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Employee Equity

blog.samaltman.com

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271–280 of 342 posts

Re: Employee Equity

#271

Post by [deleted] »

jmcgough wrote: post #264
rhc2104 wrote: post #116

Earlier quoted context omitted.

You don't have to be one of the 10 first employees at Facebook to get paid: http://www.dailymail.co.uk/news/article-2072204/Facebook-IPO... As a general rule of thumb, if a company is willing to do the extremely expensive action of acquihiring, they are willing to part a pretty high amount of equity of employees. Not acquihire-high of course, but a pretty good amount. Of course, it could be argued that they aren't "s…

You linked to the Daily Mail, which is a British tabloid and not really known for its factual accuracy.

[deleted]

Re: Employee Equity

#272

Post by kriro »

username223 wrote: post #234
tptacek wrote: post #206

Earlier quoted context omitted.

First of all, if you go looking for market inefficiencies in tech hiring (across the board, not just at startups), you will find lots of them. Software development hiring is folkloric; traditions handed down from Sr. Mgr Software Developer to Associate Developer tracing back to the beginning of time (1982 or so). Second, regarding the talent pool available to employers, two factors confound the analysis: the first an…

> software developers are as a demographic cohort terrible at negotiating. Yep. It's no real surprise that coders are mostly men with poor social skills, while HR is mostly women with good ones, most of whom those men find attractive. Classic Valley symbiosis.

I doubt that many startups have dedicated HR people. If they do it's probably a mistake.

I've met quite a few HR folks with rather poor social skills. It's often the place where the worst business majors get "parked"

Re: Employee Equity

#273

Post by kelnos »

michaelochurch wrote: post #111
jstrate wrote: post #69

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…

Now I work at a large tech company in SV and wont be involved in another startup unless I'm a founder. You're making the right call. I'm probably older than you and I've done two startups. My career hasn't recovered from the lost time. Total waste. Most startups (by startup, I mean "company focused on such rapid growth that VC investment is mandatory") are pure shit. They fuck up your finances, drain your emotional r…

I suspect we're roughly the same age; my experience (after 3 startups as an early or semi-early employee) has been mostly the exact opposite. My finances are in great shape, I'm emotionally and socially healthy (the first one ended up hurting in the end, but I got out of there before too much damage was done), and at all three I've held senior development roles and am/was given a lot of latitude and autonomy.

I have no delusions that my option grants will turn me into a millionaire, but my salary is good/great, and I'm able to live well below my means (in San Francisco, even).

I tend to think startups messing up your career is more of a function of your selection of company and attitude than anything else. It's just a job. It'll only break you if you let it.

Re: Employee Equity

#274

Post by kelnos »

lettergram wrote: post #29
x0x0 wrote: post #7

The best solution I have heard is from Adam D’Angelo at Quora. The idea is to grant options that are exercisable for 10 years from the grant date, which should cover nearly all cases That is an awesome idea, and really classy on Adam's part.

I think 180 - 365 days seems far more reasonable. It's ridiculous to have the company shares tied up with the inability to give them back to other employees.

I don't really see it that way at all.

As part of your compensation package when you sign up, you're granted a set of unvested options. The idea is, as you work for the company and provide the value you've promised, the options become vested and are actually yours.

So why do you need to stay there to keep them? If I work at a company for a year and 25% of my options vest, why are the terms surrounding their exercise different depending on whether I choose to stay or not? I earned those options by working there for a year. Why is it fair to take them back if I decide to leave instead of stay?

Yes, I get that you're agreeing to that up front, so it's not like you should be surprised when the 90-day limit kicks in. I just wish option grant agreements weren't structured like that, but the employee has pretty much zero power to change that; these grants are pretty much take-it-or-leave-it, and the only point of negotiation seems to be in the quantity of the options. At best.

Re: Employee Equity

#275

Post by lukego »

apinstein wrote: post #227
marvin wrote: post #119

Earlier quoted context omitted.

Has anyone stopped to think what a massive failing of the startup part of the industry this is? Practically everything I read online indicates that if you consider your stock options to have any value at all even in a moderately successful company, you are a major sucker and about to get exploited. Surely this must reduce the quality of the talent pool available to new startups, as the experienced developers conclude…

We came to this conclusion as well; we decided to do bonuses based on Y/Y revenue growth rather than equity. The bonuses are not capped. This allows us to: 1) Justly reward our employees to the upside (with cash, delivered semi-anually) if things go according to plan 2) Automatically controls costs if we don't perform as a team 3) Achieve upside fairness across early vs late employees since we can adjust the bonus %…

Cool :-).

I worked at a very successful company that used a similar model: flat 50% of profits paid to employees as bonus. This worked fantastically well in the short term. Now, 10 years later, the company is still very successful but the upside has all shifted to the owners due to departures, renegotiations, and new hires not getting the same terms. So at 3 years it looked very pro-employee but at 10 years it looks very pro-owner.

Would have been really "interesting" if there had been a liquidity event...

Re: Employee Equity

#276

Post by michaelochurch »

603techguy wrote: post #241
michaelochurch wrote: post #112

Earlier quoted context omitted.

In other words, if scumbags control the company, scumbags control the company. Fortunately, most people aren't scumbags. Most people aren't, perhaps. Most people who have the connections to be VC-funded startup founders are scumbags.

Read: I am not one of them or have the social skills/drive to be one of them therefore they are scumbags.

You don't know what the fuck you are talking about.

If you have actually lived in the society that actually exists, rather than the one entirely in your own head that you wish to believe in, you'll recognize that there is a positive correlation between social position and being unethical. (1) Power corrupts, (2) power attracts bad people, (3) bad people are more willing to make moral compromises to get power, (4) good people in power (it does happen) are usually not cynical enough to tell when they're being lied to by their lieutenants.

It's completely understandable that you'd rather live in your Pollyanna fantasy world, and that's fine. If you want to believe that the world is 6,000 years old, that is likewise OK with me (even if you're wrong). What I won't let you do is spread delusion to the young and gullible. If you don't know what the fuck you're talking about, then kindly quiet down and let the adults talk.

Re: Employee Equity

#277

Post by marvin »

thrAway0101 wrote: post #247
michaelochurch wrote: post #148

Earlier quoted context omitted.

Most underperformers don't really cause any problems. They work slowly and can't be assigned anything important, but over time the organization can adapt to them. Consequently, nothing really happens to them until there's a general belt-tightening. Usually, because people don't like being dicks and most underperformers aren't disliked, they're rolled into a general layoff and get a severance. Overperformers, on the o…

"You're also probably the type of person who, when served with a PIP despite being one the biggest assets to the company, will go nuclear, create morale-killing spectacles, and be talked about for years afterward" I think Googler's and Xooglers on HN have by now learned to restrain themselves but I've had enough of this troll. I don't know what the actual psychiatric terminology would be but I know what the symptoms…

I'm usually a big fan of online anonymity, but it seems disingenious to hide behind a throwaway when you are making a personal attack directly at a named person - especially when you are referencing internal events at the company in question.

Re: Employee Equity

#278

Post by malandrew »

birken wrote: post #19

The problem with the 10%/20%/30%/40% thing is that if the company shoots way up in value, an employee could theoretically be fired after two years and not capture much of the value they helped to create. It also doesn't necessarily need to be malicious [1], sometimes companies change and a person's skills aren't as valuable anymore. If I were a prospective employee I would never take a deal like this, because it is r…

Thought exercise: If you get 4x the equity/options, you only need to work 1/4 as longer as you would under the old regime. This means that if you get fired after the first year, you're in the same boat as if you had stayed for all four years under the old equity split. What's important to solve to make this work is some clause like the 10 year exercise window.

Re: Employee Equity

#279

Post by wellboy »

skrebbel wrote: post #83

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,…

I wouldn't say that sam has now become a finance guy, finance has now simply become one of the things he does now as well.

Re: Employee Equity

#280

Post by 1stop »

kamaal wrote: post #240
1stop wrote: post #236

Earlier quoted context omitted.

I think that is just poor stereotyping. Most of the software developers I've worked with in my career have had very good social skills, those that didn't, were poor developers as well... So are they bad negotiators because of they lack negotiating ability, or actual ability? Is there data on the social skills of IT, HR, Gender breakdown etc... Perhaps what you are refering to is a U.S (?) phenomenon?

>> those that didn't, were poor developers as well... The fact that people with good social skills convinced you that they were good developers proves the comment made by the parent poster.

I didn't say that, at all. I suggest you re-read.

To clarify for those that are a bit slow(er):

Their development skills convinced me they were good developers, their social skills just correlated.

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