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Working at a startup is overrated, both financially and emotionally

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Re: Working at a startup is overrated, both financially and emotionally

#111

Post by hluska »

NeverFade wrote: post #70
hn_throwaway_99 wrote: post #36

I think this is a really good article, but I think that one of the things it misses is that a huge reason the math works out so badly for startup employees is because founders and VCs take the lion's share of the gains. I mean, in my experience at startups, founders typically own around 40% of the equity. The option pool for all other employees is around 10-20%. Now, I certainly believe startup founders deserve far m…

Bingo. As a senior engineer, I get startup offers at the Staff-Principal levels, and even those grant no more than 0.1-0.5% equity at most, on top of ~$180-200k salary. That simply isn't competitive with big established companies like FAANG that offer me $400k+, far better career growth prospects, and far lower risk. For most startups, the equity will be worthless, and the whole company will either shut down or get a…

I'm curious - where do you pay tax on options before they have been exercised?? Every country whose tax system I'm familiar with treats receiving an option as a tax neutral event, but exercising them is taxed as per the country's capital gains legislation.

Re: Working at a startup is overrated, both financially and emotionally

#112

Post by femiagbabiaka »

Almost everything mentioned about startups here has an equivalent trade off at large companies. It’s particularly amusing that he mentions Facebook towards the end as a potential place to work, given the pockets of high stress and long hours that I’ve heard about from folks who have worked there. Most of FAANG is no different. In comparison, most startups that I’ve worked at valued work life balance highly.

Every workplace has trade offs, it’s the nature of the thing. The compensation imbalances at large companies are bad as well, for example, it’s just that the total increase in company income allows for much more competitive packages overall.

Really this is more of a question of: what do you want out of a job and career? If you want to maximize compensation, go for that BigCo job. But that isn’t the only valid thing to maximize for, which the snark about “higher callings” towards the end misses. Higher autonomy, less complex organizational politics, More ownership of big problems, potential for better alignment between your values and the companies mission, etc. etc.

Re: Working at a startup is overrated, both financially and emotionally

#113

Post by tolbish »

flippinburgers wrote: post #77

Underpaid and overworked. That is what one gets out of startups. I unfortunately seem to be permanently stuck grinding for startups (10+ years). Don't do it to yourself. It isn't worth it.

Might I ask why it is infeasible to apply for a job at a non-startup?

Re: Working at a startup is overrated, both financially and emotionally

#115

Post by hn_throwaway_99 »

hellcow wrote: post #83
hn_throwaway_99 wrote: post #36

I think this is a really good article, but I think that one of the things it misses is that a huge reason the math works out so badly for startup employees is because founders and VCs take the lion's share of the gains. I mean, in my experience at startups, founders typically own around 40% of the equity. The option pool for all other employees is around 10-20%. Now, I certainly believe startup founders deserve far m…

> what founders risk in terms of opportunity costs and lower wages is usually only slightly more than very early stage employees Maybe this is different for others, but my co-founder and I spent 2 years bootstrapping before we got our first customer. We gave up 2 years of wages and consumed our savings to do this with no assurance of success, and even after that first customer it was another full year before we had a…

I think most unicorns actually have a different experience, though, in that the founders often worked on their own for less than 6 months/a year before they got some funding.

I don't have data on this but I would bet a very long lead time before getting funded is actually correlated with a worse likely outcome.

Re: Working at a startup is overrated, both financially and emotionally

#116

Post by hn_throwaway_99 »

hluska wrote: post #111
NeverFade wrote: post #70

Earlier quoted context omitted.

Bingo. As a senior engineer, I get startup offers at the Staff-Principal levels, and even those grant no more than 0.1-0.5% equity at most, on top of ~$180-200k salary. That simply isn't competitive with big established companies like FAANG that offer me $400k+, far better career growth prospects, and far lower risk. For most startups, the equity will be worthless, and the whole company will either shut down or get a…

I'm curious - where do you pay tax on options before they have been exercised?? Every country whose tax system I'm familiar with treats receiving an option as a tax neutral event, but exercising them is taxed as per the country's capital gains legislation.

The issue is you are taxed on them when you exercise them before you can actually sell them to get the money to pay the taxes.

Re: Working at a startup is overrated, both financially and emotionally

#117

Post by yao420 »

ghaff wrote: post #87
lotsofpulp wrote: post #42

Earlier quoted context omitted.

UBI is not about working on any hobby you want. It’s about redistributing wealth so that people can negotiate for more of the pie since the current system relies on using the cumulative wealth of one’s ancestors to determine their bargaining power.

At least you're candid that it's about taking money from people against their will. Most advocates couch UBI in terms like unleashing individual creativity and things like that.

> taking money from people against their will

Yes, that is what taxes are.

Re: Working at a startup is overrated, both financially and emotionally

#118

Post by [deleted] »

wayoutthere wrote: post #68
eecc wrote: post #58

Earlier quoted context omitted.

I guess it’s still a question of borrowing money for a speculative investment, you just get a significant discount that makes profit more likely. Depending on your indebtedness (outstanding student loans, mortgages) savings and current earnings a bank could still refuse to lend you enough money, if at all

If you’re making a high enough salary to be getting enough options that you can’t afford to exercise them, you’re making enough to borrow about $100k. I had no trouble getting an uncollateralized loan at a reasonable rate for $75k; and I had $100k in student debt, a $500k mortgage and little else in the way of assets. And when I say “no trouble” I mean I applied for the loan, was approved 30 minutes later and had the…

[deleted]

Re: Working at a startup is overrated, both financially and emotionally

#119

Post by Grimm1 »

rjzzleep wrote: post #101
hn_throwaway_99 wrote: post #36

I think this is a really good article, but I think that one of the things it misses is that a huge reason the math works out so badly for startup employees is because founders and VCs take the lion's share of the gains. I mean, in my experience at startups, founders typically own around 40% of the equity. The option pool for all other employees is around 10-20%. Now, I certainly believe startup founders deserve far m…

From my own household/wife I have a person who's worked her ass off for a hugely incompetent CEO who has a majority stake. When I say ass off I mean 12-14 hours a day even on weekends. A promise of unlimited holidays and then coercing all employees to work during government mandated holidays and now he's trying to scam her out of her less than 1% options by coercing her to write a maternity leave policy that would ma…

I’ve never had these abuses working for a startup. I feel like you have to push back against things instead of just going with it. Or choose the position better because they sound like bad jobs regardless of the type of business. That’s what I can’t help thinking when I hear that because I’ve now worked for 5 different startups and while there was some crunch time occasionally the majority by far was an 8 hour day and then I was out, even for one of the companies when I was the 4th engineer. And they just closed another 20 million round recently.

I really don’t think people do enough due diligence about where they should work plain and simple. Work is a mutual contract where you want to try to extract as much value from your employer while negotiating to the point they’ll still hire you. And a lot of the negotiation is figuring out if it’s a good job anyway and walking away to another option if you get the sense it’s not a good from either a financial, time or social perspective.

Re: Working at a startup is overrated, both financially and emotionally

#120

Post by GiorgioG »

In the best of circumstances working for a startup is akin to playing the lottery. I worked at a startup almost a decade ago and I took (nearly) no equity in exchange for a much higher salary. The startup failed not long after I left.

If you just want the experience of working at a startup, go for it. But don't do it expecting any financial reward beyond of your salary.

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