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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

#101

Post by kyleblarson »

crazygringo wrote: post #17
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?

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?

Liquidation pref for investors with preferred shares.

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

#102

Post by crazygringo »

cdoxsey wrote: post #77

Working for a startup absolutely makes sense. 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 b…

Likewise, there's nothing preventing you from taking an offer at a startup, continuing to interview and taking a job at a big company whenever, even if it's only 2 or 3 months later.

I mean, try not to make a habit of it, and give the first place a chance to fully match the salary/RSU's.

But I've seen it happen before, and while the first startup won't be happy with you, it's not going to have any long-term consequences. Just don't bother even putting them on your resume.

I've also seen companies do the same -- hire someone in the spring of their senior year to start in the fall, and then rescind the offer late summer because some internal financial projection didn't pan out. (And even have the guts to ask for a signing bonus back. "Sorry, already spent it.")

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

#103

Post by pault »

mgkimsal wrote: post #82
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…

I've been told I'm pretty close to top of market in Austin at ~225

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

#105

Post by umeshunni »

misthop wrote: post #48

I look at it another way - there are plenty of startups (series A, B) that pay fair industry wages along with equity. If the exit is worth nothing - no huge loss, I made what I should have. If there is a good/great exit - awesome, I pocket 1-10 years worth of salary on top of a fair salary. Could I make more with salary+rsu at a FAANG? possibly, maybe even probably - but then I would have to work at a FAANG

Effectively, you're saying you'll take a 50% paycut (including RSUs) to avoid working at a FAANG? Most people wouldn't do that.

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

#106

Post by Zephyr314 »

eanzenberg wrote: post #90
smallgovt wrote: post #85

Earlier quoted context omitted.

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.

Which in this case nets you >$1M [0] vs the 80k quoted above. This also assumes no retention grants over 6 rounds.

  [0]: 0.02*0.8^6*$200,000,000 = $1,048,576

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

#107

Post by kelnos »

I joined a startup 7.5 years ago and, from a money perspective, it's vastly exceeded expectations. But I wouldn't join another startup for the money; it's just not reliable, and I recognize that I was very lucky to have accidentally picked a winner.

Yes, you can do interesting work at a BigCo. Sometimes you even get to work on greenfield projects, which is often even better than working on a greenfield project at a startup, because usually the BigCo has a lot of infra and resources that you can lean on that allow you to make fewer compromises.

But you're just never going to have an outsized influence on the trajectory or success of the company as a whole. You're never going to have the authority or ownership to make big decisions for more than your (relatively small) area of the BigCo. If you want that, the best way to get that is to join a smaller startup.

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

#108

Post by scottlegrand2 »

There's definitely a model for selling MVPs for fifty to a hundred million dollars, especially in AI right now. If you can stay small and take away 5 to 25% of that you win. The best way to approach this is to work at a bigco and then leave to build something they need but for which they lack the will to build themselves.

But the minute you're talking less than 1% equity, unless it's the next Facebook, you belong at the bigco of your choice.

All IMO of course...

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

#109

Post by systematical »

Agreed. If my company ever exits and thats a big if. I doubt I get much. 100k would be amazing, but I am likely sacrificing 20k per year to work here at this point. The reason I stick around here is I can work full remote and have been able to travel the world much more. But after four years, I'd trade that in for a really nice pension or matching 401k in a heart beat.

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

#110

Post by [deleted] »

cdoxsey wrote: post #77

Working for a startup absolutely makes sense. 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 b…

[deleted]
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