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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

#151

Post by ChuckMcM »

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…

Not everything is about money.

+100 to this sentiment. It has never made sense to work at a startup to "get rich" it has always made sense (and will continue to make sense) to work at a startup in order to expand your personal skill set and to take on different challenges.

In the Bay Area, and I recognize that this may be completely different elsewhere, when you work at a startup it is often difficult to "hide" if you are under performing, and it is easier to "shine" when you put in the extra effort. It is also generally a place where engineers can try on more marketing roles and vice versa. Moving from "management" to "individual contributor" is often more fluid, and the variety of technologies you are exposed too can be quite diverse. Start ups are generally less 'snobbish' about which college you graduated from or even if you graduated from college, concerned more with results and less with appearance. Turn over (people coming and going) is generally higher so you end up knowing people at more companies which builds a "network" when you decide you want to work somewhere else.

For new engineers I typically advise them to find 'mid-stride' startups, generally something that as locked down a Series A or Series B round so there is "real money" and they can generally make a near market rate base salary. And I advise them to go in with the attitude that they are using the startup to expand their skill set and increase their exposure to various roles.

Generally its a great way to launch into your second (or third) job.

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

#152

Post by notacoward »

I've worked for ten startups. Financially, not a great idea. Like the lottery, a few win big and the vast majority lose. I had one decent exit, which is about par for the course, and really it just brought me up to parity with my BigCo colleagues. I'll make more in four years at a FAANG company than I did in four years even at that one successful startup.

As far as learning, it's also a mixed bag. Sure, you get to learn a lot of different things, but a lot of it is the digital equivalent of cleaning toilets. You might have some influence over which technologies get used, but only a small number will get used company-wide vs. the wide variety that might exist at a larger company. I was still probably able to learn more about storage and networking and HPC and other general areas at some of those startups than now, but it's not clear it was any better for my market value. Even though much of what I'm learning now is totally specific to this employer and should barely even count in any future job search, there's a lot of cargo-culting in this industry so it's likely to make more than impression than even the most innovative startup nobody ever heard of.

There are a lot of reasons to choose working at a startup, but they're mostly about personal preference and fulfillment rather than doing your career or finances any good. In some ways, startups would be a better choice late in someone's career, not early.

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

#153

Post by deanmoriarty »

throwaway93289 wrote: post #40
lambdasquirrel wrote: post #26

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)…

I would love to understand how employee #1 got an "embarrassingly" low amount from a 9 figure sale, especially when you say that the exercise tax would have been high. What was the issue? I can think of:

1) Massive dilution or liquidation preferences?

2) Failure to negotiate significant equity at the beginning of the company?

3) Something else?

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

#154

Post by xiphias2 »

birken wrote: post #96
save_ferris wrote: post #61

Earlier quoted context omitted.

> 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.

Well nothing is a universal truth, but I think my point is generally accurate. IMO a bad team at a good company is way way better than a "good" team at a bad startup where nobody knows what they are doing. At the very least the company will have lots of resources outside of your team to learn from (company-wide infrastructure and processes, tech talks, etc). I also am not saying all startups are bad, and in fact I kn…

I agree with you with most things, but bad team is bad team everywhere, and it can ruin your life and career.

It's important to recognize it and switch teams inside the company after 1-2 years if it's needed.

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

#155

Post by kelnos »

seem_2211 wrote: post #24
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.

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.

Does it need to? If you're making $250k a year (which honestly I think is lowballing; source: personal experience) and still have compensation growth, you shouldn't need to work another 25-30 years before retiring, as long as you don't feel the need to live a lavish lifestyle and are fine retiring in an area that doesn't have a high cost of living.

If you're in your mid 30s now, and are already making $300k+ (very doable if you're skilled and work for an established company), I don't see why you couldn't retire by the time you're 50 with $2M+ in the bank. Even if you choose not to retire fully, even taking jobs that drastically cut your income to under $100k a year should net you a very comfortable retirement with a nice buffer. Just don't buy a house in San Francisco.

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

#156

Post by LargeWu »

eanzenberg wrote: post #88
LargeWu wrote: post #81

Earlier quoted context omitted.

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 %?

They were ISO's, I only knew how many shares I was granted, but by the time of the exit, following several rounds of funding, it ended up being around 0.02%.

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

#157

Post by ChrisGammell »

xondono wrote: post #135
zapita wrote: post #42

Earlier quoted context omitted.

There is still a financial aspect though: that rapid increase in responsibility and experience most probably translated to higher income at your next jobs. And there is a compounding effect each time you change jobs, so the earlier you were in your career when you worked at a startup, the more you gain from it financially over the course of your career. I think we have selection bias on Hacker News because many of th…

This. I do hardware (sch/pcb) design in spain, I’m in a lead position in a small company. When I look at what I’ve built, I have experience with technologies that most of my college mates are still mystified with (e.g. DDR4 or x64 architecture). Most electronics in europe are industrial/power electronics, and most engineers spend their days doing what amounts to paperwork. In contrast I’ve had to ship new designs on…

Would love to hear more about your database system!

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

#158

Post by deanmoriarty »

mi100hael wrote: post #132
eanzenberg wrote: post #75

Earlier quoted context omitted.

Not sure how to reconcile the fact that a) you had golden handcuffs because of the exercise tax and b) the amount u got was embarrassingly low. Was your strike price too large or something? Obviously you made a lot of money if you couldn't afford the taxes up front.

Typically exercising options gets taxed as regular income on the difference between option strike price & fair market value. If OP had something like $300k of options, that'd be about a $100k tax bill assuming the strike price was appropriately low. Not a very big payout on a 9-figure exit, but also not pocket change for the taxes.

Well, if the "9 figure" was 100M, then 300k seems fair, since after 10 years of fundraisings and even minor dilutions, it's very easy and expected to go from 1% to 0.3%.

On the other hand, if the amount was 500M, 300k seems very low, hinting to a final ownership of ~0.06%. If that was true, even after considering all dilutions, that makes me think that OP didn't negotiate a fair equity package to begin with, since as employee #1 you should definitely have at least 1%.

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

#159

Post by aggronn »

lambdasquirrel wrote: post #26
aggronn wrote: post #14

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…

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…

So I wrote a longer post about founder risk, but I realized maybe I misunderstood what you meant by this:

>There is not a lot of risk from your perspective

You mean, from my perspective, it sounds like I don't think early employees take on a lot of risk? I wanna be clear: Options are risky. Working at a startup for options is much riskier than taking cash. I hope it doesn't sound like i'm denying that.

If you're making market salary, and you're getting equity on top, then maybe its not so risky. But if you're taking a pay cut for equity in any form, you are absolutely taking a financial risk.

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

#160

Post by meuk »

> I made ... 15000 dollars from that exit. Let me put that figure in perspective. That is the same amount a recent college grad would make at Facebook in 2 months.

Excuse, but it is really hard to empathize with the author for me after reading this. Complaining about 15k that's being tossed into your lap is not going to make you look good.

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