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Work at a Startup

workatastartup.org

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Re: Work at a Startup

#21

Post by pg »

sayrer wrote: post #16

This comment will sound a little confrontational, but here it goes. Why would anyone competent enough to work at one of these companies choose that path instead of being a founder?

That's actually a good question. There are several answers. One is that being a founder is not merely a matter of competence. It's also financially risky, and very stressful. So someone who was just as competent as the founders but wanted less risk or stress might prefer to be an early employee.

You can titrate the amount of startupness you get in your job by the size of the company you join. If you're the first person hired by a startup with one or two founders, you'll probably be a de facto cofounder. Whereas if you get hired by a startup with 30 people you'll have a lot less risk and stress, but it will probably still be more interesting than going to work for a big company.

Another reason is that luck (usually in the form of timing) is a big component of startup outcomes, so in some cases it can be a better bet, measured both financially and by how much effect you can have on the world, to join a startup that is obviously taking off than to start your own. All the first several hundred employees at Google, to take an extreme example, probably made more money and had more effect on the world than they would have on average by starting their own companies.

Plus you need more than ability to start a startup. You also need an idea and probably a cofounder. Joining an existing startup can be the easiest way to get both.

Re: Work at a Startup

#22

Post by sachinag »

mitko wrote: post #15
gsiener wrote: post #2

I'm really interested in attending something like this but am on the East Coast. Will there be any audio/video available from this event?

arhg, me too. I just applied and then found out that it is in MV and I am in Boston. Well, that's life...

If you're a hacker and want to work at an interesting, funded startup in Boston, there are about a million jobs here. Everyone here is hurting for good technical talent. Just today, I had lunch with an executive at a company that is just killing it and, as always, the conversation turned to recruiting. If you want a gig in Boston, shoot an e-mail to sachinag@gmail.com with your resume and what you're interested in, and I guarantee you that I can make at least one substantive intro tailored to exactly what you want.

Re: Work at a Startup

#23

Post by rmorrison »

zaius wrote: post #17
sayrer wrote: post #16

This comment will sound a little confrontational, but here it goes. Why would anyone competent enough to work at one of these companies choose that path instead of being a founder?

Everyone's risk tolerance is different. Sometimes, you need to get paid. This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit.

This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit.

Simply out of curiosity, what range equity stake would a programmer get? More specifically, if there is a $10mm exit, what would a programmer stand to make? How about $100mm? I know it varies by company, vesting, additional funding rounds, and a bajillion other factors. I'm just curious as to rough order of magnitude.

While I think it's a great idea to work for a startup because they're exciting environments which offer a lot of learning experiences that big companies do not, "big exits" for non-founding programmers are exceptionally rare and are too easily oversold.

Re: Work at a Startup

#24

Post by Tichy »

branden wrote: post #18
sayrer wrote: post #16

This comment will sound a little confrontational, but here it goes. Why would anyone competent enough to work at one of these companies choose that path instead of being a founder?

I just want to code. I'm okay with the risk and glory going to someone else.

Is that attitude common, or are you one in a million? (Serious question)

Re: Work at a Startup

#25

Post by 1053r »

rmorrison wrote: post #23
zaius wrote: post #17

Earlier quoted context omitted.

Everyone's risk tolerance is different. Sometimes, you need to get paid. This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit.

This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit. Simply out of curiosity, what range equity stake would a programmer get? More specifically, if there is a $10mm exit, what would a programmer stand to make? How about $100mm? I know it varies by company, vesting, additional funding rounds, and a bajillion other factors. I'm just curi…

Based upon some completely unscientific asking around, it seems like a person who has an employee number under 10 is likely to make 1/50th to 1/400th of the total exit after taxes. So $100mm for the company = $500K plus or minus. Not total crap, but also probably not worth it based upon the money alone.

The reason to work for a startup as an early employee is the fun (if you like working 12-14 hour days on cool stuff) and the experience. I'm guessing having a successful startup under your belt makes it a LOT easier to get your own company funded down the line. Also, people can end up much higher in a large organization earlier than they could have without some serious corporate climbing.

Re: Work at a Startup

#26

Post by pg »

rmorrison wrote: post #23
zaius wrote: post #17

Earlier quoted context omitted.

Everyone's risk tolerance is different. Sometimes, you need to get paid. This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit.

This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit. Simply out of curiosity, what range equity stake would a programmer get? More specifically, if there is a $10mm exit, what would a programmer stand to make? How about $100mm? I know it varies by company, vesting, additional funding rounds, and a bajillion other factors. I'm just curi…

This is the kind of thing I'm going to talk about at the event. But here are some rough calculations. If you were the first person hired by a YC startup you'd probably get between 3% and 30% of the company. I know that's a wide range, but that's the range I've seen. Suppose to make the math easy you got 10%. Suppose you get diluted 20% by funding rounds before a $10m exit. That yields $800k.

In a $100m exit you'd probably have been diluted more, because the company would probably have taken VC funding to get that much. So suppose your 10% was diluted by 2/3. Then you'd get $3.3 million.

This is assuming you're the first person hired by the startup, of course. The amount of equity you get decreases by time to a power. Someone who joins the company after 6 months would get way less than half as much as someone who joins after 3 months. It's rare for a series A funded startup to give more than 1% to a programmer.

Re: Work at a Startup

#27

Post by starkfist »

rmorrison wrote: post #23
zaius wrote: post #17

Earlier quoted context omitted.

Everyone's risk tolerance is different. Sometimes, you need to get paid. This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit.

This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit. Simply out of curiosity, what range equity stake would a programmer get? More specifically, if there is a $10mm exit, what would a programmer stand to make? How about $100mm? I know it varies by company, vesting, additional funding rounds, and a bajillion other factors. I'm just curi…

Programmers It's best to look at this as a theoretical upper bound, not a likely outcome. Usually the investors, founders and board members fuck around with the corporate structure, option splits and preferred vs. Common stock so that the employee options are worthless, anyway.

Re: Work at a Startup

#28

Post by pg »

starkfist wrote: post #27
rmorrison wrote: post #23

Earlier quoted context omitted.

This will get you in the door at an already funded startup where you'll get a salary and still have the potential payoff of a big exit. Simply out of curiosity, what range equity stake would a programmer get? More specifically, if there is a $10mm exit, what would a programmer stand to make? How about $100mm? I know it varies by company, vesting, additional funding rounds, and a bajillion other factors. I'm just curi…

Programmers It's best to look at this as a theoretical upper bound, not a likely outcome. Usually the investors, founders and board members fuck around with the corporate structure, option splits and preferred vs. Common stock so that the employee options are worthless, anyway.

Usually the investors, founders and board members fuck around with the corporate structure, option splits and preferred vs. Common stock so that the employee options are worthless, anyway.

That's not common in successful startups. No successful startup would want to alienate their employees this way. It wouldn't be worth it, just to recapture a few percent of stock.

Common stock only gets massively diluted when a company is in trouble. And usually startups in trouble end up dying, or getting bought in a fire sale, so in those cases the equity isn't worth much anyway.

Re: Work at a Startup

#29

Post by starkfist »

pg wrote: post #28
starkfist wrote: post #27

Earlier quoted context omitted.

Programmers It's best to look at this as a theoretical upper bound, not a likely outcome. Usually the investors, founders and board members fuck around with the corporate structure, option splits and preferred vs. Common stock so that the employee options are worthless, anyway.

Usually the investors, founders and board members fuck around with the corporate structure, option splits and preferred vs. Common stock so that the employee options are worthless, anyway. That's not common in successful startups. No successful startup would want to alienate their employees this way. It wouldn't be worth it, just to recapture a few percent of stock. Common stock only gets massively diluted when a com…

Most startups are not successful. This way the executives the VCs installed when the company started to fail can walk away with something when they fold the company into another company in their portfolio and disguise it as an acquisition.

Edit: I think you edited your post as I made mine and made my point for me.

Re: Work at a Startup

#30

Post by listic »

Tichy wrote: post #24
branden wrote: post #18

Earlier quoted context omitted.

I just want to code. I'm okay with the risk and glory going to someone else.

Is that attitude common, or are you one in a million? (Serious question)

I suppose one in ten. This is a wise attitude. I am inclined to work with people like that.
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