Don't. Situations like this will test your friendship (especially when there is both an information and power disparity between you).
You basically can have a boss or a friend, not both.
Ask HN: Those who've joined a friend's startup as an employee, how did that go?
231–240 of 300 posts
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#232Earlier quoted context omitted.
>people don't want equity as much as they want a living wage. I'd add the caveat that equity is worth more than it isn't so limited in usage for those it is distributed too. 1 year cliff, 4 year vest, but company likely to just retrench you? Worthless. Developers don't stay that long on average, and the sale terms are basically handcuffs waiting for an exit event. Constant promises of revshare when profitability is r…
People who say: "Anyone giving you a wage while seeking a profit instead of partner equity is taking advantage of you tautologically" assume all startups have huge exit and don't account that equity can actually go down to $0 - that $100 I get today wired to my account does not go to $0 suddenly. Then you might be stuck with equity because there might be no one who will buy it off - or company board won't approve of…
When I say equity over wage I don’t mean no profit sharing either, or no compensation for labor. Go learn about worker cooperative structures in practice. I’m not talking about joining startups on equity alone
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#233Earlier quoted context omitted.
> IMO, it should be illegal to launch a limited liability company/corporation and only allow specific people to buy shares. I object to the idea of incorporation and limiting directors' liability to begin with but since it is allowed, at the very least, it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time. I don't under…
>> If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them. If you own all the shares initially, it means you get to set the price to whatever you want (and hope that someone is willing to pay that price), or you can just hold them and keep them all to yourself. BUT, if you…
> it’s not the government’s job to protect people from scams ahead of time.
What a strange claim. Protecting people from scams is literally what the Federal Trade Commission is for, among other agencies. Bankman-Fried was arrested due to breaking existing laws that define what some scams are ahead of time.
> Nobody’s Labour ever makes a difference.
I can see why some people with little to no experience in business or starting companies can get this impression and form pessimistic opinions based on negative stuff you hear in the news or social media. Fortunately, it’s only true of the worst offenders, and not generally true. People’s efforts do make the difference to the success of startups all the time. Having money for sure helps, and primarily affects whether people can afford to try, and for how long, but it’s not as good at ensuring success, effort and timing and luck play larger roles there.
> The bigger the company, the higher the risk.
Why do you believe this? I’d guess fund managers and most investors would outright disagree. The safest single company stocks are the largest companies. A bigger company may have more to lose, but they’re bigger in the first place only because they survived the small and medium phases. The probability of a company failing is much higher when small, and most startups fail before ever getting to small company size, and most of those fail before getting to the medium or large company size.
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#234Really depends on the disposition of the person
I have successfully done it twice, including my current role.
I have also hired someone who I knew socially and it went terribly because he didn’t really perform.
If I thought it would get to the point of severely damaging a friendship that I value, I would simply resign. What I would be left with is some equity and I am happy cheering on a friend from the sidelines while having a piece of the upside.
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#235Earlier quoted context omitted.
>> If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them. If you own all the shares initially, it means you get to set the price to whatever you want (and hope that someone is willing to pay that price), or you can just hold them and keep them all to yourself. BUT, if you…
This is like reading the early chapters of a fiction story about an alternate universe. What, to you, is the difference between these two situations? 1. One person decides to form a company and has all the shares. After six months, he realizes he should really have worked with a cofounder, so he closes that business and opens a brand new one with this cofounder, the two of them now equally owning half the shares. 2.…
First sentence I agree with, but I don’t understand your hypothetical. #2 is what usually happens, and non-co-founder very high level early employees don’t usually get 50% or anywhere close. If the original founder made any progress and has anything of value in the first six months, a 2nd co-founder may not get 50% in either case.
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#236Horribly, I joined a friends start up and it was all lies. I didn't realize they were dishonest and that friendship meant nothing to them. Basically every promise they took back. I was young and naive so I didn't get it in writing.
In the end I left with them owning me money I never got back. It was a lot for a young person.
All that said, it wasn't because we were friends, it was because they were dishonest so your mileage might vary.
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#237Earlier quoted context omitted.
It's wild that you said that amount because that was exactly the number. I have other friendships that have been tested for similar amounts that have survived. But, it leaves a mark. I had an ex-employee who worked for me under starvation wages in a startup long ago. He was upset about that and some tax implications, and brought it up with me. I gave him a smallish lump sum and enabled him to put a down payment on a…
Wow. $20k seems like a paltry sum to end a friendship over.
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Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#238Earlier quoted context omitted.
> nevertheless this person probably never was your friend. sry No, it's completely common for friendships to break down over business. Very few friendships are robust enough to survive one party costing the other $20,000.
> Very few friendships are robust enough to survive one party costing the other $20,000. That probably depends on how critical that $20k is to you. If it's your only $20k, then yeah it'd be much more impactful than if it's just one of many.
Certainly, if the loss means you encounter financial hardship, you'd be understandably resentful.
But even when the loss causes little financial hardship, it could put a strain on a relationship.
Imagine you invest $20k in my business and I buy a $5k industrial juicing machine for the office so my staff can have freshly squeezed orange juice. I tell you that employees expect free luxury food these days and it'll make hiring much easier. You have your doubts.
If the business does well and we both make a big profit - we're both happy. You still think the juicer was a bit extravagant - but it all worked out in the end, and maybe I was right that it helped with recruitment.
But if the business fails - you might resent the fact I wasted $5k of your money on a juicer.
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#239One of my favorite quotes is attributed to Saint Augustine: "If two friends ask you to judge a dispute, don't accept, because you will lose one friend; on the other hand, if two strangers come with the same request, accept, because you will gain one friend." It sort of applies, here, as well.
Years back a coworker and I were having a small interpersonal disagreement. My supervisor declined to get involved, basically told us to sort it out without wasting work time. It wasn’t anything serious enough to involve HR (in my eyes anyway), but I spent a solid while annoyed with this response. It took me a solid five years to realize he had made the right overall decision. He had not played favorites, did not bur…
That’s very PC, but there’s a fine line between that and not showing leadership. What good is a leader who doesn’t standup for what’s right? That’s annoying for the person who is right
Re: Ask HN: Those who've joined a friend's startup as an employee, how did that go?
#240Earlier quoted context omitted.
> Or friend was trying to put you in your employee place (where you had to meet his process), or otherwise was getting a bit full of himself, or a bit sleep-deprived and nutty? This would be a strange take. CEO shouldn't be letting people in on the nod. If hiring is someone else's job, CEO shouldn't be overriding. At best suggesting candidates but saying that it's totally the hiring manager's call. If a candidate did…
The purpose of a hiring process (as in take home assignment) is to see that the person is competent to do the job. It was already established that he was. So following a formal process is a stupid waste of time (on both ends) that has nothing to do with strengthening the company and is simply an unnecessary ego trip. The company disqualified itself.
How was it established?