tl;dr: Got a job offer, current boss countered with a pay raise and equity stake. What do I need to watch out for?
Long version:
I work for a startup (<10 full-time employees), and play a major role in product development. While I really enjoy the work I do, there are a couple aspects of the job that have come to bother me:
1) I didn't get any raises for three years, and when a raise came, it was for 5%, so basically <2% per year
2) I have the misfortune of living in Illinois, where tax rates are high and rising, and schools are underfunded and getting worse.
So earlier this year, I started half-heartedly looking for work in a place closer to DW's family and with lower taxes. I landed a few interviews, and about a week ago, I got a job offer.
My current boss, when I started interviewing, requested that if/when I got a job offer, I allow him an opportunity to counter. I told him about the offer I received, and the next day he presented me with this counter offer:
1) 5% higher salary than whatever the other company is offering (8% higher than my current salary, and 14% higher than I was making 6 months ago), and
2) some equity in the company, vested over two years
He plans to sell the company in 2-3 years, and this has never been a secret. I'm currently 37, with a plan to FIRE at 51. With my equity stake, and with the growth rate we're seeing and expecting, that sale would make me comfortably FI at age 40. Naturally, his has a certain appeal to it.
But before I run off and sign the agreement, I'd like to solicit some feedback. I know it's possible for the equity to be worth $0 in a few years if things turn south, but I'm not being asked to take equity in lieu of salary. There are no strings attached, other than losing some or all of that equity if I leave in the next two years.
Has anyone here had a similar experience? Are there caveats or pitfalls I should look out for?