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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

#131

Post by chucksmash »

hnbroseph wrote: post #96
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…

> One guy chose 100% equity, and is now retired. being able to choose 100% equity would suggest a particular level of financial independence before even starting. how long did they work without a salary? did they regularly sell equity as a salary-replacement?

Or perhaps a working partner and a willingness to get by on one income. Know a couple who did this in NYC for a couple of years on non-dev salaries and the trade-off definitely opened doors for them.

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

#132

Post by andrewstuart »

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.

It's pretty cool that's there's any company at all able to make such bold assertions.

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

#133

Post by klipt »

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…

Also this behavior might work in the US, but if you screwed over a bunch of rich and powerful people in say, Russia, you'd probably end up having an "accident", changing the leadership of your company to someone more favorable to said rich and powerful.

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

#134

Post by hn_throwaway_99 »

Man, this guy is a sociopath. For everyone (including the CEO) saying "but they all knew what they were getting into", consider why would the CEO even bother putting those terms in there (e.g. the equity on conversion to a corporation - which according to comments in this thread he specifically told employees he would do -, the convertible note terms, etc.) unless it was specifically to deceive the investors and employees.

If that's the way he treats folks who are supposed to be on the same side, I'd hate to see how he treats his enemies.

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

#135

Post by rolltiide »

skim_milk wrote: post #106
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 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…

okay, Omaha, define "paid well" and "paid well without golden handcuffs".

and for the coastal record, "cost of living" means nothing to me when federal thresholds like achieving accredited investor status don't factor that in at all. I'll figure out how to stash away enough dollars getting paid a lot of dollars in a high cost of living area.

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

#136

Post by tigershark »

walshemj wrote: post #31
bnt wrote: post #8

I think the article misses the point: are we now in an era where you actually expect to get stock when you join a company? As a former Toptal employee: IMHO the co-founder in question was widely regarded as a horrible manager, often pushing people to burnout and generally imposing a culture of secrecy and mistrust. The VPs they ousted were nothing better. I personally went through several burnouts while there, but al…

I would expect to get stock if I joined a FTSE 100 company, if not most of the FTSE 350 as well.

Why? I worked in some FTSE100 and Fortune 50 in UK and you just get salary. But you can usually buy stocks at a discount.

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

#137

Post by tedivm »

elsewhen wrote: post #47
staticautomatic wrote: post #20

Earlier quoted context omitted.

But they weren't lured with the promise of equity. The promise was that they'd get equity if there was a subsequent funding round . The investors, especially, have zero right to complain.

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 is exactly what Malwarebytes did to me for years- their CEO constantly told me I was going to get stock but it never materialized.

It's definitely a live and learn situation, but it does suck that learning the lesson is so expensive (while the people who lied their way into having employees end up making out really well for their dishonesty).

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

#138

Post by chucksmash »

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.

Definitely a bait and switch, even if legally it is all above table and the employers should have relied on what the paper said not what people said.

Having that contingency about taking more funding might not create any legal obligations but there is certainly an implication there.

If I cover your tab and you say you'll pay me back next time we go out, "I'm never paying you back" is an equivalent statement if there's an unspoken "but we're never going out again" at the end of the first statement, but it wouldn't be my first interpretation.

---

That said, if an Engineering Director is getting 0.02% then, assuming TopTal is worth $1b, you'd have a Director cashing out at <$200k pre-tax right? I'd imagine run of the mill ICs had a percentage such that they didn't accept it thinking "and when this pays off I'm done forever"

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

#140

Post by PopeDotNinja »

klipt wrote: post #133
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…

Also this behavior might work in the US, but if you screwed over a bunch of rich and powerful people in say, Russia, you'd probably end up having an "accident", changing the leadership of your company to someone more favorable to said rich and powerful.

> ...if you screwed over a bunch of...

That is usually gonna go poorly for you in any culture.

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