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

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

#911

Post by maconic »

seige wrote: post #373
acconrad wrote: post #129

I was the first engineer at a TechStars startup that did have a successful exit (I was there about 5 years before the exit). If there is something I want YC to know, it's this: You helped create the culture of founder empowerment. You have the power to evolve that narrative to those that sacrifice as early employees. Tell the world that early employees deserve a lot more equity. Tell the world that early employees co…

THIS. Its all about the founders. The VCs don't care, the acquirer doesn't care and largely, the industry doesn't care. I have been at 3 startups and they all feel more like "come change my world" instead of "come change the world". Equity is so lop-sided that its almost laughable. I earlier thought that a successful startup exit actually carries weight on one's resume but that's only on the founder's resume. Nobody…

I would recommend making a distinction between a startup that manages to get acquired as a small team for building a good product (Instagram is an extreme example... but I know of a few startups that few here have ever heard of where the outcome for employees was substantially better over the same period than if they had worked for Google or Facebook).

There is perhaps a warranted disdain for the behavior of founders on this thread, but I would also like to point out there are founders that genuinely care about the people on their team and would either ensure the equity was sufficient upfront or--if the total size and scale of the startup was miscalculated initially such as assuming the startup needed 100 employees when it really only needed 10--ensuring they receive ample compensation from the acquirer or not taking the deal. These types of founders do exist too, and I think there is an onus on an employee to figure out what kind of boss they have signed up to work for. If I had a few interactions with Steve Jobs, for example, I'm 100% sure I would have quit.

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

#913

Post by humanrebar »

munchbunny wrote: post #782
acconrad wrote: post #567

Earlier quoted context omitted.

Pre-series A. Once Series A comes into play, you can get paid "market" - which is to say, the normal rate outside of FAANG.

"Market" is weird to measure, because you're not really asking what market rate is, you're asking what your baseline is. If you can get a FANG job, the number you care about is effectively the average of what FANG would pay. If you can't, then it's effectively average rate outside of FANG.

AND, arguably, "market rate" in SV is below market rate elsewhere, especially when you factor in cost of living.

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

#914

Post by nottorp »

When I hear startup, I think 80+ hour weeks with low pay and a very very small chance of being compensated for that. If there is any way to compensate ruining your health financially.

Basically, it's all cons. Unless you like playing the lottery and have no life.

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

#915

Post by maconic »

rosser wrote: post #889
icedchai wrote: post #888

Earlier quoted context omitted.

My point is Employee #1 should’ve asked for more. 1% isn’t enough. Maybe 5 or 10% is.

Yes, let's blame the person that structurally has less power in the dynamic for having that power imbalance used against them. Of course you can try to negotiate for more. Enough people want to work at a startup however that if you ask too much, you'll get passed on, and they'll just hire the next candidate who doesn't act so entitled to a meaningful piece of the founders' pie. It's exactly the same phenomenon that l…

Well, but then don't look for generic cookie cutter startups that everyone wants to work at :) Go after the startup where you as employee #1 are uniquely positioned to negotiate for. If you're employee #1 and you just graduated from college and this is your first job, and you have no special abilities beyond every other CS graduate across the United States, then yeah, you really don't have much negotiating power... nor do you at any other large company like Google either.

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

#916

Post by rajacombinator »

acconrad wrote: post #129

I was the first engineer at a TechStars startup that did have a successful exit (I was there about 5 years before the exit). If there is something I want YC to know, it's this: You helped create the culture of founder empowerment. You have the power to evolve that narrative to those that sacrifice as early employees. Tell the world that early employees deserve a lot more equity. Tell the world that early employees co…

100% correct and I say that as a startup founder that thinks SV startups ripoff their early employees.

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

#917

Post by maconic »

wannabenerd wrote: post #676
joshe wrote: post #138

This is such a great area to work on. The equity side is pretty rough. Founders are very sensitive about disclosing important information about company performance. They are sensitive about disclosing the cap table. Some will share info with investors that they don't share with employees. And they are sometimes trying to pitch optimistically and leaving out items that don't fit the narrative. So you end up with a ver…

The 10-year exercise is such a no-brainer. Just ask yourself, startup founders & investors: when you issue stock options to your employees, do you want them to exercise them or not? If not, then what you're really doing is offering something you hope doesn't cost you anything and is therefore worth nothing. Good luck to you. If so, then do everything you can to help them do it. Holding an employee hostage because in…

I don't agree with that... I would want all the early employees to be rewarded for taking a chance on that. I would want to go the other direction and give restricted stock (which can be early exercised) when the valuation is low and with less than 10 year vesting (such as the standard 4-year vesting with 1-year cliff), it's in the employees' best interests and costs the company nothing. Of course, down the road after later rounds the common stock valuation becomes prohibitively expensive and then it probably makes sense for stock options. But at least back in my day it seemed the common thing was to give restricted stock to founders and stock options to employees. Not sure if that's still a common thing or not?

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

#918

Post by maconic »

alfredallan1 wrote: post #772
kentonv wrote: post #678

Earlier quoted context omitted.

> Early-stage companies should offer sufficient equity such that their employees should in expectation earn at least the same as they would at a public company. That's the joke! Nobody comes remotely close to offering enough equity that their total comp is equivalent! Imagine a company that just raised a $1M seed round on convertibles at a $6M valuation cap. Now say they offer an "extremely generous" 2% equity packag…

When you offer 10% per employee, how many employees can you actually take on??

I believe it was Sam Altman who had proposed a good solution to this, which is that you start off with a high number like that for employee #1 with decreasing numbers as the employee count goes up. If you are Instagram and become worth $1B with only 6 employees then everyone should benefit massively. On the other hand, if it takes 1000 employees to get to a great outcome, then obviously the founders and first employees will have been diluted by the addition of all the future employees required to achieve scale or an exit.

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

#919

Post by alfredallan1 »

icedchai wrote: post #876
acconrad wrote: post #820

Earlier quoted context omitted.

> If the founders don’t take 50% raises, neither should the super early employee with decent equity. You're missing the point of my original post. If a founder owns x100 the equity, why should an early employee be bound to the same salary restrictions? If anything, since I have 1/100th the equity, that means I should be able to get a multiple of some raise when series A comes through. Remember, equity is a lottery ti…

If founder has x100 the equity of employee #1, employee #1 screwed up.

I’m not too sure why you’re being downvoted, but it is probably because you phrased your statement a bit awkwardly.

But you’re right that (if there is only a very small number of co-founders) employee #1 should never be accepting 1/100 the total equity the founders have. Employee #1 screwed up in negotiating at least half way decent deal for themselves.

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

#920

Post by alfredallan1 »

icedchai wrote: post #877
s2g wrote: post #866

Earlier quoted context omitted.

They aren't treated as founders of any sort. They get paltry equity and then don't get raises.

They do get raises. They just have to be persistent. Most engineers don't speak up and are bad negotiators.

And most of the few that do happen to be arrogant entitled pricks. People on this thread who're saying that the founders should try and be fairer towards engineers might actually have a point, although until recently I’d not have agreed with that sentiment myself, and might in fact have argued against it.
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