81–90 of 342 posts
I've become a bigger believer in cash. Unless you TRULY believe the vision.
This is probably not the right vehicle to ask 'Am I being treated fairly?', but I think I will anyways. The startup is pre Series A, I'm the first non founding/non executive level engineer, I'm technically a contractor but treated pretty much exactly like an employee (I know that's a whole separate thing), I'm not the most experienced engineer, i.e. last year at my prior job I was an intermediate level but this year…
b) Are you learning tech that will set you up to make big money?
c) Are you gaining insight about the industry that will set you up to be a co-founder?
This entire post is about finance. Not about business, not about products, not about customers, just finance. Personally, I understand just about half of the entire post.
To be clear, I don't think this is a bad thing. I envy Altman for understanding this (and for running YC at an age younger than mine, but that's another thing). But that's not my point. What I wonder about, is whether this is inevitable for successful enterpreneurs.
Is the path programmer->enterpreneur->finance the obvious one? Sam's path might've been odd, given that his startup wasn't the next Facebook, but you see the same in startups that are the next Facebook, such as Facebook. Zuckerberg used to be a PHP hacker and now he's this NASDAQ CEO. I'm not sure about Drew Houston but all I read about Dropbox recently were acquisitions.
Does growing business make you a finance guy, or do you need to be somewhat of a finance guy to grow a business? I'm really curious which is the chicken and which is the egg here.
> Founders certainly deserve a huge premium for starting the earliest, but probably not 100 or 200x what employee number 5 gets. When the founders started the company, their equity was pretty much worthless. When employee #5 is hired and gets 0.50% of the company, her equity presumably has some dollar value. Employee #5 gets a better deal than the founders, even though the founders have 100x more equity. The only thi…
The employee typically gets options, not equity. They are valued at the current market value of the company and cost that amount to acquire. So the value upon grant is 0[1]. [1] modulo accounting tricks
Completely off topic, but I'm this post made me realise that Sam Altman went from programmer to enterpreneur to financial guy. This post has very little ado with what he once started doing. He's a partner (and president) of an investment fund now, a pretty odd career move once you take the pink Silicon Valley glasses off. This entire post is about finance. Not about business, not about products, not about customers,…
(at least in private markets)
Remember how Facebook was "forced" to go public because so many people owned stock? (http://www.businessinsider.com/why-the-sec-will-force-facebo...). Well, if there's a ten-year exercise window, some of the people will hold their options and not exercise them. My -- albeit limited -- understanding of the situation is that those people are not counted as stockholders. They have options, not stock.
So the ten-year exercise window is also good for the startup, because it delays the time until the startup has to publicly disclose its financials.
Earlier quoted context omitted.
How do you define performance? It's a fantastically difficult thing to define. In my experience every attempt at this (at least for engineers) ends up in a situation where people are putting their effort into maximizing metrics as opposed to furthering business goals. We completely decouple performance reviews from compensation. Full stop.
What? Why? Don't the overachievers then become bitter knowing that the guy next desk to them is making more by working less, just because he was better at negotiating at some point?
Interestingly we decouple the two precisely because of what you're describing. When you start singling out specific people, other folks who are also doing very good work pretty quickly become disinterested in their job. That's bad.
Even worse, measuring ACTUAL value to the company is really really difficult (I'd suggest that it is impossible). So now you are in real danger of driving your most valuable people, the ones your system failed to recognize, out the door. That's bad news.
It's quite difficult to compete with Google and their revenue/cash hordes when it comes to salary / total comp. Especially if you price the options at the last round's price and discount them some more. Imagine a well to do company of 2 founders (in SF/Bay Area) and a team of 3-4 others that raised a seed at 10m cap. They want to grow their team headcount to 15 and are busy hiring, running servers, etc. They can offe…
100K is not more than enough to live on, if you live in the Valley and have a family (say 3 kids) then 100K barely buys you a comfortable lifestyle. I know that is not the point of this thread but so much focus of these discussions seems to pivot around a 22 year old college dropout who lives with roommates in a shared apartment. When you reach a certain point, say your mid-30s and you have kids your financial obliga…
As a sibling comment mentioned, working at startups, especially early stage startups, isn't for everyone. If a person has major financial obligations a more steady job with less uncertainty (and less potential for upside) is probably the best fit.
I've worked at two startups, including one YC. Both were acquired by larger tech companies. I was employee #3 at one and rebuilt most of a broken codebase in the other. I got nothing out of either WRT options. I agree with the author on point 4 but I don't think more options are the answer, I should have just asked for a higher salary I would have been better off. Startup-bucks are even worse than a lottery ticket, b…
Even well-funded startups give me pause. I'm not interested in putting in founder-like work for entry-level employee-like compensation plus a lottery ticket. Unless the equity is meaningful and imbues the recipient with an actual, real voice in the direction of the company it's just a way to sidestep offering real compensation.