341–350 of 360 posts
I always advise folks who are looking to work for a startup to value their stock at $0. Will you be happy and enjoy the work you are doing for the salary and benefits alone?
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You just pointed out why your argument fails - it's a poor indicator. A company that doesn't offer lots of benefits may or may not respect its employees. Likewise an employee willing to accept a below-market offer may or may not be committed to the vision.
> Likewise an employee willing to accept a below-market offer may or may not be committed to the vision. What vision? I thought we are all professionals working for the money. It seems bleeding edge capitalism forgets the "free market" and "egoism turns out for the best" and resorts to idealism and religious-like "visions" for the company -- in order to have fools work for less than they could.
That said, most people don't work solely for money and I'm sure you don't either. If they did, then everyone would want to work on Wall Street.
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You just pointed out why your argument fails - it's a poor indicator. A company that doesn't offer lots of benefits may or may not respect its employees. Likewise an employee willing to accept a below-market offer may or may not be committed to the vision.
> Likewise an employee willing to accept a below-market offer may or may not be committed to the vision. What vision? I thought we are all professionals working for the money. It seems bleeding edge capitalism forgets the "free market" and "egoism turns out for the best" and resorts to idealism and religious-like "visions" for the company -- in order to have fools work for less than they could.
Hi, I wasn't answering to your comment as it is, just got inspiration from your "vision" quote (something that one hears often repeated from startup guys).
>That said, most people don't work solely for money and I'm sure you don't either. If they did, then everyone would want to work on Wall Street.
Sure (I also care for the work environment, tech involved etc), but that doesn't mean I work for some "vision" or that I even believe that 99% of startups even have a vision worthy of mention.
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If they just raised at a $40mm valuation, 0.5% equity is literally worth $200k to them right now True for a stock grant, but these are stock options.
The strike price on options is usually really low relative to fund raising valuations. It's not vastly different than an equity grant, at least in the cases where it matters (ie: good ones). I think everyone would prefer to just give actual equity, but the tax implications are pretty terrible for the recipient.
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$500k is life-changing money, but not FU-money. You think that not having to worry about rent and food and medical bills wouldn't change your life?
It isn't even life-changing money. It's most of a house here in Seattle, or a quarter of a house in the valley. That's nice, but not life-changing.
From the Author's bio: "I'm just this guy who used to enjoy tech, now I would rather build bicycles. I still work in the tech industry, for the money, but I no longer call myself a "technologist"." So points well made that a guy with children, in mid-career, and without much of a passion for the field he's working in finds a Y-Combinator offer to be less compelling than a more traditional package. But I'm not sure wh…
But the point of the article is that working for a YC startup isn't in ANYONE's interest. You don't get the security of a large established company, but you also don't get any of the equity that the founders get. And there are plenty of medium-to-large size companies that have well-established business models that are great places to work, have awesome technology, and are solving difficult problems. Working for a startup without equity has no up-side and plenty of down-side.
Unless the YC startup is doing something you really believe in - and I don't just mean 'cool tech' - I mean something that you can feel good about having participated in 10 years from now, something that made you or the world better - insist on equity. Otherwise you're being exploited.
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By saying "including founders" you make it seem so fair. After all, if there is any benefit, founders should get it, right? But, founders obviously cannot have anti-dilution prevention. When a company is founded, by definition the founders have 100% of it, and the only way they can raise money is by diluting. If two founders and three VC reps are sitting around the board table discussing the next round of funding, if…
Well it could work if the amount of stock is effectively fixed at creation time. Everyone I've ever talked to who doesn't already know how stock works is very surprised that more stock can be conjured out of nowhere. They always assume that new stock is formed by subdividing the existing stock (splitting) and that investors get shares that used to belong to the founders.
The prestige asset generated by YC is interesting, because I bet it's going to have an unintended consequence of increasing the social difference between founders and employees. If you're a YC founder, you're in the club. You were picked. It's great if you succeed; if you fail, you have a network. If you're a YC employee, you're just an employee of a small startup. YC founders seem, at least from this, to be blind to…
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http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-o...
Thanks. So why did I (and 'FD3SA) think Ribbon Farm was Michael O Church, when it's Venkat?
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"If you're a YC founder, you're in the club. You were picked. It's great if you succeed; if you fail, you have a network. If you're a YC employee, you're just an employee of a small startup. YC founders seem, at least from this, to be blind to the fact that their employees aren't able to cash in on the prestige of being YC and will therefore expect hard currency." Well said. It's actually infuriating when one joins a…
I guess, there is some correlation between being worthy of YC club and successfully negotiating yourself a founder title. That's probably one of the reasons, why somebody with a non-founder title can't get in that easily. Saying that, such situation is likely to has negative outcome for the company. A conflict in the founding team and high likelihood of significant contributors leaving the company and abandoning proj…
I am employee #1 at the startup I'm at and I've been here since we were a completely different company, targeting a different market with a different product. Being present before these major pivots, means you are very likely to make major contributions to the new direction of the company. This in a way makes you a founder. You may not be the founder of the legal entity, but you are a founder of the company insofar as product, market and business model are concerned, since all were conceived with your involvement. It's very frustrating to be on the other side of the founder-employee divide.