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Startup Stock Options – Why a Good Deal Has Gone Bad

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Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#101

Post by ummonk »

aetherson wrote: post #57
dxbydt wrote: post #38

Earlier quoted context omitted.

> “If you want to own a house, have paid-for cars, put your kid through school, put away savings, and otherwise be completely comfortable then you can do just fine.” lol wut ? if you work in a typical SF startup, you can do precisely none of these things. Like, literally zero.

Well, it depends on the definition of "startup." If you work exclusively at seed-stage or A-round companies with like less than 15 employees, your salary will be a lot lower than if you work at lots of B and C-stage companies. I've worked at companies that at least called themselves startups for my entire career, and I own a house in San Bruno, my wife and I each have paid-for cars, we can put our kids through school…

How much more expensive would your house be today than when you bought it? How about 5-10 years from now?

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#102

Post by deanmoriarty »

matthewowen wrote: post #71
dxbydt wrote: post #38

Earlier quoted context omitted.

> “If you want to own a house, have paid-for cars, put your kid through school, put away savings, and otherwise be completely comfortable then you can do just fine.” lol wut ? if you work in a typical SF startup, you can do precisely none of these things. Like, literally zero.

SF startup cash comp for engineers is comfortably in the 150k-200k range, and often higher. This is series A, series B stage companies. If you have a few years of experience and are making less than this then I'm please to be able to inform you that you are underpaid. If you have one of those incomes at the higher end, you can do these things in the bay area. If you have more than one then that stuff is not hard at a…

Unless you mean both spouses should earn around 200k and thus bringing in a FAANG-equivalent income of 400k, I really don't know how you could afford what you are saying on a single 150k-200k salary (and perhaps another 50k for your spouse's salary, since not everybody works in tech).

After paying for CA taxes, fed taxes, kids' schools, rent, car expenses, 401k contributions, I really don't know how you would come up with the savings necessary for the huge down payment required for a house there.

Just last week, a friend of mine got outbid on a ~1.5M house in the East Bay Area because another buyer came in and offered a down payment of $700k (!!), whereas my friend just had a more traditional 20%.

Good luck getting to those savings on a 150k startup salary and mostly worthless options.

In my experience, and I certainly respect yours, people just need to stop working for startups and go to big corporations, period.

And I speak as someone who had a low 7 figure liquidation event from a startup, and I'm still so against startups, because that liquidation event still didn't match the compensation I could have gotten as FAANG all along.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#103

Post by pnw_hazor »

dasil003 wrote: post #45
ohaideredevs wrote: post #11

Earlier quoted context omitted.

Not exactly a unique experience, but my .05 - I started of at a startup with a "lol just do it" attitude to whatever the problem was. Worked 12 hours a day a lot, was stressed out all the time, didn't have a life, got calls at odd hours to deploy...but, if I didn't have that experience, I wouldn't have grown nearly as fast. Got to see all aspects of the products and the consequences of the decisions we made early on.…

FANG is undisputably the best risk-adjusted compensation return for a programmer, and they're up there in terms of working with super smart colleagues, and therefore they have a high floor, compared to say a startup that goes nowhere with the blind leading the blind, but the ceiling is also constrained by what projects you're working on. In terms of raw software engineering development there's probably no substitute…

Though at F and G there is the cost of having to rationalize working for an organization that is evil.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#104

Post by goobynight »

neilv wrote: post #78
deanmoriarty wrote: post #39

Earlier quoted context omitted.

In my very personal experience, many times startups are not full of the brightest engineers, especially if they are based in a major tech hub such as the Bay Area: most talented engineers these days, if location is not an issue, first try a shot at FAANG or similarly big companies where they can experience problems at massive scale and very high compensation. Hence, many folks who end up accepting to work at a startu…

I hear conflicting ideas about who's getting the most capable people, and I don't know what's true. Maybe a decade ago, a knowledgeable colleague, speaking of one of the better-regarded FAANGs, told me, "First they hired the A students, then they hired the B students, now they're hiring the C students." More recently, the sentiment I heard among CS-ish PhD students at one big university was that FAANGs (or, at least,…

That's probably because you were talking to " CS-ish PhD students".

First of all, they're looking to validate the choice they made in lieu of becoming a millionaire. It helps them sleep at night to think Google or whatever isn't cool (maybe it isn't).

Second, they're interested and driven by different things.

Every single good/great practical software engineer I know from college is working at FAANG or a unicorn.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#105

Post by reallydude »

deanmoriarty wrote: post #85
neilv wrote: post #78

Earlier quoted context omitted.

I hear conflicting ideas about who's getting the most capable people, and I don't know what's true. Maybe a decade ago, a knowledgeable colleague, speaking of one of the better-regarded FAANGs, told me, "First they hired the A students, then they hired the B students, now they're hiring the C students." More recently, the sentiment I heard among CS-ish PhD students at one big university was that FAANGs (or, at least,…

In my 10 year career, I've done 2 startups in the Bay Area (both early, one I left after Series A, another one I left after Series C) and more recently Google, and I can say the level of talent doesn't even compare in my opinion: from my experience, the engineers were so bad quality that I was feeling depressed and wasting my time most of the time (and constantly saying to myself "am I just a jerk in thinking of ever…

Some developers use work as an excuse to try something new (or to do something different). This was probably someone who thought a problem was easier than they imagined. Hubris comes hand in hand with experience (seniority?).

These kinds of initiatives happen all the time in every company, including Google. A team lead generally would quash this in the interest of reliability/safety/etc, I think.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#106

Post by tenaciousDaniel »

ohaideredevs wrote: post #11
seibelj wrote: post #3

Valid reasons to work for a startup: - You are a cofounder. - You have little experience and you are using this to break into the industry, and get experience on many different technologies ("wear many hats"). - They are working on a very specific problem or using a specific technology that you strongly desire to work on and it's difficult to do it anywhere else. - You want to work a certain way (remote, on the beach…

Not exactly a unique experience, but my .05 - I started of at a startup with a "lol just do it" attitude to whatever the problem was. Worked 12 hours a day a lot, was stressed out all the time, didn't have a life, got calls at odd hours to deploy...but, if I didn't have that experience, I wouldn't have grown nearly as fast. Got to see all aspects of the products and the consequences of the decisions we made early on.…

I can attest to this as well. I can't recommend this to anyone else, but personally I'm glad I went through it. I had one hellish week where I was so nervous I couldn't eat. Slept 2 hours a night and lost 5 pounds in one week.

Employees shouldn't be treated like that, and I will never work at a place like that again, but I am a dramatically stronger engineer because of those experiences.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#107

Post by pnw_hazor »

deanmoriarty wrote: post #85
neilv wrote: post #78

Earlier quoted context omitted.

I hear conflicting ideas about who's getting the most capable people, and I don't know what's true. Maybe a decade ago, a knowledgeable colleague, speaking of one of the better-regarded FAANGs, told me, "First they hired the A students, then they hired the B students, now they're hiring the C students." More recently, the sentiment I heard among CS-ish PhD students at one big university was that FAANGs (or, at least,…

In my 10 year career, I've done 2 startups in the Bay Area (both early, one I left after Series A, another one I left after Series C) and more recently Google, and I can say the level of talent doesn't even compare in my opinion: from my experience, the engineers were so bad quality that I was feeling depressed and wasting my time most of the time (and constantly saying to myself "am I just a jerk in thinking of ever…

Are you happy helping google do what it does? Building a surveillance society and monetizing people?

I think that it would get to me after awhile. Though when younger I probably wouldn't have thought too much about it.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#108

Post by dnautics »

pnw_hazor wrote: post #103
dasil003 wrote: post #45

Earlier quoted context omitted.

FANG is undisputably the best risk-adjusted compensation return for a programmer, and they're up there in terms of working with super smart colleagues, and therefore they have a high floor, compared to say a startup that goes nowhere with the blind leading the blind, but the ceiling is also constrained by what projects you're working on. In terms of raw software engineering development there's probably no substitute…

Though at F and G there is the cost of having to rationalize working for an organization that is evil.

Nobody ever said that about the As!!

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#109

Post by jpm_sd »

mdorazio wrote: post #43
ohaideredevs wrote: post #11

Earlier quoted context omitted.

Not exactly a unique experience, but my .05 - I started of at a startup with a "lol just do it" attitude to whatever the problem was. Worked 12 hours a day a lot, was stressed out all the time, didn't have a life, got calls at odd hours to deploy...but, if I didn't have that experience, I wouldn't have grown nearly as fast. Got to see all aspects of the products and the consequences of the decisions we made early on.…

FWIW, I've worked with a lot of entry-level people at normal companies over the years and would estimate that noob gainz are 30-50% higher in startup land for the first 1-2 years of career, maybe 10-20% higher the next two, then flat or actually lower than corporate thereafter. I think it comes down to 1) startups pile a lot more responsibility onto their young hires than normal companies are comfortable with + 2) st…

I've worked at two startups, then a BigCo, and now another startup. The wearing of many hats was definitely a leveling-up experience, but I felt that I plateaued in just the way you describe. Equity from both of those first two startups is now worth zero.

In my years at BigCo I worked with engineers who have 10-20 years more experience than I do. Often felt like the dumbest guy in the room. I learned a ton. No comparison. But I would never have gotten the job there without my previous startup experience. And without that experience I'm not sure I would even have been able to learn from my BigCo co-workers so successfully.

I got tired of corporate politics and a high traffic commute, so now I'm happily back in startup land.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#110

Post by tomnipotent »

deanmoriarty wrote: post #85
neilv wrote: post #78

Earlier quoted context omitted.

I hear conflicting ideas about who's getting the most capable people, and I don't know what's true. Maybe a decade ago, a knowledgeable colleague, speaking of one of the better-regarded FAANGs, told me, "First they hired the A students, then they hired the B students, now they're hiring the C students." More recently, the sentiment I heard among CS-ish PhD students at one big university was that FAANGs (or, at least,…

In my 10 year career, I've done 2 startups in the Bay Area (both early, one I left after Series A, another one I left after Series C) and more recently Google, and I can say the level of talent doesn't even compare in my opinion: from my experience, the engineers were so bad quality that I was feeling depressed and wasting my time most of the time (and constantly saying to myself "am I just a jerk in thinking of ever…

> At Google, this would never happen.

At a startup, a flawed but functional deployment today is better than a perfect deployment tomorrow. I've never heard of a startup that was successful because it got software right in it's early stages.

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