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Startup employees don't earn more
111–120 of 162 posts
Re: Startup employees don't earn more
#112Earlier quoted context omitted.
Because some people enjoy being postal carriers?
Ask any postal carrier if they would take a job that paid $20K more. I guarantee they will say yes. Stop thinking everyone is happy with their job because they have "a good life." Money still rules this world. Why else do people spend 8-10 hours a day trying to make money?
Do you honestly not know anyone who is "overqualified" for their job but happy? I know quite a few.
Have a friend who went to school for business. Realized once he started working in business he absolutely hated it. Took a huge pay cut to work for a non profit. Much happier.
Another person I know spent many years trying several different careers. Got a bachelor's degree, did work studies, job shadowed, got licences. Didn't like any of them. She is happy in food service where she works now.
Re: Startup employees don't earn more
#113Earlier quoted context omitted.
Interesting. If I spent 20% of my salary on lottery tickets, how good would my chances be of winning vs cashing in my stock at a startup that goes public in which I made 20% less salary? And what would the payout differences be?
The startup deal is a much better deal than lottery tickets. If you can get a 1% ownership stake and we assume a 10% chance of a 100 million dollar startup, the expected value of that grant is 100k. The expected value of buying lottery tickets with 20% of your salary is close to zero You should also consider the fact that if you are an early employee in a startup, your future expected payout is at least in part a fun…
Is 10% a reasonable value for that chance? Is 1% a reasonable value for the ownership stake? What about dilution and payout rights?
A reasonable expected value of a lottery ticket is directly computable: jackpot times probability of a winning set. I'm not so sure the same is true for the value of startup employment.
Re: Startup employees don't earn more
#114Earlier quoted context omitted.
The startup deal is a much better deal than lottery tickets. If you can get a 1% ownership stake and we assume a 10% chance of a 100 million dollar startup, the expected value of that grant is 100k. The expected value of buying lottery tickets with 20% of your salary is close to zero You should also consider the fact that if you are an early employee in a startup, your future expected payout is at least in part a fun…
Is 10% a reasonable value for that chance? Is 1% a reasonable value for the ownership stake? What about dilution and payout rights? A reasonable expected value of a lottery ticket is directly computable: jackpot times probability of a winning set. I'm not so sure the same is true for the value of startup employment.
Lottery tickets' jackpot is usually determined in part by sales of tickets for that drawing, and a winning combination wins a divided pot in the case of multiple winners (the probability of which depends again on sales of tickets for that drawing.)
So, no, you can't, at the time of buying a ticket, actually calculate more than a guess of they parameters you cite for determining its expected value.
Re: Startup employees don't earn more
#115If your #1 job criteria is compensation, do not work at a startup. You'll be paid more at big companies. If you don't mind being paid a little less, and want the opportunity to be a part of building a company from the ground up, consider working at a startup. There will be a lot more ups and downs than at a company like Google. But at smaller companies, you'll have the chance to have a material impact on the success…
Your not paid a little less, your paid a lot less, especially as the years go by. For example:
Enter a startup as a sr.eng employee, and you get the same salary that you got working at google. Instead of google equity & bonuses you get startup stock options.
Google gives you $150k/year salary & $100k/year in equity & bonuses for a total of $250k/year.
By entering the startup you have a good chance of losing that $100k/year you gave up because it fails. Over 4 years you have given up +$400k in equity compensation which is about $240k of after tax income. That is almost a quarter million dollars!
If that startup is successful later on, the IPO will likely be about 7+ years out. If the startup is sold in a few years, liquidity is 1-3 years out. That means the investment returns you would of gotten from those savings is also lost.
You should compare your equity grant to possible outcomes with something like this calculator:
https://friendlyoptions.org/#%7B%22numOptions%22%3A250000%2C...
Re: Startup employees don't earn more
#116Earlier quoted context omitted.
In USA and in the rest of the world, $1 million dollars is a shit ton of money. Full stop. Please, let's go back to reality.
Not when you need to pay people 100k/year. They aren't staffing a 7-11.
In the part of the world OP was probably referring to, development companies are like staffing 7-11
Re: Startup employees don't earn more
#117Earlier quoted context omitted.
> To help keep our employees happy (and to be competitive with bigger companies when recruiting), we try to get as close as possible to big-company salaries, we don't expect anything beyond 40 hrs / week, 100% paid health benefits, 401k, 25 paid days off per year, snacks, food, full financial transparency, etc. These sound reasonable. Quick question - has anyone you tried to recruit walk away because you mentioned th…
> has anyone you tried to recruit walk away because you mentioned the 40hr/week expectation? Why would they? Are you imagining somebody who only wants to be part of a team that's overworked?
I have interviewed someone who was getting really tired of his coworkers putting in minimum acceptable effort while he was working very hard; so yes, this person exists.
Re: Startup employees don't earn more
#118Earlier quoted context omitted.
Is 10% a reasonable value for that chance? Is 1% a reasonable value for the ownership stake? What about dilution and payout rights? A reasonable expected value of a lottery ticket is directly computable: jackpot times probability of a winning set. I'm not so sure the same is true for the value of startup employment.
Lottery tickets' jackpot is usually determined in part by sales of tickets for that drawing, and a winning combination wins a divided pot in the case of multiple winners (the probability of which depends again on sales of tickets for that drawing.) So, no, you can't, at the time of buying a ticket, actually calculate more than a guess of they parameters you cite for determining its expected value.
The published jackpot is a very accurate value to use, and the probability of being the sole winner is a very reasonable probability to use. The actual expected value is not going to differ from that product by enough to matter most of the time.
Re: Startup employees don't earn more
#119The thing I wish someone spelled out to me when I started my startup employment journey over ten years ago is that you need to pick the right company. Most startup equity ends up being worthless, so you need to think of yourself as a venture capitalist. Will this company really be the next big thing? Do I believe in them or am I just excited that they want to hire me?
Looking back I wasted far too much time working for companies that I knew deep down were never going to make me money on options and working on projects that I knew were going to fail. I wasted my time and I let these failure companies give me valueless options in place of pay that I would have received working for an established company. Job interviews are bi-directional and everyone tells you that, but it took me wasting many years to understand what that meant.
Re: Startup employees don't earn more
#120This varies greatly from company to company. I would say in startups the pay related issues can have much greater variance than in established companies. The startups that have lots of cash flowing in but have urgent customers often pay well. The startups that haven't yet found a business model probably don't.