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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

#201

Post by hinkley »

rcruzeiro wrote: post #125
rjzzleep wrote: post #101

Earlier quoted context omitted.

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…

It's funny how often I got rejected after saying that I am not 24/7 available and that I believe that, if someone needs to have this kind of availability, it means that something in the company is not working and needs to be fixed. The words they used in the rejections were always something like: "we feel like you are not willing to put enough skin in the game" or "everyone else sees the opportunity here is is willin…

They say “skin in the game” but they mean “skin in the machine”.

These sorts of word games work on young naive people, especially young men. Maybe we need to broadly educate people that this sort of exploitation is not okay...

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

#202

Post by globular-toast »

This makes me think of the composition fallacy[0]. There is another, more specific, term called the "apex fallacy". The idea is that people have a tendency to see only the most successful representatives of a particular group and infer that the group as a whole has an advantage.

[0] https://en.wikipedia.org/wiki/Fallacy_of_composition

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

#203

Post by oncethere »

I agree that the math is very poor for early employees. I went through the best case scenario and it still wasn't worth it.

I joined a startup just after their series A. I was offered what they said was a lot of equity (1/2000 of the company). I ended up with the best case scenario: it grew like crazy and 8 years later went public at a multi-billion dollar valuation. My shares had gone up more than 100x.

My payout was good, but financially not worth it. The company raised a bunch along the way (I stopped counting after series G) so I got diluted a fair bit. I also took a lower than market salary for the time I spent there (which was of course justified by the fact the company was growing so fast and people were jumping to hop on a rocket ship).

I ended up with low 7 figures, which, yes, is amazing, but I actually would have had more at any FAANG company during that same period.

So who really got paid? The founders and the executive team (no matter when they joined). It was a good experience, but startups, financially, are not a great move.

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

#204

Post by ryanSrich »

JoeAltmaier wrote: post #194
ryanSrich wrote: post #178

I’m biased because I run a startup and have only ever worked at startups. But I’d say it basically comes down to different strokes. If you’re in it just for the money AND you have the background and interviewing skills to get a job at a FAANG then you’re better off doing that, you’ll make far more money. For me though, there’s not many salaries that don’t end in “million” that you could pay me to work at a FAANG. Not…

Wow and a startup employee is different? Not a wage slave? So many more compromises in work quality and delivery get made at a startup vs FAANG. Not building a quality product. Building an MVP that fools a few early adopters to part with their money. Then sell out and cash in (not you; the founders). Ok not a wage slave, because the wage isn't worth it. To work overtime without compensation or really any hope of comp…

If you want to make the argument that working for anyone other than yourself is wage slaving I won’t fight you.

The difference to me though is that you typically own (or have the right to own given enough commitment) significantly more of a startup than a FAANG. Granted, your chances of owning anything of value is low, but that’s a risk I’m willing to take over making Bezos and Zuckerberg that much richer. Knowing I’m contributing to their wealth is not something I’d care to live with.

But again, different strokes, as I said.

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

#205

Post by gcheong »

Most people I know working for a startup as an employee are doing it mainly because that was the job they could get at the time they were looking not because they were deliberately looking to join a startup. Whether it’s financially or emotionally optimal is usually secondary to basic survival or at least not wanting to have to deal with current tech hiring practices longer than one has to.

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

#206

Post by nrp »

PragmaticPulp wrote: post #180
jhbao wrote: post #138

This article isn’t about if you should join a startup vs. a big company. It’s about if you should join a startup vs. a FAANG company, which offers outrageous compensation & benefits. From that perspective, FAANG is the obvious choice 99% of the time. The more and apt comparison would be if you should work at a startup vs. a corporate job at a HP or Qualcomm. At those type of companies, compensation is not competitive…

I'm part of a mentoring group for recent college grads. One of our biggest challenges is that much of the conversation on HN, Twitter, Blind, and other sites assumes that FAANG admission is guaranteed. This becomes a major struggle for juniors when they realize that there aren't any FAANG offices in their location. Many others apply to FAANG but don't receive offers, which is devastating if every HN comment, medium a…

I fully agree that the fervor around FAANG is unhealthy. However, if you are just at the start if your career, that is the best time to move to wherever the jobs you are interested in are, rather than restricting yourself to what is available near where you currently are. There will be folks that have obligations preventing that, but most recent college grads should have little holding them from moving.

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

#207

Post by alasdair_ »

hellcow wrote: post #92
hn_throwaway_99 wrote: post #81

Earlier quoted context omitted.

> Savings should only come into it if you're leaving before the liquidity event. Which is another way some startups screw people. If the company is not willing to budge on the "standard" 90-day exercise window, there shouldn't be any negotiation. Just walk away.

There are two types of options, NSO and ISO. You want ISO as an employee because it's better for taxes, but that has a 90-day exercise window set by the IRS. You can push for yourself paying higher taxes in exchange for more flexibility, but it's a tradeoff. https://carta.com/blog/pte-90-day-window/

It’s completely possible to have ISOs that convert to NSOs past the 90 day window.

The last unicorn I worked for had a ten year exercise window after employment ended.

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

#208

Post by mathattack »

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…

Very true. The system overweights the rewards to the founder. And anyone can be a founder if they are willing to take more risk and go without getting paid.

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

#209

Post by BeFlatXIII »

skohan wrote: post #102
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…

I think what's also missing from the equation here is the fact that part of the reason which startup compensation is not competitive is because FAANG salaries have been set in such a way to attract talent which might otherwise go to startups.

How true to do suspect the following hypothesis is: FAANG overpays for top talent they do not need purely to keep it out of the hands of startups and competitors who do have a present concrete need for the top-shelf talent pool?

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

#210

Post by Aeolun »

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…

> that's what you have to do to change the world

It may be what you need to change the world. But making a n uber clone for dogs is not changing the world.

Literally 99% of startups have zero claim to trying to change the world.

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