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Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

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Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#221

Post by ryandrake »

polote wrote: post #27
Fordec wrote: post #16

Earlier quoted context omitted.

Very few startups are FAANG level funded. Why work for a startup and commit your soul to the effort for half what the big boys are paying? And far, far less risk of the company going bust in the next two years.

This is the most common error people on HN make. This is not startup VS FAANG. A small percentage of people make FAANG salary. A startup is mostly paying as much as any other company

> A small percentage of people make FAANG salary.

Also, keep in mind that only a small percentage of FAANG employees have the nosebleed-high comps people frequently quote here. So, we are talking about a small percentage of a small percentage.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#222

Post by mlthoughts2018 »

jariel wrote: post #135
mlthoughts2018 wrote: post #56

Earlier quoted context omitted.

Then you have an extremely rare experience. It’s like a professor who did happen to get tenure listening to all the post docs talking about how awful academia is. I’m happy for that one lottery winner but their experience doesn’t count for anything.

Totally the opposite. Most startups are dynamic, most big corporations are not. They are 'big' because they are sitting on a value chain monopoly. The same chocolate bars have been in my grocery aisle for 20 years. Variations on the same soap. Some startups are very poorly run, but most are not led by 'unrestrained jerks'.

No, it’s not like this. Most startups promise to be dynamic as a tactic to pay people less and swindle them on poor options deals, then they bait and switch you, the work experience is not as advertised.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#223

Post by JMTQp8lwXL »

PragmaticPulp wrote: post #147
mensetmanusman wrote: post #102

The recent HN article on meritocracy comes to mind. I had never considered it this way in the past, but in the 70’s, productivity started decoupling massively from productivity gains. I.e. the best people at finance (meritocracy) figured out how to capture all the new earnings relative to the workers (who didn’t know this game was going on). This has snowballed into a situation where the financial meritocracy is comp…

Blaming bankers and proposing revolution is one of those explanations that sounds satisfying but doesn’t really match the evidence. In some ways, as markets have become more efficient and transparent it becomes harder, not easier, for finance people to simply squeeze money out of the systems through financial tricks. We’re also living in a world where interest rates are at historical lows, making the cost of capital…

Credit cards are a ~2% tax on the economy. I think they're squeezing quite well still, but as has been historically shown, the number and depth of those sorts of opportunities declines with time.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#224

Post by mlthoughts2018 »

dasil003 wrote: post #84
mlthoughts2018 wrote: post #32

Earlier quoted context omitted.

I’ve never heard of any startups where you can obtain faster skill or personal growth. “Wear many hats” means you must be whatever type of firefighting janitor the company needs this week, which often causes skill atrophy not skill growth. Larger companies not only offer better compensation, but usually offer much better career development, responsibility growth, training and “learn by doing” opportunities. The start…

Big corporations will give you more opportunity to “learn by doing” than a startup? Hard to take your comment seriously when you say something like that.

I can tell you haven’t worked in many startups. The work quality is poor - you are basically firefighting all the time. You’re certainly not building new systems or learning how to scale, etc.

If you work at a startup the trick is you have to take the 5% of your work that’s interesting and try to make it seem like that was the 95%, when in reality the 95% is doing all the grunt work because the company cannot scale staffing to distribute that work evenly or according to specialization.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#225

Post by [deleted] »

jonathankoren wrote: post #206
cushychicken wrote: post #181

Earlier quoted context omitted.

Are you still susceptible to this if they are ISOs? My understanding is that ISOs are only ever taxed at the time of sale. Sounds like you're dealing in an ISO quantity beyond the limits my mind can comprehend though.

He’s being hit by the AMT due to the value of the options. If you’re hit by the AMT, you’ll owe taxes on the spread between the strike and FMV on exercise, even though you haven’t sold them.

[deleted]

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#226

Post by deeeeplearning »

BowBun wrote: post #112
TuringNYC wrote: post #110

Earlier quoted context omitted.

>> I don't buy this explanation. Very few employees are paid in any financially complex way. It depends on the class of workers. I'd agree with you w/r/t most wage earners being paid in transparent manner. But I think the GP comment was referring to technology workers (given the context of HN.) In the case of tech workers, many are paid in very complex ways. If you have illiquid stock options in a private company, an…

> if you have taken a below-market salary as many startup employees have I think this is part of the startup mythos. At the three startups I've worked at (~10 people), none of us had to sacrifice competitive salaries for stock options. The options were on top to incentivize staying at the company longer. I wonder how common it actually is for people to take significant paycuts in 2020 for a startup opportunity (found…

>none of us had to sacrifice competitive salaries for stock options.

Does this map to reality? Are you saying that if you were at Google making 250K in TC the Startups were paying you 250K Base salary + stock options? That seems ludicrous.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#227

Post by fennecfoxen »

pm90 wrote: post #211
travisoneill1 wrote: post #107

Earlier quoted context omitted.

I don't buy this explanation. Very few employees are paid in any financially complex way. Wages dropping overall must have a different explanation, which I suspect is an increase in labor supply due to women entering the labor force and illegal immigration combined with a decrease in demand due to automation.

Stagnating wages for the middle class is a well known problem but most economists currently believe that it’s roots lie in the erosion of labor unions, stagnation of minimum wages and fiscal austerity measures. Illegal immigration specifically has been called out as something not making a big enough effect to warrant attention.

“Most economists” are not quite so overtly political about it like this. There are of course many factors; globalization and trade is a big one affecting both labor and labor union power: competition from overseas, direct or indirect, easily eclipses competition from immigrants. The thing is that trade also has massive benefits to real wages, and has boosted national output substantially. Nuanced discussions will try to examine this tradeoff.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#228

Post by mlthoughts2018 »

Nimitz14 wrote: post #77
mlthoughts2018 wrote: post #56

Earlier quoted context omitted.

Then you have an extremely rare experience. It’s like a professor who did happen to get tenure listening to all the post docs talking about how awful academia is. I’m happy for that one lottery winner but their experience doesn’t count for anything.

Lol, have you considered it might be you who had the extremely rare experience?

If it weren’t for all the ubiquitous articles talking about bait and switch startup jobs, poor startup compensation, cheating founders, controlling VCs, slave driver mentality, rip off stock options, and the poor survivability of companies, you might have a point.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#229

Post by Mauricebranagh »

ryandrake wrote: post #221
polote wrote: post #27

Earlier quoted context omitted.

This is the most common error people on HN make. This is not startup VS FAANG. A small percentage of people make FAANG salary. A startup is mostly paying as much as any other company

> A small percentage of people make FAANG salary. Also, keep in mind that only a small percentage of FAANG employees have the nosebleed-high comps people frequently quote here. So, we are talking about a small percentage of a small percentage.

Not if you compare like for like in say London FANG's pay very well even at the base salary.

Re: Startup Stock Options – Why A Good Deal Has Gone Bad (2019)

#230

Post by an_opabinia »

lisper wrote: post #219
PragmaticPulp wrote: post #147

Earlier quoted context omitted.

Blaming bankers and proposing revolution is one of those explanations that sounds satisfying but doesn’t really match the evidence. In some ways, as markets have become more efficient and transparent it becomes harder, not easier, for finance people to simply squeeze money out of the systems through financial tricks. We’re also living in a world where interest rates are at historical lows, making the cost of capital…

> doesn’t really match the evidence Here's some data: https://www.pewsocialtrends.org/2020/01/09/trends-in-income-... Something is driving down wealth at the low end while driving it up at the high end. It seems unlikely in the extreme that this a reflection of actual value produced by people at the high end relative to those at the low end. Much more likely is that this is a reflection of some kind of structural pro…

You could just punch income inequality into Google Scholar or Google Books and learn at least 100 ways capital concentration or poverty is perpetuated, via the natural experiments of many rich western countries and US states.
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