Salary at Venture-Backed Companies • Hacker News Board

Re: Salary at Venture-Backed Companies

#41

Post by rhizome » Mon, Apr 22, 2013, 7:16 PM UTC

johnbellone wrote: post #36

georgemcbay wrote: post #28

"But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders." IMO (and while I can't speak to the management side of it), this displays a horrifying misunderstanding of the mindset of the technical people you want to hire and pay well. As an experienced and driven programmer, you hire me and pay me well so that…

Anyone that is working for a startup should be invested in getting the best value out of the shareholders. This is usually the case because they themselves own a stake in the company in some form or another. You should be paying your staff what they're worth and not short sell them because you're worried about them feeling "fat and happy." That's simply ridiculous. If they themselves are not a shareholder then they s…

I believe there is a dominant meme in business techniques that drives startup bosses to adopt a slavedriver's attitude. I mean, look at the words themselves: "happy" is used in a negative sense.

Re: Salary at Venture-Backed Companies

#42

Post by kkwok » Mon, Apr 22, 2013, 7:50 PM UTC

Is salary transparency definitely a great thing for companies? I've been told that in law firms (where all non-partner position salaries are revealed) this causes a race to the bottom and is not good for employees.

Re: Salary at Venture-Backed Companies

#43

Post by aquark » Mon, Apr 22, 2013, 7:54 PM UTC

praptak wrote: post #35

georgemcbay wrote: post #28

"But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders." IMO (and while I can't speak to the management side of it), this displays a horrifying misunderstanding of the mindset of the technical people you want to hire and pay well. As an experienced and driven programmer, you hire me and pay me well so that…

I have read about cats that if you need a mouser you should not worry about feeding it too much. Cats will catch mice even if well fed. Feeding it too little means it will start to scout for food far away from your place, thus catching mice elsewhere.

Though once your cat is too well fed it might not be able to catch mice as effectively anymore

Re: Salary at Venture-Backed Companies

#44

Post by kevinskii » Mon, Apr 22, 2013, 7:59 PM UTC

orangethirty wrote: post #23

All of the offers I get from VC backed startups are always ridiculous. They seem to believe that I have to take an economic cut just to help them make it . These days, I talk about compensation first, and then about the project itself. No need to waste a week talking and getting to know the team if they can't pay me a reasonable amount.

After a couple of similar experiences, I too started to mention compensation up front. While it has saved a lot of time, I'm starting to have second thoughts about this approach. The problem is that you don't get a chance to sell yourself to demonstrate why a higher salary might be warranted.

Re: Salary at Venture-Backed Companies

#45

Post by troels » Mon, Apr 22, 2013, 8:05 PM UTC

Since this is about startups, where there is usually a sizeable chunk of equity to go with the salary, it would be useful to get that figure as well.

Re: Salary at Venture-Backed Companies

#46

Post by orangethirty » Mon, Apr 22, 2013, 8:09 PM UTC

kevinskii wrote: post #44

orangethirty wrote: post #23

All of the offers I get from VC backed startups are always ridiculous. They seem to believe that I have to take an economic cut just to help them make it . These days, I talk about compensation first, and then about the project itself. No need to waste a week talking and getting to know the team if they can't pay me a reasonable amount.

After a couple of similar experiences, I too started to mention compensation up front. While it has saved a lot of time, I'm starting to have second thoughts about this approach. The problem is that you don't get a chance to sell yourself to demonstrate why a higher salary might be warranted.

I tested that, too. But I always ended up wasting too much time. I have a base salary of n. If their initial estimate is under that, then I move on. I only talk to those who can at least pay n. Otherwise, its a waste of time. I adopted this system after I wasted a couple of days interviewing with a technical advisor (this title is now a red flag for me).

Re: Salary at Venture-Backed Companies

#47

Post by mynameismiek » Mon, Apr 22, 2013, 8:21 PM UTC

aquark wrote: post #43

praptak wrote: post #35

Earlier quoted context omitted.

I have read about cats that if you need a mouser you should not worry about feeding it too much. Cats will catch mice even if well fed. Feeding it too little means it will start to scout for food far away from your place, thus catching mice elsewhere.

Though once your cat is too well fed it might not be able to catch mice as effectively anymore

It is a good thing I don't eat money!! There are plenty of fat programmers out there that program just as well as the skinny ones.

Re: Salary at Venture-Backed Companies

#48

Post by seanMeverett » Mon, Apr 22, 2013, 8:27 PM UTC

I spent years as an executive compensation consultant both creating and analyzing salary surveys for the world's largest companies.

What it teaches you is that: 1. Never use averages, always use medians 2. Sample sizes are critical, and anything below 5 samples you just can't trust (ideally 30, as the Central Limit Theorem suggests) 3. Garbage in, garbage out: if you don't know the population of the sample, then you can't trust the output (i.e., how many employees, what's the revenue run rate, what's the user growth look like, what's the valuation and how many funding rounds, etc).

I love the spirit of this data, but based on the core principles outlined above, you can't hang your hat on this data.

In software engineering land, not knowing these three principles is like not knowing the principles of MVC.

Re: Salary at Venture-Backed Companies

#49

Post by auctiontheory » Mon, Apr 22, 2013, 8:29 PM UTC

ntomaino wrote: post #27

jonathanjaeger wrote: post #14

Earlier quoted context omitted.

Yeah, at many B2B product or marketing companies, I assume the sales folks are heavily compensated based on commission while the CEO and founders are getting more equity (but possibly lower pay than a lot of the sales people).

Definitely true for sales folks at B2B companies- total comp can sometimes eclipse CEO when adding commission. My piece is focused on salary, not commission, cash bonus, and equity. Surely, a more complete picture of total comp is more valuable, but the scope of the piece was just focused on salary.

Then I think the article should explicitly point out that salary is only a piece (and perhaps not the largest piece) of total cash comp. Otherwise it is very misleading to the naive reader.

Re: Salary at Venture-Backed Companies

#50

Post by ameister14 » Mon, Apr 22, 2013, 8:40 PM UTC

tonystubblebine wrote: post #4

If we're going to have this discussion and focus on the management team, then I think we need to say how much money the company has raised. My thinking about salary for myself and co-founder is definitely funding specific.

Why? If I got 50 million dollars in funding or 400k, I'd still probably pay myself only what I need to survive/present myself and pour as much into the business as possible, at least until profitability and even then my salary would remain low until profitability was maintained and began to increase rather than be an issue.

Then again, I don't have a family.