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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

#221
Are there VC firms that invest labor instead of direct capital? It seems they could have a group of amazing, employed devs ready to hit the ground running, then continue on if the VC firm continues to invest. They could train the next tier of tech talent when the company could pay more competitive salaries, then step back to go to the next investment. This VC firm could give real equity in the firm to the techies, meaning the technologist could also benefit in the upside of whatever unicorns the firm invested in...

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

#222

Earlier quoted context omitted.

Also it's impossible for me to tell whether my below market base salary startup offer from a seed/series A startup is at market or not. Especially the equity bit, is 1% equity enough for the second employee(and engineer)? Especially when I am taking a 50% cut on base salary in addition to losing some very real liquid stocks.

If you are the second employee (first engineer) at a tech startup with a solo founder company, most likely you can get more than this. Nobody will give you more than what they have to unless you educate yourself and negotiate on your own behalf. You are taking the same risks as the founder and you being there is directly helping the founder raise funds and hire other engineers. Don't under-value yourself. Your previo…

> You are taking the same risks as the founder

Not even close.

You can quit and go get another job any second of any day with zero consequences.

You have zero financial responsibility or obligations to the investors.

You have zero responsibilities and obligations to clients/customers.

You have zero obligations to financial institutions (banks, loans).

You have zero or little reputation on the line in the industry being addressed. In fact, in most cases competitors will gladly hire you because you have valuable industry-specific experience and training.

I could go on. I see a bunch of comments on this thread painting founders as greedy bastards. All I can say is: I hope you can one day wear those shoes and actually understand reality.

That said, yes, there’s a startup culture that works people to death and often offers dubious outcomes. I really don’t like that at all. In technology some things are very hard. If you don’t work hard it is often impossible to achieve anything of note. I don’t have a problem with that. I am no stranger to 18 hour days, 7 days a week. I get it. A company can’t operate like that forever. If it does, there’s something wrong with it.

As a founder my standard mode of operation is simple: If I am awake, I am working. There’s no way I will demand or request such a thing from anyone else. I am the one whose all-in, not those who work for me.

NOTE: Don’t work for less than you are worth. Option are neat, they could be worth zero or a few million. More often than not they are worth zero. Get fair pay for your work. Assume options are worthless.

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

#223
There are a lot of great things about being in a startup, and many people have done well financially and personally with that career path.

It's also true that a great deal of the promotion of this career path is propaganda that benefits owners - both founders and financiers.

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

#224
Stories like this make me glad my company has yet to accept VC money.

We're a five-person legal tech startup and the work environment is far and away the best I've ever experienced. Granted, I've only been a developer in total for four or five years now (including almost three here), but of all the jobs I've had it's the best.

My CTO/supervisor is amazing: smart, funny, likable and with a management style that works for me amazingly well. Mostly hands off, but fully available for deep dives on technical subjects when necessary. At this point I've earned enough trust to be able to just get shit done with minimal oversight, though we do check in daily at least, and keep each other apprised of what we're up to, or interesting things we've come across.

The lack of external forcing agents is probably a win for us at this point. Obviously there's benefits to having a pile of money to burn: we'd probably hire several more developers and really work to hone our product. But for a team with two full-time developers and a really great designer, not to mention extremely smart and talented leadership and sales teams, we're doing great, and ship features at a pace that seems to put to shame similar companies with much larger teams and far more money. Honestly, I have no idea what they're doing with their time.

Still working on that product-market fit though...

Anyway, tl;dr I feel like I hit the jackpot here.

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

#225

Earlier quoted context omitted.

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’…

Owning a lot of something worth nothing is less valuable than owning a little of something very valuable. 1,000,000 times 0 is still 0.

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

#226
post #119

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…

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 an…

There's certainly some selection bias on these sorts of threads, but I agree with you that it's important for individuals to take as much responsibility as they can for the outcome they expect.

That means vetting a company before joining it, pushing back during negotiations and being willing to walk away, giving necessary feedback to your coworkers regardless of their title, and personally practicing the style of leadership you expect from others.

It takes a team of people though, and if the team isn't solid then you need to either try to fix it or walk away. A good team will build individuals up and support them rather than wear down and exploit them.

I just passed the 5 year mark at my current company. When I joined there were about 30 people, and now it's probably around 400. I took 4 days off this week, but on Friday afternoon I popped into the old "office", which are some portable buildings on a cattle ranch. It turned out to be the once-every-few-years junk cleanup day, and the CEO, possibly a billionaire on paper at this point, was limping around with leather gloves and a sore back, and all he had to talk about was the recent ultrasound of his first baby, and how proud he is of how the company has grown since the last cleanup day.

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

#227

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…

Also it's impossible for me to tell whether my below market base salary startup offer from a seed/series A startup is at market or not. Especially the equity bit, is 1% equity enough for the second employee(and engineer)? Especially when I am taking a 50% cut on base salary in addition to losing some very real liquid stocks.

that’s up to you to decide isn’t it? what i mean is, there’s no correct answer. 1% is a baseline (minimum) offer. many think it’s fair. at this early stage there is high variance. i think 3-5% is fair. this early you are an absolutely critical hire. I personally don’t want to work for a founder that’s stingy and going for bare minimum.

otoh first second third employee jobs don’t come along every day. turn in down and you may never see an offer this early, ever again.

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

#228
If the whole c level does not work the same hours and the reward is not reasonably near the horizon and the extra time is not compensated, then you are being exploited, will never see a reward materialize and your salary is diluted.

Jump ship as far and as soon you can.

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

#229

Earlier quoted context omitted.

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

When your CV is a list of failures, it becomes self-reinforcing?

You can join FAANG and similar. I've had almost nothing but failures on my resume and I was able to interview all the time. It's just about grinding LC and system design - which is really tough and time consuming.

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

#230
Great article. One point it kind of touches on but misses is the higher risk of “growing pains” / incompetence in startup land. Leadership, processes (lack there of) etc can all be lacking / poor. Anything from poor strategic judgement to shitting the bed on equity valuation (eg I once joined a “rocket ship” that valued its shares at $50 a piece. I realize of course share price is a function of outstanding shares but given startups want to minimize their share price, it didn’t seem well managed at all)
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