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If founders treated their investors the same way they treated their employees

software.rajivprab.com

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Re: If founders treated their investors the same way they treated their employees

#91

Post by bquinlan »

lkbm wrote: post #66
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…

Main reason: it's more fun. I could be a cog in a giant corporate machine, or I can have a measurable impact where I work. I can stay in my lane and do my specific job tasks, or I can run around putting out fires and helping wherever help is needed. I mindlessly build the specific design product handed me, or I can guide my own work in accordance to the needs of our customers and the business. I can follow policy and…

>I could be a cog in a giant corporate machine, or I can have a measurable impact where I work.

I think that point can support working for either a big company or a small company depending on what type of impact you are looking for.

I've worked for startups in the past and have had a huge impact on the startup but almost no impact on the outside world because the startups just weren't tackling very visible problems.

Now I work for Google and I have basically zero impact on Google i.e. basically nothing that I can do will ever move the dial in terms of Google's revenue, etc. But I've worked on several projects that have had a big impact outside of Google. For example, I was on a small team (3 people) that developed the Python 2.7 runtime for App Engine (this was a while ago) and I was on another small team that implemented the server-side infrastructure for the Google Home. I also developed the screensaver for Chromecast - which is a tiny tiny project - but still millions of people love it.

Re: If founders treated their investors the same way they treated their employees

#93

Post by chii »

smattiso wrote: post #90
nostrademons wrote: post #86

So founders do treat some of their investors like this - look at every ICO, and a lot of dumb overseas money, and a good number of friends/family/fools rounds. And conversely, there are some employees that they treat with kid gloves, who basically get the investor treatment. Look at executive hires. The difference is basically two letters: "No". Most institutional investors have the ability and inclination to say no…

The problem is that some people need money and can't say no. That's why anybody works for minimum wage... The executives and investors and FAANG engineers have all made good money and seen decent RSU terms, you can't pull the wool over their eyes. Someone who is just getting into tech may be allured by a 50k salary and "1 MILLION OPTIONS!!!!" (There are ten trillion in the option pool). I think engineers would do wel…

> The problem is that some people need money and can't say no.

If they need money, and this is the best offer they got, then what's the problem with accepting it? They are still better off than not accepting it.

Re: If founders treated their investors the same way they treated their employees

#94

Post by HelloNurse »

skrebbel wrote: post #41
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…

Frankly I'm getting tired of this drum HN keeps beating about startups not offering a good work/life balance. Some startups don't, true. Some FAANGs don't either, what's the difference? I know plenty of startups that have a sane working culture as a key point of differentiation in the job market.

This article is about work/money balance and specifically money/money balance.

Re: If founders treated their investors the same way they treated their employees

#95

Post by chii »

cs-szazz wrote: post #71

This hits home. I'm a fairly early employee at a unicorn, with no exit in sight. I've talked to the cofounders about extending my exercise window, and got the response of "We can probably do that when the time comes". Of course if that turns out to not be the case, well then I'm now stuck leaving behind a huge portion of my equity to cover the taxes, assuming I can sell to cover. Love that this seems to be getting mo…

Options being dangled in front of employees to trick them (only later to find out they can't afford to exercise it) is infuriating - it's almost fraud imo.

Re: If founders treated their investors the same way they treated their employees

#96

Post by znpy »

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…

So far I stayed away from both startups and consulting companies (Accenture, NTT Data and similar) and it went fairly well.

One day I'll reconsider this choice, probably when I'll have a bit more of financial stability (read: bought a house and paid it in full) and can afford some more risk.

Most people seems to overlook the fact that most startups die within a year, and some more startups drag a long death march before dieing.

You might have fun or do crazy interesting things, but if the company goes bust it might not be pretty.

For the moment, I'll stay conservative about this kind of things.

Re: If founders treated their investors the same way they treated their employees

#97

Post by qntty »

mdorazio wrote: post #69

Always absent in these kinds of essays/posts is the reason why startups are able to get away with this. If it didn't work, obviously the options games would have stopped a long time ago. A lot of people don't want to admit that there's a small army of young, naive employees who are enamored with startups and are perfectly willing to sign up for below-market salary and extremely unfavorable options terms in exchange f…

It's also possible to pass laws that protect employees

Re: If founders treated their investors the same way they treated their employees

#98

Post by smattiso »

chii wrote: post #93
smattiso wrote: post #90

Earlier quoted context omitted.

The problem is that some people need money and can't say no. That's why anybody works for minimum wage... The executives and investors and FAANG engineers have all made good money and seen decent RSU terms, you can't pull the wool over their eyes. Someone who is just getting into tech may be allured by a 50k salary and "1 MILLION OPTIONS!!!!" (There are ten trillion in the option pool). I think engineers would do wel…

> The problem is that some people need money and can't say no. If they need money, and this is the best offer they got, then what's the problem with accepting it? They are still better off than not accepting it.

No problem with that. The problem I have is with selling people bullshit golden promises of wealth when that is mathematically impossible given the cap table. Just don't even offer equity at all at that point so employees aren't deluded.

At this point I know what I'm doing enough to not get burnt by these types of scams, and when I was an engineer I was lucky to basically work for FAANGs the whole time where they are very charitable to employees. But when I was 23 I didn't have the knowledge to evaluate pre-ipo equity and some startups prey on this information imbalance to delude people.

Re: If founders treated their investors the same way they treated their employees

#99

Post by [deleted] »

high_derivative wrote: post #84
drchopchop wrote: post #53

Earlier quoted context omitted.

Agreed, I am 40+ and am a CTO at a startup which has great work/life balance. We pay approximately market (for a normal dev job, not FAANG), haven't had people do overtime in well over a year, are transparent about finances, and have practically zero politics. It is also possible for a startup to be "stable", especially if it's bootstrapped/profitable.

'have practically zero politics' tingles my bs-meter. How would you know how your employees feel about this? There is always politics. Of course not for the ones who cannot be promoted further, but for everyone else. My boss not acknowledging the existence of politics would be a red flag to me.

[deleted]

Re: If founders treated their investors the same way they treated their employees

#100

Post by trimbo »

marcinzm wrote: post #68
trimbo wrote: post #64

Earlier quoted context omitted.

Uber employees who joined in 2015 actually saw their RSUs decrease in value by the time the lockup ended in 2019. 4 years of working at a pre-IPO unicorn for negative growth. Heard this from multiple people but here's an article: https://www.financialsamurai.com/how-uber-employees-failed-t...

That depends totally on the RSU package they got when they joined. Negative growth if the package was 50% higher than their previous or FAANG comp is still a net gain.

If it was 50% higher when they were hired, they still probably made less. All FAANG stocks climbed 100+% over the same timeframe. Amazon, 500%.

[Edit] But... I think you might have missed the point. The reason to join a pre-IPO company is to make far more money post-IPO when the stock rises. Joining Facebook in 2008 or Google in 2000 would be equivalents here, and those people became very, very wealthy on the day of the IPO due to this pop vs when they joined. Uber employees who joined 4 years before IPO had their stock drop instead.

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