If founders treated their investors the same way they treated their employees
software.rajivprab.com
If founders treated their investors the same way they treated their employees
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Re: If founders treated their investors the same way they treated their employees
#2> Investor: So, 0.1% of your ($10M) company works out to $100,000
Isn't that actually $10,000, or is there some startup valuation math that I'm not aware of?
EDIT the article has since been updated with new numbers, and the math now works out as expected
Re: If founders treated their investors the same way they treated their employees
#3Valid 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, whatever) and they are willing to go this route.
Invalid reasons for working at a startup:
- Getting rich off stock options.
- Making a lot of money in salary.
- Work / life balance.
- Stability.
Re: If founders treated their investors the same way they treated their employees
#4Good read. I like the new story format to rehash the lively startup vs big tech employment debate on HN.
It could almost use a part 2 to explain aspects of the conversation (how is the employee making a $300k investment, preferred stock, etc), but I don't think anyone is missing the joke.
The story format makes it clear how employees are getting a worse deal than investors. Still, employees receive cash dividends every few weeks (a salary), isn't that a positive?
Re: If founders treated their investors the same way they treated their employees
#5That 90-day expiry window is the most archaic bullshit. Can't come up with 200K cash? Too bad, and thanks for all that hard work and long hours you put in.
Re: If founders treated their investors the same way they treated their employees
#6This hits me right in the tendies. How many times have I had this conversation to no avail
Re: If founders treated their investors the same way they treated their employees
#7> Investor: So, 0.1% of your ($10M) company works out to $100,000 Isn't that actually $10,000, or is there some startup valuation math that I'm not aware of? EDIT the article has since been updated with new numbers, and the math now works out as expected
Read the rest of the article.
Re: If founders treated their investors the same way they treated their employees
#8Bravo bravo bravo! This piece neatly encapsulates all the problems with ISOs. The biggest one is mentioned at the beginning - information asymmetry. I don’t really understand why most companies, especially small ones less than 100 people, can’t be transparent about their cap table with employees.
I do think the culture around 90 day exercise Windows is changing. Here is a list of companies with extended windows [1]. At this point I would never join a company with 90 day windows.
Re: If founders treated their investors the same way they treated their employees
#9Good read. I like the new story format to rehash the lively startup vs big tech employment debate on HN. It could almost use a part 2 to explain aspects of the conversation (how is the employee making a $300k investment, preferred stock, etc), but I don't think anyone is missing the joke. The story format makes it clear how employees are getting a worse deal than investors. Still, employees receive cash dividends eve…
A salary =/= dividends.
Re: If founders treated their investors the same way they treated their employees
#10I missed over $1 million in options when one of my former companies was acquired. I still made good money but nowhere near the same. I was pretty sure it was going to sell, but I didn't know how long it would take (over 1 year for sure) and nothing in life is guaranteed.
If I had exercised all the options I would have had over $300k in paper gains for a tax bill. Instead I exercised 10% of what I had the ability to exercise. This is one major reason I will never work at a startup again unless I am the cofounder.