Ask HN: Joining a Late Series Startup in SV. Please Help

Hey HN,

I came across this thread - https://news.ycombinator.com/item?id=19624164 and after reading the horror stories I am really in a fix whether this is a step in the right direction.

I cant reveal more details but here are a few things.

1. The startup is an interesting space and ARR of $XX millions.

2. There are backed by very good SV VC`s who have a good track record of ensuring companies go public.

3. I will be in a position to declutter the tech stack/work on a couple of new exciting products and potential room for growth is good.

4. I have had a couple of meetings with the execs; I am impressed with their track record and everyone seems genuine and honest.

I am taking a pay cut to join the company and I would have to spend > $100K to exercise my options at the joining date which I am told is the best way to avoid AMT and has other tax benefits if the company were to grow exponentially in the next years.

I would have a take a decent chunk of money out of my savings to pay this amount, my question is what risk factors should I consider; Usually people only talk about the negative experiences, so please give me a reality check both good/bad;

Thanks!

There's 1 year cliff for vesting but apparently one can excercise at the current strike price on day one and that's pretty common among other startups with folks who want to avoid the AMT

It's "83(b) election." It's interesting a late stage startup is offering this. But do NOT do it.

Do this only for very early stage startups where your total expense might be a few thousand dollars for maybe 1% or more of the startup. At most, you lose a few thousand dollars.

Spending $100K to optimize possible future taxes is a bad idea. At this stage, you should just think that future AMT is a good problem to have. Put the $100K in safer instruments.

So yellow/red flags:

1. ARR in the XX mil, but you are taking a pay cut?

2. You will declutter the tech stack and work on exciting products?. Usually in a startup (or any other company) - you touched it, you own it. So once you declutter the tech stack, I am not sure that you will have time to work on the other exciting projects (or even if they will still be relevant).

3. Why do you even need to declutter the tech stack? what happen to the original programmers? what happen to proper process? do they have unit tests? CI/CD? Can you sandbox this code in a micro service and just call it?

4. The option thing looks like they are increasing your switching cost. I.e. once you buy the options than you will be limited in your moves both inside and outside the company.

So the manager can be honest, but it is usually not even his call. The company will likely to put a lot of value on the maintenance side (which bring the money) and less on new projects (which get postponed if there are any issues in the maintenance side).

I do not think that the manager is lying to you. TODAY he see it as 50/50. But what happen if the cluttered project is late? What happen if there is a need for new features in the cluttered project. I would accept the job only if you are ok staying in the cluttered project team for at least a year or two.