Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: What HN threads most influenced your thinking about startups?

news.ycombinator.com

Post reply on HN
Print view View original

31–40 of 50 posts

Re: Ask HN: What HN threads most influenced your thinking about startups?

#31

Post by Sohcahtoa82 »

claudiulodro wrote: post #12

This question I asked when YC company Amplitude went public a little while back: https://news.ycombinator.com/item?id=28700409 It confirmed that these days if a startup is successful the founder gets almost all of the reward, the first handful of engineers get a few million bucks, and the thousand+ people that follow simply get a regular salary. There are only two real paths to wealth in tech nowadays: start your own…

I joined a startup a few months ago, and yeah...I don't know what my stock options are potentially worth.

I can buy 20,000 shares at $3/share over 4 years. We got a second round of VC funding in Spring with a valuation of $250M. Let's say in 5 years, we go public, I had exercised all my options, and we end up being worth $25B. Would that mean the $60,000 I spent on shares would be worth $6M?

Would another round of VC funding affect this?

Or is there more information needed that I don't know and might not have access to?

Re: Ask HN: What HN threads most influenced your thinking about startups?

#32

Post by Sohcahtoa82 »

arduinomancer wrote: post #18
snarkypixel wrote: post #7

The one that said "Dropbox will never work because I can do the same thing with rsync"

There are lots of comments like that on HN every day. I feel like a lot of them are just people who see something getting praise and need to put it down to make themselves feel better. Seeing other people be clever somehow threatens them.

I think it's more a matter of a lot of HN users living in an echo chamber and not realizing that the extreme majority of the population is non-technical.

Good luck guiding grandma through setting up rsync.

Re: Ask HN: What HN threads most influenced your thinking about startups?

#33

Post by DerekBickerton »

andrewxhonson wrote: post #14
DerekBickerton wrote: post #5

I recall many threads of where a product/service/startup got shut down / closed its doors. It's ironic because sometimes it's my first time hearing about that product/service/startup, and I often ask: 'Why didn't I know about that earlier?'. Turns out it's just as well I didn't hear of it before because they're no longer sustainable or operational in the long run. This is why I only concern myself with 'stayups' or p…

Out of curiosity, did you come up with 'stayup' or where did you come across it? I'm really liking it.

I recall some article from years ago mentioning it. I didn't coin it. One has to ask: where do all the startups 'end up'?

Re: Ask HN: What HN threads most influenced your thinking about startups?

#35

Post by elwell »

AYBABTME wrote: post #30
hedgehog0 wrote: post #24

What I Wish I'd Known About Equity Before Joining a Unicorn https://news.ycombinator.com/item?id=13426494

I've seen a lot of people lose a lot of money because they bought into the "value the equity at zero" mentality. It sure sounds great and edgy to be blasé and just take your pay, but if that was true, you'd be better off working at FAANG 99% of the time. IMO if you work for a startup company, you should only do so because you believe in it, and if you believe in it, you should exercise your option as fast as you can,…

Sorry if this is a dumb question, but why would you want to exercise your options as fast as you can?

Re: Ask HN: What HN threads most influenced your thinking about startups?

#36

Post by nosefrog »

elwell wrote: post #35
AYBABTME wrote: post #30

Earlier quoted context omitted.

I've seen a lot of people lose a lot of money because they bought into the "value the equity at zero" mentality. It sure sounds great and edgy to be blasé and just take your pay, but if that was true, you'd be better off working at FAANG 99% of the time. IMO if you work for a startup company, you should only do so because you believe in it, and if you believe in it, you should exercise your option as fast as you can,…

Sorry if this is a dumb question, but why would you want to exercise your options as fast as you can?

You pay less in taxes if the options are valued for less, which they usually are the earlier you exercise them.

Re: Ask HN: What HN threads most influenced your thinking about startups?

#37

Post by AYBABTME »

elwell wrote: post #35
AYBABTME wrote: post #30

Earlier quoted context omitted.

I've seen a lot of people lose a lot of money because they bought into the "value the equity at zero" mentality. It sure sounds great and edgy to be blasé and just take your pay, but if that was true, you'd be better off working at FAANG 99% of the time. IMO if you work for a startup company, you should only do so because you believe in it, and if you believe in it, you should exercise your option as fast as you can,…

Sorry if this is a dumb question, but why would you want to exercise your options as fast as you can?

Lower tax bill, as you need to pay taxes on assumed gain when you exercise your options, based on the latest 409a valuation of each share. The lowest such valuation in a startup is usually early in its life, and during your tenure, the valuation should go up steadily (or something's horribly wrong with the company's business) and thus your cost to exercise increases over time.

Another reason is more practical: it's much easier to exercise your options when the tax bill is lower and you just got a job/while you're employed (i.e. you're more plush with money), than when you're quitting/been fired and have 90 days to figure out where to get money from. Basically, it's better to be in control of when you buy, than being forced to buy or lose out.

Re: Ask HN: What HN threads most influenced your thinking about startups?

#38

Post by rfrey »

elwell wrote: post #35
AYBABTME wrote: post #30

Earlier quoted context omitted.

I've seen a lot of people lose a lot of money because they bought into the "value the equity at zero" mentality. It sure sounds great and edgy to be blasé and just take your pay, but if that was true, you'd be better off working at FAANG 99% of the time. IMO if you work for a startup company, you should only do so because you believe in it, and if you believe in it, you should exercise your option as fast as you can,…

Sorry if this is a dumb question, but why would you want to exercise your options as fast as you can?

1. You pay tax on the difference between the current valuation and your strike price. So if you exercise before new valuation events you save tax dollars, potentially a lot of tax dollars.

2. If the company gets acquired there are several mechanisms founders and investors use to wipe out options holders. It is harder to wipe out common stock owners. If an acquisition event takes you by surprise you may not have time to exercise.

3. You may get laid off, decide to quit, or get fired, and have only a limited time (3 months, often) to exercise your options. That might be a bad time for you to spend the case, so you may want to do it now while you are in a better position to do so.

Re: Ask HN: What HN threads most influenced your thinking about startups?

#39

Post by narven »

sergiotapia wrote: post #13
mmmmkay wrote: post #9

Earlier quoted context omitted.

got a link to those videos in particular?

Here's one of my favorites. https://www.youtube.com/watch?v=C27RVio2rOs It's really good!

Awesome, love it, can I go back to 2018?

Re: Ask HN: What HN threads most influenced your thinking about startups?

#40

Post by rahimnathwani »

maddynator wrote: post #19
sergiotapia wrote: post #4

Not an HN thread, but HN videos. Particularly Michael Seibel's videos while jogging were very insightful. A lot of what he said in those videos were so obvious after the fact that it's crazy how there are teams that do the polar opposite and fail. I highly encourage you to watch them all.

Yeah a link to that would be great

https://www.startupschool.org/curriculum

https://www.ycombinator.com/library

Post reply on HN