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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?

#811

Post by Eridrus »

rgossiaux wrote: post #656
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…

I don't quite understand. On the one hand you're saying that early employees should "demand market comp" and on the other you're saying that equity basically doesn't matter (and if you feel this way, it doesn't really make any sense to be joining a startup anyway). Are you conflating "compensation" with "salary"? "Market comp" for a good engineer with several years of experience in the Bay Area is something like 250k…

> Early-stage companies should offer sufficient equity such that their employees should in expectation earn at least the same as they would at a public company.

This would still be underpaying people for a few reasons: expectations are not risk-adjusted, it also doesn't take into account the timeline you get paid on, i.e. the ROI you would get investing your Google salary in an index fund and taxes make getting paid a regular amount over time more valuable than getting a large startup check.

Maybe you were taking these factors into account, but most startup equity offers are massive low balls.

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

#812

Post by icedchai »

DogOnTheWeb wrote: post #231
swyx wrote: post #212

Earlier quoted context omitted.

> $800 million dollar startups die all the time is this the case? i actually don't know that it is.

(Sample size of one) I worked at a unicorn startup five years ago in the bay which no longer exists. Anyone who bought the options -- and the company was very cagey on providing cap table info -- was left with nothing.

Worthless, or nearly worthless, options are very, very common. The last options I exercised and did get paid out... but in the end, I didn't even make back enough to make up for the pay cut I took. Financially, I would've been better off taking a different job. At least I "had fun' and "got something" though.

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

#813

Post by pm90 »

Cofike wrote: post #631
pm90 wrote: post #576

Earlier quoted context omitted.

No you absolutely won't, unless you luck out and end up on a good team. Big companies are notoriously bad about rewarding hard working and talented engineers. That is in fact one of the main reasons people leave them (including yours truly).

If startups don't reward engineers and neither do big companies, then what does?

I'm just pointing out that its not absolute. So in general I recommend being open to switching jobs/companies until you find and environment that you personally find enriching, both professionally and financially.

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

#814

Post by burlesona »

nunez wrote: post #290
neutrino7 wrote: post #224

Earlier quoted context omitted.

> But the Big5 have tons of locations Name one Big5 job in the entire U.S. south. Or at least one that pays as well as them. There aren’t any.

Facebook is in Austin; Amazon is in Dallas

Austin isn’t the south.

Raleigh / Durham probably is the best tech scene in the south. No mega companies but a good number of second tier, ie. Redhat, Sas, Epic, and so on

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

#815

Post by dontjoin »

dojoin wrote: post #798
dontjoin wrote: post #795

I joined a startup 5 years ago as a CTO for 10% equity. Fast forward 5 years. We merged with another company and we got 60% out of that merge. So then I moved to 6% equity. Then we raised $15m in various rounds. My equity is now at about 3%. In our last round we were valued at $20m. Well, all the investors have preferential pay back rights. My equity is fully vested. If we sell for $20m today I will make a grand tota…

I had the opposite experience. I also joined a startup 5 years ago, and I was one of the very early employees. I received 0.5% equity as stock options, and my salary was around $120,000. I stayed for a few years, and now I own around 0.1%. The company is now worth a few billion dollars, so my stock is worth a few million dollars. I have no liquidity yet, but an IPO is certainly on the horizon. I don't feel like I too…

Don't take this the wrong way, but you are living in a world of confirmation bias.

There are 288 companies in the world with a valuation of > $1b [1].

There is most likely over 100 million companies in the world [2].

With these numbers in mind you will have a 0.000288% chance of joining a unicorn.

Except, 50% of all new business fail within five years [3].

So, you will have a 0.000144% chance of joining a unicorn.

My company is doing well (approaching $4m revenue). I have already hugely defied the odds. I am one of the sucessfull ones. My return for a 5 year investment will be $600k at best. My story is a VERY common one. Yours is impossibly uncommon.

> My advice: If you can somehow spot a potential unicorn and you'll be one of the first employees, then drop everything and join it.

The advice you are giving is for people to drop everything for a snowball's chance in hell.

[1] https://www.weforum.org/agenda/2016/06/unicorns-do-exist-and...

[2] https://www.quora.com/How-many-companies-exist-in-the-world

[3] https://www.inc.com/thomas-koulopoulos/5-of-the-most-surpris...

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

#817

Post by acconrad »

evancharles wrote: post #738
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

I vaguely remember reading that article while I was at said company making basically the same salary (with the same company valuation at the time) and realizing my equity was far below that and scratching my head.

If I had PG's recommended equity instead of what I had I would have gone from neutral EV to basically pay-off-my-house money. Like I said, it's things like these that make me never want to work for a startup again and only come in as a founder.

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

#818

Post by dazhbog »

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…

Thank you for your comment. I am a founder currently deciding how much equity to give to our beloved first engineer. Any tips are welcome!

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

#819

Post by acconrad »

dazhbog wrote: post #818
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…

Thank you for your comment. I am a founder currently deciding how much equity to give to our beloved first engineer. Any tips are welcome!

PGs comments on equity resonate with me, and actually align with what I would have wanted. One of the replies to my original comment actually has the article.

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

#820

Post by acconrad »

alfredallan1 wrote: post #640
acconrad wrote: post #568

Earlier quoted context omitted.

Most companies don't give 50% raises when you finally raise money (which is to say, most companies won't simply bring you up to market if you came in super early).

No, but if you came in super early, wouldn’t you have (negotiated at the start) more equity anyways? A super early employee with decent equity ought to be treated as a late stage founder - so if the founders don’t take 50% raises, neither should the super early employee with decent equity. It would of course be silly for someone super early to not negotiate significantly more equity than the usual couple of basis poi…

> If the founders don’t take 50% raises, neither should the super early employee with decent equity.

You're missing the point of my original post. If a founder owns x100 the equity, why should an early employee be bound to the same salary restrictions?

If anything, since I have 1/100th the equity, that means I should be able to get a multiple of some raise when series A comes through.

Remember, equity is a lottery ticket (especially for an employee). If you're a founder, even if your startup fails, you can get a job as a highly-paid EIR or your founder reputation will allow you to join some other startup in a high level role (VP, Director, etc). This does not apply for engineer/employee #1.

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