Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Startup Stock Options – Why a Good Deal Has Gone Bad

steveblank.com

Post reply on HN
Print view View original

171–180 of 391 posts

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

#171

Post by hinkley »

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…

At some point in my career I discovered - to my horror - that I was learning as much or more new tech at consulting gigs than I did as a salaried employee. Even, I daresay, when I was working at startups.

When I pointed this out to people they didn't believe me. So it turned into a bit of a troll for me to say "yeah I'm going to go consult for a while to build up my skillset" and then watch their eyebrows do gymnastics.

You might assume, as I did, that they hire contractors who already know everything. They hire people with a reasonable skill in a couple areas they don't possess. But to actually contribute you have to drink from the firehose, going deep into the tech you were hired for and the constellation of technologies they use that interact with those things in any way. As soon as you start discovering XY Problems you find they were trying to get you to make X happen because they don't know how to do Y (or didn't know Y was possible) and the clock is ticking.

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

#172

Post by jimbokun »

kurthr wrote: post #49
btilly wrote: post #19

To his suggestions, I have another. Offer internal Dutch auctions on a regular basis to provide an opportunity for investors/the company/etc to buy stock from employees at a reasonable price. This makes the value of the company, from the point of view of the employee, not "funny money" but something very tangible. With an opportunity to cash out long before it is public.

I'd be very careful with that... there are all sorts of internal/external events that can influence the perceived value of the company and information about them is not evenly distributed. Creating an environment where individuals in some groups can profit from this disparity (or even misinformation) is asking for ugly office politics.

Interesting, "insider insider" trading then, where some insiders are more inside than others.

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

#173

Post by CalChris »

maxxxxx wrote: post #156
CalChris wrote: post #144

Earlier quoted context omitted.

You can't. That is what distinguishes you from a VC. Actually, you can. Serially. Plenty of people work for a startup through its early stage. A year here, a year there. That's diversification.

But how do you determine when it's time to jump ship? A year seems awfully short to make that determination.

If your object is diversification of your investment then one year isn't too short. However, typically your option vests monthly after the cliff. So you don't have to stay for two years unless you want to.

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

#174

Post by ankit219 »

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…

Maybe, one more in valid reasons.

- Less politics, and more autonomy (if you are given a certain role). - The dopamine or kick that comes with solving problems and the joy of getting results fast. Quite a few occasions, I have felt more involved in a startup than a big MNC. Maybe different kind of culture. (Consulting is the worst in case you like to see results for your ideas though)

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

#175

Post by 666lumberjack »

jessaustin wrote: post #132
dnautics wrote: post #108

Earlier quoted context omitted.

Nobody ever said that about the As!!

I'm pretty certain I've heard Amazon described as "evil". Apple are less objectionable, but I'm sure there are some things that some body wouldn't like.

Most plausibly their:

- Attitude to third party repair

- Puritanical content restrictions

- Apparent disdain, in many cases, for their 'power users'

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

#176

Post by JohnFen »

I've never really considered stock options to be a good deal, really. There's a reason they're widely referred to as "wallpaper".

Options are a bit like lottery tickets. All other things being equal, it's marginally better to have them than not, but their existence has never affected my decisions about where to work.

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

#177

Post by philsnow »

nostrademons wrote: post #118
matthewowen wrote: post #71

Earlier quoted context omitted.

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…

You pay for it in commute time, though. I just checked Zillow; the houses that are anywhere within walking distance of BART go for $1.7-$2.8M, with the $1M homes clustered near the freeway. Driving across the Bay Bridge into SF can easily take an hour; hell, I know people who've been stuck on the bridge for over an hour.

I started a remote job in August (8 months ago) and I've saved about 400 hours of commute time since then.

(~2.5 hours / day) x (~20 work days / month) x (8 months) = ~400 hours

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

#178

Post by joshuakcockrell »

thesausageking wrote: post #21

He glosses over an important point: it's now typical for founders to take money off the table as part of financing rounds, sometimes as early as the A round. Founders will request it as part of a funding round and, there's so much competition to invest in the top startups, that VCs go along with it. Decades ago, this wasn't the case. Founders waited for the IPO like employees. If you're an engineer sitting on $5m of…

One problem with this is that later round investors usually want their investment to go into growing the business, instead of paying off employees. So the incentives aren’t aligned here to allow employees to sell their stock while the startup is still private.

Employees are also not usually invited to the investor meetings where these types of negotiations would take place. They would probably need the founders to vouch for them to make this happen.

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

#179

Post by rhizome »

enjo wrote: post #129
mdorazio wrote: post #43

Earlier quoted context omitted.

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…

Yes startups will give you more responsibility, but that comes at the cost of far less mentorship. I often wonder if people only feel like they're growing faster at startups because the results are a bit more visible. It is true that it's easier to be stagnant as an associate at a larger company. If you're not interested in taking on new challenges you can generally sort of fall through the cracks. However, folks who…

* If you're not interested in taking on new challenges you can generally sort of fall through the cracks.*

BigCo titles are much more narrowly defined, so most of the time you can't even see the parts that might have new challenges...or cracks.

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

#180

Post by opportune »

defen wrote: post #153
matthewowen wrote: post #71

Earlier quoted context omitted.

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…

> Berkeley has pleasant single family homes in a great school district around the $1MM mark. You can absolutely do that on $200k/year. Let's say you make $200k/year and manage to put together a $300k down payment and get a $700k mortgage at 3.8%. Here is the breakdown of your annual spending (using 2018 numbers): $18,500 to 401K $35,930 in federal income tax $10,593 in FICA (Social security and medicare) $13,724 in C…

Since we've already accounted for all housing and car payments (btw, your car ownership costs are way too high as a lower bound. I would say an decent $10k car you hold on to for 5 years at a time would have total annual costs closer to $5/year) that doesn't sound bad at all
Post reply on HN