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At Booming Toptal, No Stock for Employees or Investors

theinformation.com

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Re: At Booming Toptal, No Stock for Employees or Investors

#111

Post by tedsanders »

charlesdm wrote: post #100
jedberg wrote: post #91

Earlier quoted context omitted.

That's not exactly how it works. They give you a total comp number, and then you choose the cash/equity ratio yourself, which you can change each year. A lot of people chose the all cash option because they didn't understand there equity option, so they changed it to give everyone a little bit of equity regardless, but you can still opt to get extra equity in lieu of cash, and change that election every year. I think…

Don't you pay tax when you actually get the equity? How is it different to getting cash and then just buying the stock?

It's different in that at Netflix the equity comes in the form of non-transferrable 10-year options which do not trade on any market. Furthermore, the option premium is estimated by Netflix at fixed at a constant value, rather than being set by a market.

If it was straight stock, then yes it would be rather equivalent to getting cash and then buying stock right away.

Re: At Booming Toptal, No Stock for Employees or Investors

#112

Post by dang »

nemetroid wrote: post #87
dang wrote: post #84

This was posted yesterday, but the article was hard-paywalled. We asked The Information if they would unlock it for HN readers, as they have been doing recently (e.g. https://news.ycombinator.com/item?id=20630974 , https://news.ycombinator.com/item?id=20423483 ). They agreed, so now that HN readers can actually read the article, we rolled the clock back on this discussion. Edit: sorry, I pasted in the wrong link so i…

What does "hard-paywalled" mean? It's still paywalled to me, even though the link has utm_source=hackernews and the browser sent a Referer header.

It means there are no workarounds.

I think I swapped in the wrong link—sorry. Should be fixed now.

Re: At Booming Toptal, No Stock for Employees or Investors

#113

Post by aylmao »

Is striking not an option for Toptal's employees? I imagine, especially at the size the company is operating, it'd probably be a very effective way for employees to make their voice heard and have negotiating leverage.

Plus, this seems to apply to all employees. Not even the co-founder had shares— this guy seems to be alone at the top.

Re: At Booming Toptal, No Stock for Employees or Investors

#114

Post by spamizbad »

lbatx wrote: post #86

Well, if you want any further insight into the CEO, check out Toptal's investment page: https://www.toptal.com/investors . He minces no words and comes off quite aggressively. Very much a "my way or the highway" tone to that page. They seem sort of like StackOverflow or Basecamp from a bootstrap perspective, without the warm fuzzy feeling you get from interacting with either of those companies.

I don't agree with him, but it's refreshing. I'd take inartful honesty over bullshit artistry any day of the week.

Re: At Booming Toptal, No Stock for Employees or Investors

#116

Post by ThalesX »

ilikehurdles wrote: post #93
elsewhen wrote: post #47

Earlier quoted context omitted.

FTA: “I was told the conversion [of Toptal into a corporation] would happen in a number of months,” said Aaron Diek, who is based in central Texas and says he worked for Toptal in 2014 and 2015, when Toptal said it was generating $80 million in revenue per year. “I asked on a number of occasions, and the answer [from Du Val] was always ‘it’s coming, it’s coming.’

This seems to be par for the course for any startup that drinks its own Kool-aid. I've been told many times at every organization I've been at by enthusiastic co-workers believing the exit is right around the corner. It never was and all of those previous orgs have either gone bankrupt or had really unfavorable acqui-hires. I believe in enjoying my work environment, being paid fairly, and doing work that positively i…

I also use this approach and I love how little leverage equity brings them to the negotiation table. You want to give me equity, nice, but I'm still working for my preferred salary under my preferred conditions.

Re: At Booming Toptal, No Stock for Employees or Investors

#117

Post by robocat »

bwoj wrote: post #68
hmahncke wrote: post #65

How is "all of Toptal’s stock [is] in the hands of one person" when Toptal "attracted funding from well-known investors including Andreessen Horowitz." Doesn't funding from a16z typically end up with a16z owning stock? [unfortunately can't read the whole article behind the paywall]

The funding was in convertible notes which convert to equity in the next funding round. Presumably these agreements don't have any provisions for other exits.

In which case the investors have not been screwed because they are sophisticated enough to know the possible outcomes - that's just business.

I suspect the VC team would say "well played that man".

Re: At Booming Toptal, No Stock for Employees or Investors

#118

Post by user5994461 »

spitfire wrote: post #88
lbatx wrote: post #86

Well, if you want any further insight into the CEO, check out Toptal's investment page: https://www.toptal.com/investors . He minces no words and comes off quite aggressively. Very much a "my way or the highway" tone to that page. They seem sort of like StackOverflow or Basecamp from a bootstrap perspective, without the warm fuzzy feeling you get from interacting with either of those companies.

The guy may be a class A A hole, but I really like that message. Like, really like it. He's essentially saying "yes, I know the shenanigans you play, and I'm not going there." Though, I doubt it's a business that will "scale to tens of thousands of employees around the world". That seems like a reach.

It's a recruiting agency. It's not scalable by design.

Re: At Booming Toptal, No Stock for Employees or Investors

#119

Post by skim_milk »

hitekker wrote: post #110
skim_milk wrote: post #106

Earlier quoted context omitted.

I worked at a startup company for a year in the Midwest that was in the exact same situation, growing 50% YOY with only a little pocket change for speed funding all owner by the founders. The founders had the same exact idea, founders own 100%, employees own nothing, and they wanted to tell everyone how awesome they were because of it. Key difference was that apparently our city's chamber of commerce that had a lot o…

> We don't coast https://www.omahachamber.org/wedontcoast/why/ A lot of defensive answers to obvious questions. The slogan may be completely positive in its inception, but I'd wager it's catching on for deeply negative sentiments. Similar to Midwestern right-wingers referring to people from California as "Foreigners".

So there's plenty of history behind the four... five? catchphrases they've been trying to use (and I think they gave up on catchphrasing for now). But for a time they wanted to stop the brain-drain coming from the uppity hipster areas going to SF and friends so they used we don't coast to keep the brains here and the white collar economy strong. Then the all craft beer came and we stayed here so the slogan became history. It wasn't about white dog whistling afaik

Re: At Booming Toptal, No Stock for Employees or Investors

#120

Post by a13n »

elsewhen wrote: post #15
WheelsAtLarge wrote: post #13

I'm I missing something? It seems to me that everyone involved knew what they where getting into specially the investors. You hear about the cases where founders get screwed all the time. This is a case where a founder gets to keep his company. Good for him. I for one think it's a bit greedy after all he did not build the company all by himself but silicon valley investment is all about greed. It's just another day.

Luring employees with promises of equity and then not delivering sounds like a bait and switch.

It sounds like fraud.
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