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Working for a startup makes less sense, unless you are into the mission

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Re: Working for a startup makes less sense, unless you are into the mission

#81

Post by LargeWu »

rubicon33 wrote: post #12

> That startup sold for 200 million dollars and, as the 10th engineer, I made ... 15000 dollars from that exit. Why so low?

I worked at a company for roughly five years, that sold for 250M. When I was hired I was like 4th engineer, but by the time I left I had 2nd most seniority in engineering. Exercised my mostly vested options when I left.

I got mid-5 figures. In the year following my departure to BigCo, the difference in my salary was more than what my options ended up being worth.

One of the C-level guys who was there for 8 months when the company sold made 100x what I got. He wasn't a founder. He came on late in the game and basically had nothing invested.

That's why working for a startup hoping to get rich is a sucker's bet. The game is rigged against you unless you're a company officer.

Re: Working for a startup makes less sense, unless you are into the mission

#82

Post by mgkimsal »

CryoLogic wrote: post #4

The comp packages at big tech companies are becoming insane. In Seattle it's not unreasonable for a senior software engineer with some good connections to be making 200-250k. With that comes life insurance, health insurance for your whole family, disability insurance, etc. That's more in cash AND benefits than a doctor.

Thanks for some reasonable(?) numbers. I too often see people here and other places positing that mid-level developers easily net $500k a few years out of college. I've no doubt that some at FAANG companies make that, but those seem very much at the high end.

"Total comp" vs "total cost" are different numbers as well - stock, 401k, etc all can add to the final numbers too, but $200-$250k seems a lot more in line with the top end numbers I'm familiar with.

Re: Working for a startup makes less sense, unless you are into the mission

#83

Post by mgkimsal »

hobofan wrote: post #67
seem_2211 wrote: post #24

Earlier quoted context omitted.

I think the question needs to be asked: will this last for the next 25-30 years? I really hope so, but unlike being a doctor, it's a lot more uncertain than we'd like it to be.

Unless there are extreme breakthroughs in making software engineering approachable for currently not quite as qualified people, I don't see it changing. Breaking the social stigma of "nah that is extremely complicated, I can't learn that" would also be a big one. BIG SIMPLIFICATIONS AHEAD There are a lot of new software engineers popping up all the time, but very few ever reach a "senior" change, and a lot of them en…

> There are a lot of new software engineers popping up all the time, but very few ever reach a "senior" change

And yet many of them still get the 'senior' title and role, and still end up producing unmaintainable systems. I've had to clean up after quite a few.

Re: Working for a startup makes less sense, unless you are into the mission

#84

Post by dman »

USNetizen wrote: post #78

I'm not sure I understand what the real dilemma is here of working for a startup. Being employee #15 is not the same as being in the first 5 hired. You don't take the same risks (or even do the same type of work), so there is obviously less reward when it's time to exit. 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 try…

Everything you said makes sense. Now pick up the phone and talk to a recruiter who is trying to hire employee #15 - the tales and projections you will get will be off the charts. My take is that there are people out there who will thrive for every risk/reward ratio. The misgivings usually arrive when employers misrepresent the risk/reward ratio during the hiring process.

One of my favorite questions to ask startups during interviewing is - "In a semi plausible best case scenario how much money do you want me to make?". Answers are usually all over the place.

Re: Working for a startup makes less sense, unless you are into the mission

#85

Post by smallgovt »

cik wrote: post #72
crazygringo wrote: post #17

Earlier quoted context omitted.

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?

This number makes complete sense. I was a 'key employee' once upon a time - in a startup that had just raised f&f, and I received a FULL 2% (unheard of for Canada). 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.

It sounds like your startup was unfortunately an outlier with respect to the level of dilution experienced. 99% dilution over 6 rounds is far from 'usual reality'. More common is 20% dilution per round.

Re: Working for a startup makes less sense, unless you are into the mission

#86

Post by SergeAx »

Trying Kotlin just for kicks or introducing a half-baked but hyped queue server is not a good idea for BigCo too, unless that BigCo is a developer of tech in question. What is a better idea is to spin up a pet project, particpate in hackathon or contribute to FOSS with this tech under the hood.

Re: Working for a startup makes less sense, unless you are into the mission

#87

Post by CalChris »

fizwhiz wrote: post #59
acconrad wrote: post #21

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…

What's the Big 4 in this context? Generally that term applies to accounting firms (PWC, E&Y etc.)

That used to be The Big 8 and people knew of them as The Big 8, even me. I think that The Big 4 is used now with a tinge of irony.

  Arthur Andersen.
  Coopers and Lybrand.
  Deloitte Haskins and Sells.
  Ernst and Whinney.
  Peat Marwick Mitchell.
  Price Waterhouse.
  Touche Ross.
  Arthur Young.

Re: Working for a startup makes less sense, unless you are into the mission

#88

Post by eanzenberg »

LargeWu wrote: post #81
rubicon33 wrote: post #12

> That startup sold for 200 million dollars and, as the 10th engineer, I made ... 15000 dollars from that exit. Why so low?

I worked at a company for roughly five years, that sold for 250M. When I was hired I was like 4th engineer, but by the time I left I had 2nd most seniority in engineering. Exercised my mostly vested options when I left. I got mid-5 figures. In the year following my departure to BigCo, the difference in my salary was more than what my options ended up being worth. One of the C-level guys who was there for 8 months whe…

What was your equity grant by %?

Re: Working for a startup makes less sense, unless you are into the mission

#89

Post by eaenki »

Nowdays a seed round is $1.5M. That could buy a startup 3 engineers at $200k/y in SF/LA/NY/Seattle for 16 months + $300k on distribution and misc. or 3 engineers at $150k/y in Switzerland and $600k in distribution and misc.

as a founder I don't subscribe to giving 30-40% less than the top firms pay plus some basis points of equity worth something in the instance the company becomes a $10B company. and it makes little sense.

Any great engineer can work at FAANG for $230k and still work on interesting problems even tho its riddled with politics. Paying 30%-40% less means you're not hiring the best, but mediocre people who have been rejected at FAANG or drank the startup kool aid.

Re: Working for a startup makes less sense, unless you are into the mission

#90

Post by eanzenberg »

smallgovt wrote: post #85
cik wrote: post #72

Earlier quoted context omitted.

This number makes complete sense. I was a 'key employee' once upon a time - in a startup that had just raised f&f, and I received a FULL 2% (unheard of for Canada). 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.

It sounds like your startup was unfortunately an outlier with respect to the level of dilution experienced. 99% dilution over 6 rounds is far from 'usual reality'. More common is 20% dilution per round.

6 rounds of 20% dilution will get you to 74% total dilution from the initial grant.
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