I Don’t Care How Well You Code, Understand Your Compensation
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Re: I Don’t Care How Well You Code, Understand Your Compensation
#2I don't understand most of the financial terms used in this article. Where do I start?
Re: I Don’t Care How Well You Code, Understand Your Compensation
#3I don't understand most of the financial terms used in this article. Where do I start?
Eh, the gist is employees take on very little risk. We get paid every two weeks up to layoff or retirement. It's different when you are looking for investors.
Re: I Don’t Care How Well You Code, Understand Your Compensation
#4I don't understand most of the financial terms used in this article. Where do I start?
Eh, the gist is employees take on very little risk. We get paid every two weeks up to layoff or retirement. It's different when you are looking for investors.
I read it as; if you take shares instead of your marketvalue in cash then you need to understand what you are doing. A lot of people do not.
Term sheets and contracts by investors usually contain things that benefits only them, especially when the company does not work as expected.
Re: I Don’t Care How Well You Code, Understand Your Compensation
#5Earlier quoted context omitted.
Eh, the gist is employees take on very little risk. We get paid every two weeks up to layoff or retirement. It's different when you are looking for investors.
I read it as; if you take shares instead of your marketvalue in cash then you need to understand what you are doing. A lot of people do not. Term sheets and contracts by investors usually contain things that benefits only them, especially when the company does not work as expected.
This was my take, and I'm pretty sure I belong to the group that does not.
Re: I Don’t Care How Well You Code, Understand Your Compensation
#6It's really quite simple: you assume it's all worthless, because that's how it starts and that's how it generally ends. Even if it were going to be worth something, you'd have been better off taking the money up front and investing it however you wanted in the meantime.
But it doesn't really matter, because you have no control over this anyway. All you have to do is decide whether the salary is high enough; the rest is irrelevant.
Some people really enjoy playing the lottery. If that's you, well, knock yourself out getting into the details of the options package! Just don't kid yourself or make any serious life plans based on your hopes about that stuff.
Re: I Don’t Care How Well You Code, Understand Your Compensation
#7> So talk to the CFO about the numbers — when you’re hired, when it’s fundraising time, and any time in between.
Hahahaha, oh man so here's the part where I just dump all my emails about the answers I have gotten back from CFOs over the last decade:
- "common stock shareholders aren't privy to financial details"
- "we don't share that information"
- "I discussed it with the board [consisting of myself] and they decided not to release valuation information"
- "The stock options are just to retain employees!" and other awkward non-sequiturs that are distinctly not a financial statement.
So do ya'll want to unionize or nah, I have a feeling Peter Thiel and Andreesen would totally support it and we already make enough to make union dues negligible.
Re: I Don’t Care How Well You Code, Understand Your Compensation
#8I don't understand most of the financial terms used in this article. Where do I start?
The basic thing to understand is the concept of "dilution". Companies can issue new stock in exchange for new investment funding, driving down the value of existing stock. Sizable dilution is rare in publicly held companies, but common in privately held ones. There are often contractual terms which protect some parties against dilution. Founders and early stage investors may be protected, while other employees are not. Sometimes founders don't have anti-dilution protection.
For an overview, see [1].
This is historically unusual. Up to the last decade, companies tended to become profitable and go public much earlier. Now we have round after round of private financing going into money-losing companies to fuel rapid growth, in hopes that, somehow, they'll dominate the industry and make the money back someday.
That may not happen. Twitter won on market share and still can't make money. Uber may be next.
[1] https://techcrunch.com/2011/10/13/understanding-how-dilution...
Re: I Don’t Care How Well You Code, Understand Your Compensation
#9> one of the reasons I chose to work on Wall Street prior to joining a start-up was to fully grasp the financing terms of the companies for which I would later work.
And this is also the reason why I'm very wary about equity. I'd certainly want to work for a company that's going to do well financially, regardless of how I'm being compensated, but I have only a layman's understanding of business and finance. I'm simply not equipped to judge the financial health of a potential employer and how much its equity is really worth.
Re: I Don’t Care How Well You Code, Understand Your Compensation
#10Forget about equity, at least get the salary part right. Keep interviewing to check how much the market is willing to pay you and you will be surprised to know that "loyalty" does not pay much in America unless the employer is willing to offer you substantial amount of money to spend like 4 years at the company.