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

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

#731

Post by goatherders »

dunpeal wrote: post #659
anonu wrote: post #654

Earlier quoted context omitted.

> Be a founder, even if you have no experience. Easier said than done. Lots of people leave school without the faintest clue what they want to do. Getting a job somewhere gives people training and experience and maybe even credibility before they strike it out on their own.

> Easier said than done. Lots of people leave school without the faintest clue what they want to do. The rest of the startup game - building a product, pivoting correctly, building a team, overcoming oowerful rivals - is such a huge challenge, that gaining entry level experience before finishing school is perhaps the most straightforward piece of the puzzle.

  Anyone can start a business, and anyone should.  The things you mentioned - "pivoting" "overcoming powerful rivals" - goodness.  How about simply starting a business that earns more money then it spends. Do that and you will learn most any lesson you need to know about being a "founder."

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

#732

Post by colechristensen »

hox wrote: post #484
colechristensen wrote: post #475

Earlier quoted context omitted.

A startup is a good place to accelerate yourself to an L5 somewhere else. If you are on a team of n 1000.

True in some regards, but it’s also incredibly easy to learn how to do things the wrong way, if you have no one to learn from.

I guess I might phrase it something like, if you're going to make L5 it is probably the result of excessive competence. If that is you, you will get their faster cutting your teeth in at least a few different startups. Develop judgement and a variety of experiences.

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

#733

Post by dunpeal »

goatherders wrote: post #730
dunpeal wrote: post #705

Earlier quoted context omitted.

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 $…

If its worth 100 million it isnt a startup.

Hm? Plenty of startups have current valuation over $100m.

However, I just chose this number because it is nice and round so the math is obvious.

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

#734

Post by caspercrf »

dorfsmay wrote: post #677
chillee wrote: post #511

Earlier quoted context omitted.

The Foobar coding challenge seems to work really for Google, for whatever reason. Go to Google and search "python list comprehension" in a bunch of different tabs. Make sure it's exactly that. If you have an extra 's', or if you do "list comprehension python", it's not gonna work. If you go through the first 3 levels, then they'll ask you to send in a resume. Admittedly, I only know results from the perspective of st…

In 2018, this is kind of sad, judicious combinations of generator expressions and list comprehensions is so much more interesting (use lazy and eager evaluation where it matters)! Anyway, I did that search in 20 tabs and didn't get anything.

Start closing them pretty fast and this will pop up.

https://imgur.com/a/XMt7PAq

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

#735

Post by kentonv »

dunpeal wrote: post #723
kentonv wrote: post #716

Earlier quoted context omitted.

> 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 f…

> You can grant equity out of the option pool, which you defined in collaboration with your investors. Obviously I'm simplifying here, but overall yes, it's far easier for a startup to give equity than cash, for the reasons I mentioned. Especially if I'm an early stage startup, maybe after a small seed round, I will surely have enough options in the pool, or investors lenient enough to let me issue these extra stock…

> I will surely have enough options in the pool,

At a $6M seed stage valuation, 1% in equity (vesting over four years) is worth the same as $15k in salary.*

Which is harder for a founder to authorize, 1% in equity or $15k in base salary? Honestly $15k salary sounds a whole lot easier and cheaper to me.

$105k in salary converts to 7% in equity. So if you want to hire than $400k Googler you're going to be paying them $200k salary and 14% equity.

An entire option pool is typically 20% or less.

The only reason giving away equity seems so much easier than cash is because you can trick people into taking far less of it.

* Disregarding the fact that the valuation is based on preferred shares while the equity grant is common shares, which only makes the equity grant even more worthless.

> So you know how unrealistic it is to raise VC rounds just to support salaries for a handful of new engineering hires.

That's literally the entire point of raising a VC round?

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

#736

Post by ykler »

It sounds like a lot of the criticism is that employees don't get enough compensation or don't get it quickly enough. With options, the variance is too high, since even companies that raise a lot may fail, and liquidity takes a long time. Plus, if the shares are voting, founders have to give up some control. I guess the variance will always be higher than many employees would prefer (at least not considering schemes that share risk among multiple startups), but how about something like the following for mitigating the concerns people are raising?

The company commits that some percentage of each month's revenue will be immediately set aside for existing employees (to a first approximation, split equally between them). Crucially, any investment should be counted as revenue for this purpose, since early-stage startups often get major investment before major revenue. Ideally the percentage should be something big, like ten.

To encourage employees to stay, the revenue will be paid out to them over a period of years, similarly to how options take time to vest. A detail to be worked out is what to do with any money that isn't paid out because the employee leaves. (Maybe just return it to the company, though that could give companies an incentive to get rid of employees after a major funding.)

The company should be able to revise this commitment but not without a warning period of, say, half the period over which compensation is paid out to employees.

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

#737

Post by joejerryronnie »

alfredallan1 wrote: post #641
dmode wrote: post #114

Earlier quoted context omitted.

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.

Make a reasonable estimate - what do you think is the total number of people earning in the range of 400K at FAANGMUA? How about in terms of percentage of engineering staff? Do bear in mind that it takes almost 10 years of steady relevant experience to get to that level (L5+). As another commenter points out, 8 years of solid experince only made an L4.

Here's how I've seen it work, and this is specifically relevant to Bay Area compensation (although it prob works the same in other markets, just scaled down). You come into either one of:

- top tech company (i.e. FAANG)

- high growth, public, mid-sized tech company (e.g. top enterprise cloud companies)

Your base salary will be between maybe $130K - $160K. And not just for engineers, technical product/program/project managers make this as well. Your bonus will be 15-20% of your base, so another $20-30K, bringing your total comp minus RSUs to $150-200K. Your first RSU grant will prob be worth $100K per year once you start vesting. If you are a top 20% performer, you will get another grant within the next year or two.

After you've been at the company for three or so years, you will have multiple RSU grants starting to vest. Once you stack these RSU grants on top of each other, your total comp can easily reach $400K for some period of time.

A couple of caveats/risks with this comp structure

- it seems companies are much more willing to throw more RSU's at you than a significant base salary increase.

- as long as the markets are rewarding growth vs profitability, the RSU's will continue to flow

- if the market crashes, the whole comp structure may crumble.

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

#738

Post by evancharles »

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…

Interestingly YC has encouraged startups to offer more equity to early employees and I'm not sure it's had an effect. See pg's recommendation in http://paulgraham.com/equity.html

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

#739

Post by kentonv »

goatherders wrote: post #728
kentonv wrote: post #690

Earlier quoted context omitted.

> Sometimes they need employees before they can pay market rate, But you don't get to have something just because you need it. That's not how it works. You need to raise more money, so that you can afford to pay the employees. 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. > giving out 0.01% even to earliest employees…

"You dont get something just because you need it" Huge applause. "You need to raise more money" Crowd falls silent. How about trying to sell something and generate revenue. I long ago stopped subscribing to Startup Porn but I remain baffled as to how seemingly smart people are so intoxicated by it that the notion of building an actual business is an afterthought.

Well yes. But the premise here was that in order to generate that revenue you need the employee. If you don't need the employee then by all means don't hire the employee (and don't raise money to hire them).

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

#740

Post by hobofan »

anonu wrote: post #654
bittcto wrote: post #635

Earlier quoted context omitted.

TLDR: 30 years experience, I learned: don’t go work for a SV style startup. Be a founder, even if you have no experience. Don’t take VC money for more than %10 of your equity in total. Better off, right out of school, founding a company and failing than working for a startup, especially if they take VC. It’s lopsided against the founders too. They might walk away with big checks but the risk is too high. This is the…

> Be a founder, even if you have no experience. Easier said than done. Lots of people leave school without the faintest clue what they want to do. Getting a job somewhere gives people training and experience and maybe even credibility before they strike it out on their own.

Me and my previous co-founder founded a startup with both of us having no experience. It was a very bad decision for the company, but extremely valuable for our personal growth. It also allowed us to skip the biggest parts of the usual career ladder.

It's certainly not the best route for everyone, but definitely one worth considering.

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