251–260 of 968 posts
I'd like to recommend something: discourage 1-year cliffs in vesting schedules. I recently joined a BigCo where your stock vests monthly as soon as you start. I felt comfortable accepting that offer because I knew I could quit without leaving money on the table if I hated it. Before BigCo, I was at a YC startup for 8 months that I disliked working at, but felt that I needed to hit the 1-year mark for the equity. That…
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This. I joined a moderately successful startup (good acquisition where founders made > $1 m) and the rewards were not worth the risks as an early employee. Also, the RSUs are low risk, high rewards at the "usual suspects". Unless you love working on a small team with more autonomy, but without comfortable resources and losing sleep over whether your company will be there next week, I just don't see the attraction of…
> Why do founders get over 10x early employees? Because founders take at least 100x the risk of an early employee, and 100x the personal risk and commitment. Founders generally aren't getting paid (at least until revenue or significant funding comes through) and they have 100x the impact that an early employee does on the success of the company. If an early employee doesn't work out, the founders just replace that pe…
Simply untrue.
Many early startup employees work intense 12-14 hour days. Are you saying founders work 1,200-1,400 hour days?
Early startup employees also risk about the same as founders. Maybe a little less, financially.
> Founders generally aren't getting paid (at least until revenue or significant funding comes through)
That often happens fast, particularly in markets with well-established, well-oiled VC machines like SV.
Founders usually start out with under market pay, but it's maybe x3-5 under market, not x100 as you imply.
> Early startup employees have higher risk and generally more stress than at established companies, and if the market was rational, they would be compensated more, in cash, to offset this risk and stress.
You're talking about it as if it's some sort of impossibility. There's no natural law that says that early employees must get a fraction of 1% non-preferred shares and almost never make any money from it.
Early employees can and should get a bigger piece of the pie. If they don't, then it's not just something to be wistful about ("if only the market was rational!"), but there will be very real consequences, which we are already seeing: startups won't be able to hire top talent, because the top talent will go to companies that pay it better.
> Equity is not the solution, for many reasons. The biggest reason is that the founders will always value the equity higher than early employees. If not, they should not have founded the company.
So you're telling early employees working 12-14 hour days that they don't value the startup? Irrelevant, unsubstantiated nonsense. "You shouldn't get more equity, you probably don't want it anyway!". If they don't want it, or don't believe in the startup, what are they doing there?!
Just a few cons.... The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp. Equity grants for early…
is the compensation really like this for a mid level engineer at a FAANG? I'm still fairly new into my career and I can't believe that the enterprise money is sooo much better than the startup world. I'm currently earning around 120k a year with health insurance and no equity. Should I really be designing on trading up into a nice big enterprise job?
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I think the core of a "fix" is here. If I were building an engineering org today I'd either go remote-only or build it somewhere which is not SFO/SEA/NYC and friends. An underwhelming bay area compensation package puts you at absolute top-of-market in most European cities. So Y-Combinator can help companies get out of dodge immediately after raising a seed round. For recruiting, warm up a pipeline of talented enginee…
> If I were building an engineering org today I'd either go remote-only There's a reason why so few startups go the remote-only route. How many remote-only startups ended up a success? I can't recall a single remote-only unicorn, for example. > For recruiting, warm up a pipeline of talented engineering managers outside the tiny handful of overheated areas in the US. Finding good engineering talent anywhere is hard. Y…
However, I think economics will increasingly drive the adoption. The price of both devs and real estate is overwhelming in the major US startup hubs.
And while finding great talent is always hard, the difficulty still varies drastically by region. Eight years ago Seattle was a sweet spot with an abundance of great talent priced significantly below the bay area. Seattle's upside has since diminished as everyone and their grandmother set up engineering centers in the area, creating strong competition for talent. Two years ago, I found hiring a solid team in Tel Aviv to be significantly easier than Seattle of the same time period.
One of the nasty barriers to going remote-only is legal. Even if you limit scope to the US, each state you hire in potentially establishes a legal nexus, exposing you to yet another set of tax and employment laws. One way companies attempt to work around this is through contractor relationships, but at both the IRS and state level that doesn't always hold up to scrutiny.
If you go overseas, you also get the accounting headaches of apportioning cost-transfers to the subsidiaries and HR headaches of getting benefits and payroll setup.
But the legal, accounting, HR, and even key-hire pipelines are all things YC can help with given their scale and personal networks.
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FAANG + Microsoft + Uber + Airbnb hire thousands and thousands of engineers in the Valley and Seattle every year. 400K is L5-L6 salary (senior engineer, first level manager). There are a TON of engineers making that money. They are not really outliers, and FAANGMUA is also not really outlier considering Google itself has 80K employees and Amazon and MSFT have over 200K employees.
I think you guys are agreeing with each other, right? L5-L6 isn't "average", is it? Most FAANGMUA employees are not managers/senior engineers.
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You actually get to do something meaningful, at least to the company. vs working at one of the big companies and doing fuck all.
"do something meaningful" I don't see what about the problems YC18 are tackling are any more meaningful than FANG. Can you enlighten us?
You see, after the part your put in quotation marks I added on "at least to the company". This was meant to mean that the work you are doing is meaningful, but perhaps only to the company. Rather than working on a small part of a small part of a small part of the massive machine, you get to work on the entire thing because no one else is around to do it.
I really don't understand why I got downvoted for that. Not sure what part of the HN hivemind I upset with that, seems fairly uncontroversial.
Just a few cons.... The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp. Equity grants for early…
+1 to this. 10 years ago you couldn't make 400K at Google, Facebook, Microsoft, etc. Now you can. Startups made a lot more sense when your opportunity cost was 50-150K per year.
Make it possible at the little guys too. More risk - more equity. What I see now in the Valley is that the series-A guys are offering the same stock (roughly) as the series-D. Just the strike price is an order of magnitude lower. I ever saw pre-IPO startup offering _more_ stock than seed-stage one. This just doesn't make any sense. ISOs are not dollars, their value is multiplied by the risk coefficient. And I feel that founders are somehow lured into thinking that their ISOs are even worth the strike price. Change that and you'll see more people coming to work for startups.
Earlier quoted context omitted.
I think the core of a "fix" is here. If I were building an engineering org today I'd either go remote-only or build it somewhere which is not SFO/SEA/NYC and friends. An underwhelming bay area compensation package puts you at absolute top-of-market in most European cities. So Y-Combinator can help companies get out of dodge immediately after raising a seed round. For recruiting, warm up a pipeline of talented enginee…
YC could do that, but it goes against YC's mantra of the importance of having a team working in the same office of a startup and it being located only in SV. https://blog.samaltman.com/how-to-hire Thats not to say that it is the right policy, but if I were founding a startup I would definitely be looking for remote workers in other locations.