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At Booming Toptal, No Stock for Employees or Investors

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

#121

Post by mygo »

lbatx wrote: post #108
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…

>He sounds like an asshole but really being able to work for a privately owned fast growing company without shitty options being paid well is pretty great in the tech world. But not as great as working for a privately owned fast growing company with good options and being paid well, no? (And if not options, strictly speaking, how about profit sharing?) Source: I run a bootstrapped software development company and eve…

Is being paid well not good enough? Companies tend to give out stock as part of a package in lieu of all cash. If you have all you want in cold hard cash, what’s the problem?

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

#122

Post by oh_sigh »

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.

Conditional promises of equity, where the conditions were never met.

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

#123

Post by thegranderson »

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.

This is almost certainly not written the way it is because he is an asshole (though I have no idea, he might be), but rather because investors seeking to make an investment can be a massive waste of time. They'll say they are open to your terms, but then try to negotiate once you're down the path. A self-funding, growing company has no need for investors, and that situation is not where venture capitalists typically find themselves - usually the companies need cash and VCs have power. It is more typical for PE firms, but usually only when founders want to cash out (or at least begin cashing out) - obviously he's not there yet.

I've seen other companies who have clearly wasted a bunch of time with investors before and have to be super clear about their situation to prevent more wasted time, e.g.: http://buildinglink.com/marketing/public/investors

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

#124

Post by munk-a »

scarmig wrote: post #60
okmokmz wrote: post #36

Earlier quoted context omitted.

>lured into the company with the promise of a big payoff if it became successful. Sounds par for the course for startups

Yes, but usually the employee sees something if the company is successful. It's like playing Powerball, winning, and then the lottery agency saying "just kidding."

Not really... usually the employee sees nothing. I also don't know if the employee really deserves to see anything - lots of people work dev jobs and see nothing over salary for it, why should you make bank if you did you job just as well but happened to be in a wildly successful company... Concurrently I think that founder compensation is absolute BS at the moment, their contributions to success are far less effective than their compensation would suggest.

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

#126

Post by chao- »

jiveturkey wrote: post #105
spitfire wrote: post #88

Earlier quoted context omitted.

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.

The content is fine. It's obviously spurred by experience or by an influx of offers. The presentation is shite. Just have an autoresponder. It reeks of Netflix' culture deck.

The term "reek" is normally negative in connotation. I have seen (at least on HN) the famous Netflix culture documents praised as straightforward method to assist in defining culture. Not that it "solves" culture in some magical, systemic way (i.e. naive founders saying "Look we have a culture deck, culture done!"), but still have only heard it referenced as a useful communication tool.

So having never seen it spoken of poorly, I am interested in your perspective.

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

#127

Post by [deleted] »

tschwimmer wrote: post #56
novok wrote: post #48

Earlier quoted context omitted.

But now the strategy is known, it would be harder for everyone to get investors and employees to even agree to work with him for any conditional future promise of equity on something like investment.

That's true. But it's not this guy's problem. He's super rich and therefore isn't interested in raising more money. I guess it's sort of like a tragedy of the commons type situation.

[deleted]

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

#128

Post by aianus »

sidlls wrote: post #76
jameslk wrote: post #39

Earlier quoted context omitted.

I've had a few projects from them, one very large with a Bay Area client spanning a year. In the early days they would suggest a lower rate but now they change it to whatever I ask. I'm not sure what your rate is, but mine is competitive with Bay Area agency rates. Definitely better than Upwork (Elance) since I wouldn't be able to find the type of enterprisey clients I find on Toptal.

When I was doing it they claimed that $65 per hour was a "good" rate for the Bay Area, and constantly pressured me to lower my rate to that. There were a few clients with names anyone here would recognize, but they were looking on Toptal specifically to get cheap labor for poorly specified work. Most of the clients were more like the stereotypical E-lance "small business" (read: one-person operation looking for cheap…

> $65 per hour was a "good" rate for the Bay Area

I'm confused, I thought Toptal workers were remote. Why would your location factor into the rate a client is willing to pay?

FWIW I charged even less than that as a remote contractor and it goes really, really far in countries like Vietnam or Thailand.

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

#129

Post by TuringNYC »

novok wrote: post #48
tschwimmer wrote: post #12

A lot of Sillicon Valley startup fundraising ends up resembling an iterated prisoner's dilemma. Most startups fail and it's likely that you might have to work with people a few times before you get it right. The [generally] dominant strategy for Iterated Prisoner's dilemma is tit for tat[0], and consequently you see a lot of people cooperating when when it might be more lucrative to defect is because they know that t…

But now the strategy is known, it would be harder for everyone to get investors and employees to even agree to work with him for any conditional future promise of equity on something like investment.

>>But now the strategy is known, it would be harder for everyone to get investors and employees to even agree to work with him for any conditional future promise of equity on something like investment.

Seemed to work fine Anthony Levandowski

ttps://www.wired.com/story/god-is-a-bot-and-anthony-levandowski-is-his-messenger/?verso=true

From the article, note how Levandowski pulled the stunt below and managed onwards to Otto:

In early 2011, that plan was to bring 510 Systems into the Googleplex. The startup’s engineers had long complained that they did not have equity in the growing company. When matters came to a head, Levandowski drew up a plan that would reserve the first $20 million of any acquisition for 510’s founders and split the remainder among the staff, according to two former 510 employees. “They said we were going to sell for hundreds of millions,” remembers one engineer. “I was pretty thrilled with the numbers.”

Indeed, that summer, Levandowski sold 510 Systems and Anthony’s Robots to Google -- for $20 million, the exact cutoff before the wealth would be shared. Rank and file engineers did not see a penny, and some were even let go before the acquisition was completed. “I regret how it was handled…Some people did get the short end of the stick,” admitted Levandowski in 2016. The buyout also caused resentment among engineers at Google, who wondered how Levandowski could have made such a profit from his employer.

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

#130

Post by skinnymuch »

baron816 wrote: post #67

I don’t feel that bad for the investors, or really even the employees. A lot of startup equity is worthless anyway. But screwing over your cofounder and COO—your partner who’s been on the frontlines with you effectively running the company for eight years—that’s incredibly scummy. That’s a real psychopath move. How can someone be so greedy?

Like Snapchat, Twitter amongst many other companies co-founders have done? Or bands like the Beatles?
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