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Startups Rejecting Venture Capital

nytimes.com

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Re: Startups Rejecting Venture Capital

#171

Post by halbritt »

x220 wrote: post #145
SeanAppleby wrote: post #134

Earlier quoted context omitted.

Anecdotally, I worked as a software engineer at a very small (10-15 person) startup that just got acquired by FANG, and I, as well as almost everyone else there, generally worked 40 hour weeks. My relationships were fine, I went to the gym most days, and I worked on a masters in AI on the side, and I also learned a lot more than I would have at large companies since I got to own way more complex and interesting proje…

That's really cool. Any tips on identifying startups with this work-life balance?

You can ask, but the ones that are terrible will tell you point blank that they care about work life balance and then simply fail to follow through.

My advice to folks is that if you don’t have a very significant chunk of the company, ie >1% then the payoff can never be good enough to compromise work/life balance.

If you’re a founder or very early and have 5% or some such the. That’s between you and your family.

Probably still ain’t gonna pay off.

Re: Startups Rejecting Venture Capital

#172

Post by knight-of-lambd »

x220 wrote: post #150
billconan wrote: post #117

Earlier quoted context omitted.

there are 2 kinds of engineers, one kind sent rockets and recollected them, made robots run and jump. The other kind, shrank blog posts to 140 characters, or added a timeout to short messages, removed the thumb down button, and called them a new feature. Today, we still remember the names of da Vinci, Tesla, Turing, not because they had a successful family ... I just want to keep the dream I had as a kid.

>Today, we still remember the names of So you're living based on how you will be remembered by strangers? That sounds incredibly unfulfilling and doesn't sound like a good way to live. In a few hundred more years almost no one will remember the names of those people either. >da Vinci, Tesla, Turing It's incredibly safe to say that you are not going to be as successful as these people. Almost no one achieves this much…

In a few hundred years nobody will remember you either: x220 the family man, who lived a complete life and raised wonderful children who went on to live very comfortable lives and have children of their own.

"I" am the best witness to my existence. Not the person giving my eulogy. Who are you to tell someone how to define what "fulfilling" means to them?

Re: Startups Rejecting Venture Capital

#173

Post by tyre »

will_brown wrote: post #58
eis wrote: post #8

VCs win if enough of their bets make it big enough to offset the ones that go under. Naturally the big hits are few and the ones that fail are numerous. That means the big hits need to be huge and the failures need to have a certain cap. The latter also means you can't run a company for 10 years in slowmo until they get profitable. And the big hits need to be huge which means they need to take over a nice chunk of a…

I think it’s just the start, soon there will be a much larger paradigm shift. Especially in tech where there is generally a large community of supporters who are willing to fund the projects they believe in directly. I think the Green Bay Packers is a perfect example, it’s the only “publicly owned” football team in the NFL and as a result when they need funding for large projects (like stadium renovations) they go st…

This is what Wefunder (YC W13) does with equity crowdfunding. It's great for companies that have passionate user bases. Even if the individual check size is small (e.g. min $100), it's a great for users who want to be part of something and great for companies who don't have to go to VC + can grow their user base.

The primary downside for startups is the cap table, but there's regulation in the works (already passed the House with near-unanimous bi-partisan support, waiting on the shutdown shitshow so the Senate can vote) to fix that.

Disclosure—I work at Wefunder, both on crowdfunding and very early cohorts (https://xx.team)

Re: Startups Rejecting Venture Capital

#174

Post by mathattack »

rchaud wrote: post #158
oAlbe wrote: post #137

Earlier quoted context omitted.

Pardon the ignorance, what does it mean to "pull a Zenefits"?

Zenefits was a highly touted workplace benefits startup that got into huge trouble when a Buzzfeed investigation (of all things), found that one of its execs had gamed a state insurance agent exam (I think that's what it was), so their staff could essentially cheat and obtain certifications faster. The exec in charge was fired, and a lot of their key staff had already jumped ship by then.

I think the pattern was worse than a few rogue employees, and it cost the CEO his job.

Re: Startups Rejecting Venture Capital

#175

Post by ezrast »

x220 wrote: post #145
SeanAppleby wrote: post #134

Earlier quoted context omitted.

Anecdotally, I worked as a software engineer at a very small (10-15 person) startup that just got acquired by FANG, and I, as well as almost everyone else there, generally worked 40 hour weeks. My relationships were fine, I went to the gym most days, and I worked on a masters in AI on the side, and I also learned a lot more than I would have at large companies since I got to own way more complex and interesting proje…

That's really cool. Any tips on identifying startups with this work-life balance?

Look for places with diverse workforces. My experience is that managers who expect long hours also expect everyone to be 100% aligned with the company vision, and people with different backgrounds tend not to last.

Consider the compensation package a company offers. Companies that want young go-getters are more likely to offer high cash and equity; great benefits packages are better for drawing in risk-averse family types.

Also don't be afraid to ask straight-up what the working hours are like during an interview, ideally from the lowest-ranked person they'll let you talk to.

Disclaimer: I don't have strong data supporting any of this, just my personal experience and intuition from working in the bay area.

Re: Startups Rejecting Venture Capital

#176

Post by pazimzadeh »

danielcarver wrote: post #101
sturgill wrote: post #46

Earlier quoted context omitted.

Paid for by?... I distrust free anything. VCs aren’t free money; healthcare is paid for by someone; professors have a salary even if tuition is waived; UBI requires cash to materialize from someone’s efforts... Further removing people from the most important parts of life and entrusting those to a benevolent central authority is a risk I’d personally _not_ take. The lessons I learned from the most recent US president…

UBI needs to be furloughed. UBI aka just a scheme to keep the money flowing from the prole’s wallet into altman’s pocket. Universal basic EQUITY is a different thing. But he’s not offering that.

"I think that every adult US citizen should get an annual share of the US GDP." -Sam Altman

http://blog.samaltman.com/american-equity

Re: Startups Rejecting Venture Capital

#177

Post by aliston »

dawhizkid wrote: post #64
hn_throwaway_99 wrote: post #39

Earlier quoted context omitted.

I think your point about employees is especially true, particularly since the large tech companies pay disproportionately so much more. If you are a senior-level software engineer, even if the startup is successful in the "unicorn" range, for most people that means an equity payout on the couple hundred K to the $1 million range for all but the very largest successes. Not bad at all, but when the FAANGS are already p…

Best bet is a growth co that offers RSUs over options and a few years away from IPO. They will generally offer you a premium over what you'd make at a similar level in a public co (to make up for the illiquidity of the stock), and if you believe in the growth story it can pay off big time.

Why RSUs over options? In CA, in particular, if you're at a rocketship, the tax benefits of early exercised options can be huge, whereas with RSUs you're paying 30-40% to the government.

Re: Startups Rejecting Venture Capital

#178

Post by will_brown »

tyre wrote: post #173
will_brown wrote: post #58

Earlier quoted context omitted.

I think it’s just the start, soon there will be a much larger paradigm shift. Especially in tech where there is generally a large community of supporters who are willing to fund the projects they believe in directly. I think the Green Bay Packers is a perfect example, it’s the only “publicly owned” football team in the NFL and as a result when they need funding for large projects (like stadium renovations) they go st…

This is what Wefunder (YC W13) does with equity crowdfunding. It's great for companies that have passionate user bases. Even if the individual check size is small (e.g. min $100), it's a great for users who want to be part of something and great for companies who don't have to go to VC + can grow their user base. The primary downside for startups is the cap table, but there's regulation in the works (already passed t…

While the concepts are similar, there is a legal difference between equity crowd funding (presumably under the JOBS Act) and a a non-security instrument Public Offering exempt from securities laws (ie Packers Stock or similar)

Re: Startups Rejecting Venture Capital

#179

Post by thruflo22 »

hsk0823 wrote: post #112
jonlucc wrote: post #81

Earlier quoted context omitted.

Maybe this is hopelessly naive or dumb legally difficult, but I wonder if a VC might have a slight advantage by offering funded companies a portion of the fund itself. They might be more enticing to founders. Of course there's still some severe disadvantage for employees. I'm thinking about a Planet Money episode that discusses big-time poker folks, and they frequently trade percentages of their winnings such that if…

But that's a deal a VC wouldn't make in the first place.

Some do https://www.kindredcapital.vc

Re: Startups Rejecting Venture Capital

#180

Post by dunpeal »

babaganoosh89 wrote: post #164
dunpeal wrote: post #121

Earlier quoted context omitted.

FAANG and other large, profitable companies like Microsoft will pay you that.

FAANG tends to pay ~300k for senior engineers. For 400k you usually need to get lucky with stock appreciation.

You can't just claim one absolute number as the comp for all "senior engineers".

There's a huge amount of variance, within FAANG and elsewhere.

As a simple example, SDE III at Amazon typically pays a bit more than $300k. Principal SDE, the next rank above that, will pay well over $400k.

And don't forget that during years of steep stock appreciation, like much of the past decade, actual compensation will often be higher than that.

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