If founders treated their investors the same way they treated their employees • Hacker News Board

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

#121

Post by richardbrevig » Tue, Aug 18, 2020, 5:04 PM UTC

quickthrower2 wrote: post #119

owenmarshall wrote: post #111

Earlier quoted context omitted.

Knowing your BATNA is critical for negotiating anything, including employment. One of the best ways to accomplish this is to avoid shopping for a job when you’re unhappy with the one you have; when your best alternative is “I keep working at the place I like with the people I’m on good terms with” it’s far easier to start from that no and let yourself be convinced.

You can always bluff. I don’t think people do this enough! I mean a shit job is still a BATNA, and you simply don’t tell the next guy you hate the job. Which is as good as you loving your job and “just dipping my toe in the market” from a negotiation point of view.

I don't believe he's talking about the employer, he's discussing the emotional well-being a job seeker would need. If the job seeker hates their own job, they're more likely to jump from one bad situation to another bad situation.

But you're right, and I've done that myself. Where I hated a job so badly and just pretended and smiled as much I could until someone hired me out of that situation.

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

#122

Post by VRay » Tue, Aug 18, 2020, 5:05 PM UTC

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…

> Repeatedly bringing up how much the game is rigged doesn't really do much to change anything.

Au contraire! I stumbled across one of these semi-monthly kludgeposts with a comment section full of angry people early in my career, and it helped me avoid getting mired in any bad startup situations.

I think that getting the word out about this stuff is one of the best things we can do, since it'd be really hard to try and legislate this problem away

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

#123

Post by borski » Tue, Aug 18, 2020, 5:06 PM UTC

Early exercise and ISOs fix a lot of these problems.

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

#124

Post by dlubarov » Tue, Aug 18, 2020, 5:08 PM UTC

technofiend wrote: post #77

seibelj wrote: post #10

I 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 e…

I'm surprised a secondary market hasn't sprung up that lets you cash out options and pay the taxes via a margin loan of some kind. I guess the risk is too high that the options will end up worthless.

There are some companies that facilitate this, like EquityZen and Forge Global. It seems to be a legal gray area, since the options are legally non-transferable, so creatively structured contracts are used in an attempt to work around that.

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

#125

Post by giantg2 » Tue, Aug 18, 2020, 5:09 PM UTC

vlunkr wrote: post #87

lkbm wrote: post #66

Earlier quoted context omitted.

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…

Both of these comments make good points, but are two ends of a false dichotomy. Not every startup is going to have horrible work/life balance, and not every job at a big company is going to be boring and soul crushing. And there are all sorts of jobs in the middle and to the side of this spectrum.

I'd even say it's more specific to the individual and not just the job. I have a boring, soul crushing job, but to someone else it might be their dream.

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

#126

Post by giantg2 » Tue, Aug 18, 2020, 5:11 PM UTC

hehsjsbb wrote: post #110

high_derivative wrote: post #84

Earlier quoted context omitted.

'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.

Politics isn't just about promotion. It's about what kind of work people get to do, whose opinion is respected, etc. I don't care about getting promoted in my current role (at a small start-up where the eng org is flat), but I'm miserable because there's obviously a clique of people who are "trusted" and take over the technical direction of anything interesting. What's left is basically just implementing their ideas…

Well said. I feel your pain.

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

#127

Post by giantg2 » Tue, Aug 18, 2020, 5:15 PM UTC

mdorazio wrote: post #63

skrebbel wrote: post #41

Earlier quoted context omitted.

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.

The difference is percentages. I am highly confident that if we looked at a large number of high-growth startups and then at the top ~10 paying tech companies and compared the work/life balance, the disparity would be abundantly clear. In other words, you are much more likely to have good work/life balance at a large tech company than at a high-growth startup. Individual examples to the contrary will obviously exist…

I'm an average employee. I am likely to see shitty stuff throughout my career.

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

#128

Post by dilyevsky » Tue, Aug 18, 2020, 5:15 PM UTC

pb7 wrote: post #85

Swizec wrote: post #65

Earlier quoted context omitted.

Personally I like to work with startups because: - they pay more than enough for my near-term financial goals - the equity is ok - they let me work on sidehustles - I get to work on stuff that is truly make or break for the company, not some bullshit pet project a PM needs to get promoted

Wouldn't it feel like it's a little bit bullshit if the company went out of business shortly after and all that work was for nothing? All of our work is so ephemeral.

Same happens in big cos when sometimes hundreds or more engineering years are scrapped purely because of internal political wars or “reorgs”

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

#129

Post by xur17 » Tue, Aug 18, 2020, 5:17 PM UTC

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…

> Someone who is just getting into tech may be allured by a 50k salary and "1 MILLION OPTIONS!!!!"

This reminds me of a job offer from a startup I interviewed with that offered me a specific number of options, but wouldn't tell me anything that I could use to value them, effectively forcing me to value them at $0.

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

#130

Post by cs-szazz » Tue, Aug 18, 2020, 5:19 PM UTC

chii wrote: post #95

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.

100% agree. I'm in the low 7-figures right now (on paper), and will probably be mid-7 with the next round of funding. So I have 0 chance of affording the taxes if I wanted to leave, and am kind of at the whim of the board if they want to extend my window.

It's not a great feeling, especially when you contributed a lot to the company at a very early stage. I am glad there's companies popping up to help with this problem, like ESO Fund, but in my opinion the companies should be trying to fix this instead.