71–80 of 269 posts
This is knitpicky, because OP's point may still stand, but as a founder, this is what comes to mind after reading this: When I hear "work for a startup", I don't assume that means "be the 10th engineer at a company". You might make some money at that point, but you're not going to get financial independence unless there's a billion dollar IPO. By BigCo standards, 10 engineers is a tiny startup. By venture/founder sta…
this one writes itself
> That startup sold for 200 million dollars and, as the 10th engineer, I made ... 15000 dollars from that exit. Why so low?
Yeah, that's 0.0075%. Versus a ballpark of a 10th engineer getting, say, 0.5%. Even a few rounds of dilution can't explain a drop of two orders of magnitude. I'm thinking the author either didn't pay attention or care or trusted too much in the initial offer, didn't stay long enough to vest most of it, didn't buy most of their options in the end, or all of the above?
Fast forward through the (usual) reality of 6 rounds of dilution, and my 2% was worth less than 0.02%. If the startup went from a $2M valuation to $200M (as it did) then my take would have been $40K.
Do with that what you will.
> That startup sold for 200 million dollars and, as the 10th engineer, I made ... 15000 dollars from that exit. Why so low?
Insanely low. Strangest part of the article. Potentially it wasn't a successful exit? Dirty term sheet or multiple down rounds and $200m wasn't a successful exit?
One thing that gets glossed over a lot with startups is that often times the technical skill level is really low. If you are a young engineer and you are hoping to learn technical skills, be very very careful about which startup you join because you might end up at one where nobody actually has any idea what they are doing. And if you yourself are in the learning phase of your career, you might not have the experienc…
> At least one very important benefit of joining a big, reputable company is that the technical skill level will be good I don't believe this is a universal truth, especially since your experience at a large company is largely dictated by the specific team you work on. I've definitely worked for small startups that were far more talented than some of the technical teams I've worked on at big companies.
You don't lose your unvested equity, you don't have to spend 6 months re-onboarding (3 would be sufficient), you can have a much better idea of what the working environment in your new team is going to be, then going across the street to a competitor.
Earlier quoted context omitted.
Okay, and as someone who has hitherto largely worked at startups (2/3rd of my career), let me tell you the counterpoint. There is not a lot of risk from your perspective, but there is a large amount of risk for us . At a startup, you push all you can towards steering the ship in the right technical direction. For example, unlike at a BigCo, you are likely to be that person who will write the technical debt that later…
> But you only get the pay-out if you actually manage to last until the exit. If you leave before then, because of politics or some failed product push or what-have-you, then you will have to exercise your options, which puts you in a bind in terms of financial risk. Employee #1 of a startup that sold for 9 figures chiming in. I loved the people I worked with (until we got to around 70+ and bureaucracy/meetings grew)…
Aside from enthusiasm for the mission, or the chance to strike it rich, there is another important consideration: self-actualization. That is, how much do you need it? In a way, self-actualization is like having your own personal mission. If things like impact, influence, autonomy, innovation, speed, and big challenges are important to you, than you'll probably be miserable at a well-established company, regardless o…
The unstated assumption here is that you have a pile of offers from Amazon, Google, Microsoft, etc along with some from startups and you have to make a decision about which to go with.
I suppose my experience might be unusual, but I don't think that's typical. You've got an offer on the table, and your choice is to go with it, or reject it and hope you're given an offer by some other company.
I've seen it go both ways. Maybe the next week you do see the better offer. Or maybe 3 months later and a few dozen rejections later you've got nothing to show for it.
So you take what you're given.
If you want to get rich, the best way to do it is to start a company yourself - but it sounds like the author didn't want to go that route after trying it. That's OK though, it's not for everyone. But I think the author needs to understand the risk-reward thing here a little better - you need to take more risks to earn more reward, and being the 15th hire at a company that has most likely already raised money is significantly less risk then being like employee #3. A lot of companies compensate their first handful of employees in equity a lot more than others because they took risks (and pay cuts) plus made contributions to the growth of the company that that employees #10 and after most likely didn't.
It still makes perfect sense to work at, or start, a startup - you just have to have the right appetite for risk and the right mindset for the varying types of work you'll be doing (compared to latter employees who can specialize more). You simply won't get "rich" without taking the risk and accepting that you have to broaden your capabilities beyond core technical skills to grow at a startup and earn your way to a nice exit package.
As someone who was a 1st engineer of a startup that successfully exited I had what would be considered a good payout. When looking over the course of my career, however, it simply made up for the reduced salary I took for the years I worked there. It was a net-neutral outcome to be the 1st engineer at a startup that actually exited for a substantial (8-figure deal) outcome which already puts me in the minority. So no…
This is such an important point for people to know when they're joining startups. You're basically investing in the startup.
If you're going to be an investor it's good to know what your alternative investments are.
If you put $50k in the stock market every year for 5 years @ avg. 8% return, your have ~$400k. Over 10 years it's ~$900k.
At 1% equity (after dilution) you'll need a ~40-90M exit to reach those goals. Given that your taxable event will be bigger, it's probably more like a $60-120M exit to break even if you're considering a $50k/year pay cut in return for equity.
Both the market and startups have risks. But if the upside of investing in a startup won't reasonably beat the market then you're essentially taking a pay cut.