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Employee Equity

blog.samaltman.com

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Re: Employee Equity

#301

Post by mikeg8 »

michaelochurch wrote: post #276
603techguy wrote: post #241

Earlier quoted context omitted.

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) go…

Damn dude, I think you forgot to take your Midol today.

Re: Employee Equity

#302

Post by dk8996 »

coffeemug wrote: post #177
OmarIsmail wrote: post #94

Earlier quoted context omitted.

As a potential future founder what strategy will you employ in regards to compensation?

Pick a market where you can get to significant traction in less than a year with a founding team of 3-5. Split equity evenly between all founders, but do pick one CEO. Then work like hell to get to significant traction. Don't hire until series A. (If my current company doesn't work out, this is how I'll do it next time around)

I wish there was a site that had a time line for every startup out there. When they were founded, when they launched, when they hired. ect.. It would be interesting to study. Some good info:

http://www.businessinsider.com/one-million-users-startups-20...

Re: Employee Equity

#303

Post by 7Figures2Commas »

pyrrhotech wrote: post #295
7Figures2Commas wrote: post #207

Earlier quoted context omitted.

> Has anyone stopped to think what a massive failing of the startup part of the industry this is? The failing is not that the employee equity math rarely works out, it's that the "industry" is so focused on equity. It often falls short as a recruiting tool (a significant number of prospective employees are clued in to the fact that it's likely to be worthless) and it's usually a poor retention tool as well (just look…

How is $120k/year to live in a top 5 most expensive city in the world to work harder than 95% of the people on the planet on a boring CRUD app winning the lottery in any stretch of the imagination? That sounds terrible.

Try earning $25,000/year working two jobs in a top 5 most expensive city in the world.

Working in tech may be unjustifiably glamorized, but you have to be incredibly out of touch with reality not to realize that earning six-figures plus benefits working 8-10 hours a day in air-conditioned buildings for employers, many of whom will feed and transport you, is something that millions of Americans would give everything for the opportunity to do.

Re: Employee Equity

#304

Post by enjo »

prostoalex wrote: post #110
enjo wrote: post #87

Earlier quoted context omitted.

We solve that through careful hiring, and not being afraid to part ways with folks who can't get the job done satisfactorily. 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 re…

Do you then have a flat compensation that's known to everybody in the company?

We do not currently, but we've considered it.

Re: Employee Equity

#305

Post by yuhong »

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.

michaelochurch said "most", not all.

Re: Employee Equity

#306

Post by ivansavz »

I wish there existed exit strategies other than IPO and being bought.

At the rate at which tech-giants are buying tech-startups, we'll end up with very few, very large tech conglomerates. I'm not sure how efficiently things run in these giant companies. More managers = more trouble and less autonomy for the lower levels of the pyramid. Central management and the pyramid are almost like communism, and we know how well that turned out...

Why can't a mid-sized profitable company pay out dividends to stock-holders? Say growth mode for the first 5 years to reach profitability, then start cutting cheques to founders, early employees, and first-round investors. I know losing cash will probably hurt the company momentarily, and stunt the growth of the business, but then you start a second round with a new pool of employee stock and new investors come it to do another 5 years.

Basically, he/she who wants to, can smooth-exit after 5, 10, or 15 years, while keeping the same company envelope, mission, and mid-sized company culture throughout the company's life. I guess this would work only for //very// profitable companies that end up with lots of cash in the bank, but if you haven't build a profitable company after 10 years what's the point?

Re: Employee Equity

#307

Post by mgkimsal »

pyrrhotech wrote: post #295
7Figures2Commas wrote: post #207

Earlier quoted context omitted.

> Has anyone stopped to think what a massive failing of the startup part of the industry this is? The failing is not that the employee equity math rarely works out, it's that the "industry" is so focused on equity. It often falls short as a recruiting tool (a significant number of prospective employees are clued in to the fact that it's likely to be worthless) and it's usually a poor retention tool as well (just look…

How is $120k/year to live in a top 5 most expensive city in the world to work harder than 95% of the people on the planet on a boring CRUD app winning the lottery in any stretch of the imagination? That sounds terrible.

"to work harder than 95% of the people on the planet"

What?

Re: Employee Equity

#308

Post by bane »

jknightco wrote: post #290
bane wrote: post #189

Earlier quoted context omitted.

I worked at a few also and managed to get a little money out of options, but nothing to write home about. I think after one company sold I got my payout and bought a new computer and a nice dinner and that was it. I'm actually sitting on a huge pile of vested options at a company I left a few years ago, but I'm unlikely to ever exercise them during a sale because the strike price is almost guaranteed to be higher tha…

Maybe I'm mistaken, but I believe you only have 90 days after leaving a company to purchase vested options. I may be wrong, however.

Mine have a 2016 expiration date. It just depends on the grant agreement.

Re: Employee Equity

#309

Post by pyrrhotech »

jbkp wrote: post #60

You know, it's funny, I read things like this from time to time: "so if I have 0.5% of company and it gets acquired tomorrow for $100 million dollars, will I get $500,000?" and I remember that I am in this exact scenario, and have no idea what the answer is. I've been an employee at a startup for 2 years now. I joined when I was young, naive, and broke — I don't even remember if I read the paperwork before signing it…

assume you'll end up with nothing, because you probably will. Or maybe you'll be able to eat a few nice dinners if you are lucky. If you are being paid under-market, leave ASAP

Re: Employee Equity

#310

Post by dang »

michaelochurch wrote: post #276
603techguy wrote: post #241

Earlier quoted context omitted.

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) go…

Hey. Personal attacks are not allowed on Hacker News, even when someone else flames you first.

(This originally read "regardless of how wrong you think someone is", but as someone pointed out to me, that was the wrong way to put it, and the original offender was upthread.)

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