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

My guess 6 to 10 years

Health insurance and housing instability is a huge risk. Not to mention the weaker pay and corporate structure.

If company explodes within 4 years (like most startups), I'm off interviewing again, and my family relies on my health insurance for substantial coverage, as well as paying housing costs. Obamacare is getting gutted as we speak, so it might as well not exist.

if you want to change the game, set up a standard small company health insurance group and offer entrance to all employees and their families, regardless of pre-ex condition or whattever. So long as you find work for a company signed up with that group within, say 12 months from company collapse/being fired/whatever, you keep coverage. Effectively decouple employment from health insurance. Give me the ability to lose employment for whatever reason (remember, Fire Fast is a popular creed) without putting my family at risk of bankruptcy or losing our house, and I'll be far more interested in working for a startup.

Similarly, YC needs to contemplate pushing remote work hard on its companies. The amount of money I would have to ask for to live in the SFBA with, again, hedging the risk of company collapse or being fired is absolutely absurd.

There's extremely little upside for me to take the enormous risk of being poorly managed, company doing wrong decisions, market not being there, etc. The liklihood is that I lose money, my bosses are very inexperienced, and the business doesn't fly. Maybe I am a reasonably early stage employee and walk out with a $0.5m check (this is a reasonable ballpark for an IC). That's cute... RSUs from major employers equal that for reasonably senior ICs. Without the risk.

For comp, you will need to jack up equity substantially - probably some kind of preferred share not subject to clawbacks (I remember well how Skype took advantage of ICs) - as well as meeting the cash salary of the big players. This hedges the risk of the company exploding.

These days, I generally only talk to startups who are past their A round, have paying customers, and reasonably experienced engineering management. And I expect market comp as well as a well seasoned benefits plan.

No, he’s correct. MSFT pays a lot more in the Bay Area than Seattle because the cost of living is so much lower in Seattle (no state income tax, housing, etc) that they can get away with paying a lot less.

My total compensation went up by ~80% going from MSFT to FB (but my housing costs 3x in the Bay Area vs what I had in Boston so it’s not as large an increase as it sounds).

Respectfully, if you don’t like the split, the clear answer is to be a founder.

The option is available to all, but very few take it. For really good reasons.

I definitely echo the feelings about compensation at startups. They massively over-value their equity because there is no risk adjustment, they just assume that the face value price of the shares is how you should be valuing the equity, which is obviously total nonsense.

One surprising thing I encountered when leaving a startup was that non-startup companies would value my startup equity at zero when presenting offers, making that deal even worse.

I definitely felt like the founders were being completely disproportionately rewarded to everyone else, which drove some amount of resentment on my part.

One of the pet ideas I have is that founder/employee shares should have some sub-linear returns with the value of the company, with the gap being redistributed to people down the value chain. E.g. once the founders have gotten a few million from their shares, part of the returns should start going to early employees, and once they have some amount of money it starts going to later people, etc.

Another idea could be for employees to be paid with options for an entire YC batch, rather than a single startup to reduce the risk associated with being paid in equity for a single startup. This is tricky for various reasons, but tries to reduce the risk without meaningfully changing how much capital is needed.

When I lived in the Bay Area I was pretty surprised by the amount of startups in the South Bay, living in SF and then Oakland, I basically refused to commute down there because of the shitty transit situation.

There are "pros" for startups, but most of them depend a lot on what the alternative is, if your alternative is a high performing team at a well paying company, there aren't a lot of things in the pros column, but if your corporate job doesn't pay great or is sucking the life out of you, then startups could be great in comparison. So maybe the right way to frame this is more of an "is this right for you" question, than is it objectively good.

[EDIT]: Providing ways for employees to cash out their equity would do a lot to de-risk things too. Particularly for employees who have are leaving and there is little reason to keep them aligned and are willing to make space in the cap table.