Ask HN: Pros and cons of working at a startup in 2018? • Hacker News Board

Re: Ask HN: Pros and cons of working at a startup in 2018?

#711

Post by joshuamorton » Tue, Jun 12, 2018, 6:11 AM UTC

tedsanders wrote: post #670

dunpeal wrote: post #666

Earlier quoted context omitted.

> What evidence do you have that significantly more than 10% of engineers earn more than $400K? What evidence do you have to the contrary? Compensation data isn't typically shared openly. Well-paid engineers have no reason to share their pay figures and create animosity or worse problems.

I have no strong evidence to the contrary. I'm trying to learn the truth. The previous commenter made claims about the distribution of comp. No doubt they had reasons for believing that claim. I want to know their reasons so I can update my own beliefs. I have made no claims so I don't understand why you are asking me for the answer. I'm trying to learn the answer! :)

Beyond "I work at one", there's not much I'm willing to share, but suffice to say that when the majority of the people who work at these companies are saying something, perhaps they have reason to believe it is true.

There are also past threads on reddit and hacker news which include anecdata that points to such compensation being reasonably common, but again that requires believing anonymous internet people.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#712

Post by angersock » Tue, Jun 12, 2018, 6:13 AM UTC

kentonv wrote: post #633

As a former startup founder, I tend to agree that most startups are low-balling early employees. These employees over-value their stock by imagining what it would be worth if the company reaches $1B valuation. It really is a lottery ticket. But in my opinion, the answer is more pay, not more equity. Employees should get market comp, period. Doesn't matter how early-stage the startup is. If a founder can't afford empl…

Frankly, the early employees often build more of the company and its success than the founders do.

They should be rewarded proportionate to the growth they create and catalyze.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#713

Post by dunpeal » Tue, Jun 12, 2018, 6:14 AM UTC

cobookman wrote: post #703

gregcrv wrote: post #696

Earlier quoted context omitted.

How do you explain these numbers? http://www.h1bdata.info/index.php?em=&job=Senior+Software+En...

H1b data doesn't include rsu or bonus. Many are getting 16-17% bonus and ~50-150k/year in rsu.

For a staff engineer, I'd say even $150k is very low. Even for an H1B, I'd guess $200k/year at least in additional pay beyond the base salary.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#714

Post by inimino » Tue, Jun 12, 2018, 6:14 AM UTC

dunpeal wrote: post #705

inimino wrote: post #694

Earlier quoted context omitted.

> Give them a realistic estimate of the risk they're taking, and the value they can get. Herein lies the problem. Founders are uniquely well-placed to evaluate the risk, and uniquely psychologically motivated to evaluate optimistically. Because of that, founders sell equity dear. If the generous equity offer is reasonable, then would be reasonable to make two offers, one with only cash and one with generous equity, i…

Again, you make it seem very cut and dry. It's not. Suppose my startup is current worth $100m. According to you, I should be able to sell 0.5% of it for $500k and give that to the employee, or offer them that 0.5% directly, right? Well, no. I can definitely offer them that 0.5% since I control the equity, but I can't just go to a VC and tell them "hey, here's 0.5% of my shares, now give me their fair value worth of $…

Yes, I'm eliding a lot of complexity, in that you can't just take the equity and sell it to the bank or to your VCs. However, you as a founder have some control over how much you raise and at what valuation. So the fact that you can't make that decision at the time of hiring is certainly true, but you are making those decisions when you decide to raise a round (or not).

That's why I restricted my final remark to companies that have taken funding. Of course there are a lot more moving parts than I let on, but if a company has taken funding and would rather keep their funding than their equity, then it makes sense to think carefully about why that is before buying that equity with, potentially, years of your irreplaceable life.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#715

Post by cobookman » Tue, Jun 12, 2018, 6:16 AM UTC

dmode wrote: post #114

ryandrake wrote: post #57

Earlier quoted context omitted.

Take that view with a huge grain of salt. Nobody is denying that someone, somewhere is making $400k as a software engineer, but we are talking outlier employees at outlier companies. You’re not getting this as a medium level rank and file engineer, or at a non-FAANG company. This whole “software engineers make $400k” trope seems to have taken on a life of its own. Every time salary comes up here, these guys come out…

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'm looking at a Google internal self reported income form. Large majority make less than 400k.

There's more l3 & l4 employees that. L5. And way less l6/l7 than l5.

Also Uber and Airbnb don't offer liquid rsu. Nobody knows their ipo price and ipo valuation.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#716

Post by kentonv » Tue, Jun 12, 2018, 6:17 AM UTC

dunpeal wrote: post #705

inimino wrote: post #694

Earlier quoted context omitted.

> Give them a realistic estimate of the risk they're taking, and the value they can get. Herein lies the problem. Founders are uniquely well-placed to evaluate the risk, and uniquely psychologically motivated to evaluate optimistically. Because of that, founders sell equity dear. If the generous equity offer is reasonable, then would be reasonable to make two offers, one with only cash and one with generous equity, i…

Again, you make it seem very cut and dry. It's not. Suppose my startup is current worth $100m. According to you, I should be able to sell 0.5% of it for $500k and give that to the employee, or offer them that 0.5% directly, right? Well, no. I can definitely offer them that 0.5% since I control the equity, but I can't just go to a VC and tell them "hey, here's 0.5% of my shares, now give me their fair value worth of $…

> Suppose my startup is current worth $100m.

Then you're way beyond the stage any of this conversation is about... But let's say you said a smaller number.

> Well, no. I can definitely offer them that 0.5% since I control the equity,

... no you can't. You can grant equity out of the option pool, which you defined in collaboration with your investors. If you want to grow the pool you're going to have to talk to them first. You don't have free reign to dilute the investors away at will.

> but I can't just go to a VC and tell them "hey, here's 0.5% of my shares, now give me their fair value worth of $500k".

Well sure, not on a daily basis. You have to raise a round of funding, obviously. Hopefully you don't do that too often, but when you do, you make sure to raise enough to pay your employees a fair salary until the next round.

If you can't raise a round of funding, then your stock is worth nothing and the employee should consider it to be worth nothing.

> Ever been close to a startup raising money from VCs?

I have raised money from VCs.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#717

Post by dunpeal » Tue, Jun 12, 2018, 6:17 AM UTC

kentonv wrote: post #710

dunpeal wrote: post #699

Earlier quoted context omitted.

> It's not fair to make the employees act as unofficial investors in your company, and then give them a deal that the real investors wouldn't accept. Which is why I'm saying they should be offered a deal that investors would accept. Demanding everyone pay market rate is just unrealistic. Never going to happen. I'm proposing a realistic, possible change. > I hope that's an exaggeration and no one actually goes that lo…

> Which is why I'm saying they should be offered a deal that investors would accept. > Demanding everyone pay market rate is just unrealistic. But they're the same thing! If investors would accept it, then you could just as easily have the investors buy the equity, and then pay the employee with it. So if it's totally unrealistic that founders would actually pay market, how could it be realistic that they'd offer equ…

> But they're the same thing! If investors would accept it, then you could just as easily have the investors buy the equity, and then pay the employee with it.

See my [response to inimino](https://news.ycombinator.com/item?id=17291045). It's absolutely not the case that if I have $100m worth of stock according to some valuation, I can just go out and sell any amount of that for what you'd expect based on the valuation.

VCs are the only ones who are generally ready to buy this sort of equity, and raising money from them is a long difficult process, and I can't just decide I'm going to sell 0.5%, get $500k, and pay that to a new employee.

Finding a non-VC to buy your equity is very difficult too.

> That's not an early-stage startup, that's a company with >200 employees and a valuation in the hundreds of millions.

Like I said, it's the first random ad I clicked. Last I looked at Angel List, there were tons of startups offering 0.01-0.05% equity.

Also, notice they're offering this 0.01% with a maximum salary of 130k in SF who is skilled with "Python, Java, Scala, Ruby on Rails, React.js":

https://angel.co/everlane/jobs/306986-software-engineer

That's way below market.

> That's not an early-stage startup, that's a company with >200 employees and a valuation in the hundreds of millions.

Do you have any idea how many startups were worth >100m at one point or another on paper, and ended up with an exit where nobody but the VCs made any money due to stock preference? One down round is enough to effectively wipe out most of the rank-and-file equity in these scenarios.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#718

Post by didibus » Tue, Jun 12, 2018, 6:19 AM UTC

neutrino7 wrote: post #303

nunez wrote: post #290

Earlier quoted context omitted.

Facebook is in Austin; Amazon is in Dallas

Ok, so Texas is technically in the South... you got me. I suppose I should have clarified: major southeastern cities (Atlanta, Charlotte, Raleigh, D.C., Nashville, Miami)

Apple and Amazon could end up choosing Raleigh for their HQ2. So maybe that'll soon change.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#719

Post by nojvek » Tue, Jun 12, 2018, 6:23 AM UTC

grosjona wrote: post #708

acconrad wrote: post #129

I was the first engineer at a TechStars startup that did have a successful exit (I was there about 5 years before the exit). If there is something I want YC to know, it's this: You helped create the culture of founder empowerment. You have the power to evolve that narrative to those that sacrifice as early employees. Tell the world that early employees deserve a lot more equity. Tell the world that early employees co…

I agree. There is a culture that founders are special but everyone else is replaceable which makes it self-fulfilling. If a founder leaves, it's bad and VCs won't invest in the startup - However, if a top engineer leaves, no big deal, they're only an engineer... For me personally, I have a really bad perception of incubators, venture capitalists and big tech corporations. It's all a zero sum game to increase concentr…

Working at a startup and I feel you a 100%. Won’t name the startup but it seems we’re doing better after CEO-founder left.

Re: Ask HN: Pros and cons of working at a startup in 2018?

#720

Post by Robin_Message » Tue, Jun 12, 2018, 6:23 AM UTC

I dunno how possible this is legally, but one thing YC could do is create a pool of equity of all the startups in a batch which employees could be granted options in.

Investors diversify, and founders own a disproportionate share of their companies (because they take the largest risks, but even so), but early employees are locked in for years with no chance to diversify.

So a shared pool would let early employees diversify their (time) investment.