizes the importance of being proactive at work, even though culture may vary among companies, industries, and regions. Employees must often advocate for themselves in a work environment.

5. Be prepared for the opportunity

A strong case is crucial for a successful negotiation, so it's important to prepare beforehand.

Vashi advised documenting your contributions to articulate how your work contributes to the success of the business.

"Building a portfolio of your own work will be beneficial in every raise conversation. You can later use it to create a PowerPoint presentation, which is more concise when advocating for your team and function."

Sample script for negotiating equity

Here is a sample script that Vashi provided to help you structure your argument when negotiating, even when you are well-prepared:

I am at a stage in my career where my focus is less on my cash compensation. Instead, I am seeking a company that I believe will be successful, and I want my personal financial well-being to be directly tied to the success of the company.

If you're not interested in strengthening your relationship with us through an increased equity grant, it may not be the best fit for you, as I value hard work and want to ensure that my efforts contribute to both my personal growth and the success of the company.

Vashi stated that requesting equity in a company is a significant demonstration of confidence in the business because it involves linking one's financial future to the company and committing to a longer-term perspective, which may strengthen one's argument.

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