Instacart is a grocery delivery service that has grown exponentially (especially during the pandemic) and is on the verge of an IPO. They've declared the company will go public sometime in "mid-2021" and hired a tier-A leadership (including Fidji Simo, former head of Facebook App) to navigate this transition. The big question now is how the IPO will impact compensation at what is one of the highest paying tech companies.
The goal of this guide is to equip you with the essential pieces of information you need for your upcoming Instacart negotiation. If your situation is unique or you want 1:1 support to ensure you maximize your compensation, please sign up for a free consultation with our expert negotiators.
Before starting any negotiation, it is important to understand the bigger picture when it comes to compensation components offered. A typical job offer for a tech role at Instacart (e.g. Software Engineer) should contain the following monetary components:
This is what a L5 Senior Software Engineer offer at Instacart looks like over a 4-year period.
Note: stock refreshers won't actually be listed in the offer letter, but they are expected at Instacart. Ask your recruiter about this for more information on ranges.
Instacart's base salary can be negotiated, but in-line with industry standards, it's not something that changes dramatically during the negotiation. However, one key thing to note is the impact of years of experience on base salary at Instacart in particular. We've seen L3 Engineers with 1 year of experience make as low as $115k base, and L3 engineers with 5 years of experience can make up to $165k base, even if both are starting at Instacart at the same time.
This has a reverse bell curve effect in mid-levels, with the base salary range being much smaller from L4 - L6, then the range opening up a bit more in the higher levels.
Stock Options or Restricted Stock Units (RSUs)
Since Instacart is on the verge of an IPO, many rumours have been floating around about their equity structure. This article aims to clear up any misinformation and provide clarity on the situation at Instacart in 2021.
Fact or Fiction? - Instacart will clawback your equity if you leave the company pre-IPO. Fact - like Facebook before it, many startups will switch from issuing options to RSUs pre-IPO (Instacart did this in 2019). As of 2020, Instacart contracts state that you will not own your equity until the company goes public. If you quit (or are fired) prior to the company going public, you lose all your equity - including equity you would have otherwise vested prior to leaving.
Fact or Fiction? - Instacart will give you a dollar-equivalent number of stocks dependent on each quarter’s valuation. Fiction - Instacart quotes a dollar value during negotiation but converts that to a fixed number of stocks based on the company valuation at the first board meeting after you join. This does not change quarter-over-quarter and if the stock price increases you will benefit (unlike at Stripe). For example, if you get $250k RSUs over 4 years as your initial grant, and Instacart was valued at $250 when the grant was first offered, you will get 1000 stock units.
Fact or Fiction? - Instacart allows you to sell and transfer stocks prior to IPO. Fiction - You cannot sell or transfer any stocks before the company goes public.
Fact or Fiction? Instacart's most negotiable component of compensation is equity. Fact - Equity bands at Instacart are quite wide, especially for folks at higher levels. We've seen the equity for L7 candidates range from 1.3 million over 4 years up to 2.4 million over 4 years.
At Instacart, RSUs are subject to a 4-year vesting schedule: 25% vests at the end of the 1st year (there is a 1-year cliff), then 25% in each of the 2nd, 3rd, and 4th years (6.25% every 3 months).
Signing bonuses at Instacart are the second most negotiable component of compensation. We regularly help clients negotiate large signing bonuses into their offers. Signing bonuses at Instacart are competitive but slightly lower than industry-leading companies (e.g. Facebook). For example, Facebook E5 Software Engineers can get signing bonuses of up to 100k added to their offer, while we've seen signing bonuses max out at around 60k at Instacart for L5 Software Engineers. Additionally, Instacart is a bit less willing to give out its max signing bonus compared to Facebook.
Instacart recruiters follow the same formula as other companies in that they try to leave off signing bonuses initially on their offers as a way to test the candidate to see if they'll negotiate. The best way to mitigate this is when first hearing the offer, ask "are there situations where signing bonuses are possible?". Frequently your recruiter will respond with something like "only if you have a competing opportunity with a signing bonus or a bonus at your current workplace". If one of those options is relevant in your situation, you should bring that up during the counter offer stage.
Unfortunately, Instacart offers no annual cash performance bonuses, though they do have 3-5% annual base salary bump depending on performance and stock refreshers which we will discuss below.
Instacart has competitive stock refreshers. The refresher program is very similar to Facebook, where every year you receive an additional equity grant that is typically 25-33% of the original equity grant you received. This new grant will also vest over 4 years. As mentioned above, the size of the refresher will be determined based on your initial equity grant, so it is role and level dependent. However, this value can 3x if you receive the highest performance rating.
Refreshers are paid out in April or May. You won't get a refresher grant until you finish year 1 and the first vest will be the beginning of year 2, as is common amongst other big tech companies like Facebook or Google. After the initial refresher grant, you will continue to get these grants on a yearly base.
Stock refreshers are not guaranteed and are not explicitly listed in the offer letter. However, this is normal for most tech companies, and you should still factor these into your decision. Similar to equity, if you leave the company prior to the IPO, these refreshers will be clawed back along with your initial RSU grant.
Candidates often find it helpful to have a high-level overview of the negotiation process. Before diving into that, it's important to understand how Instacart's levels compare to other tech companies. We will use Google as the base case.
If you have not yet received an offer from Instacart, there are a few mistakes to avoid making:
With that out of the way, let's discuss the negotiation process at Instacart:
There are two primary differences between junior and senior negotiations at Instacart:
Don't need offers in writing: Unlike Google, Instacart does not usually require you to provide cross offers in writing. This can be useful because many companies avoid putting their offers in writing until you commit to signing, which makes it hard to use them as leverage in other negotiations. They will likely ask for offer breakdowns, though, so be prepared to provide that in your cross offer.
Competitive Refreshers: If you have a competing offer, you can use Instacart refreshers to negotiate a higher value from Company B. You can then bring this new number from Company B back to Instacart and ask them to match it. They will usually do this excluding stock refreshers since those aren't specified in the offer letter. This tactic works particularly well at Instacart since recruiters are usually willing to quote a target refresher number when you ask.
Instacart's upcoming IPO: Instacart is rapidly approaching its IPO and has recently made some changes to their RSUs and refreshers. Make sure to confirm with your recruiter all equity related information, and ask questions if any points are unclear. We've seen recruiters exaggerate what you can expect to get and how much your stock will be worth in just a few years. You should always ignore claims about stock appreciation, and when it comes to refresher targets, you should ask what number is the "Meets Expectation" target.
Tight Timelines: In the past, we've seen Instacart be tough on timelines, sometimes giving folks as little as 24 hours to respond to an offer. It is especially important if you have multiple offers, that you set timeline expectations with your recruiter early and often. Let them know when your interviews will be wrapped up, and what length of time you'll need to respond to the offer. If the recruiter is unwilling to budge there are other tactics you can use (e.g. hiring manager conversations) to extend the deadline. Reach out to the team here at Moonchaser if you have more questions about this.
Step 1 is defining the strategy, which often starts by helping you create leverage for your negotiation (e.g. setting up conversations with FAANG recruiters).
Step 2 we decide on anchor numbers and target numbers with the goal of securing a top of band offer, based on our internal verified data sets.
Step 3 we create custom scripts for each of your calls, practice multiple 1:1 mock negotiations, and join your recruiter calls to guide you via chat.