41–50 of 158 posts
Earlier quoted context omitted.
[deleted]
Your analogy is analogous to swiss cheese. It's near given that a volunteer firefighter will encounter a fire. However, most startups fail and provide poor job security. Equity should not be factored unless it is a tremendous amount. A couple percent is a joke. 10% and up becomes reasonable, and should be understood to be merely a bonus for working for an early-stage company. Just the job security alone is enough to…
My advice to people who want to work in a startup is always very simple: Ignore any equity. If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it. Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the start…
Very true, and thanks for the link. I think that this also applies the other way around. If you're a founder building your early team, you should not hire people who want to join because of the equity. You should be bringing in people because they want to work on the problem for the salary that you can give them or promise to give . If you hire someone who has an expectation that he will make a million dollars in 4 y…
I think this holds in starting but ownership and responsibility is more on people's attitude. The equity will also remains the same(in %).
I like your point about not joining/hiring to make few millions in 4 years. It probably is a driving factor in start but wont sustain for 4 years. Again people's attitude.
My advice to people who want to work in a startup is always very simple: Ignore any equity. If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it. Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the start…
I think about startup employee equity like this: Salary = compensation for doing the job Equity = compensation for taking the risk of working at a company with a high chance of failure Therefore, in the future, an employee with lots of equity should still be paid a normal salary/raise/bonus because the equity isn't "current" compensation for doing the job, but a reward for taking a risk long ago. But ignoring equity…
But if you are getting a normal salary, what is this risk?
Earlier quoted context omitted.
I think about startup employee equity like this: Salary = compensation for doing the job Equity = compensation for taking the risk of working at a company with a high chance of failure Therefore, in the future, an employee with lots of equity should still be paid a normal salary/raise/bonus because the equity isn't "current" compensation for doing the job, but a reward for taking a risk long ago. But ignoring equity…
>Equity = compensation for taking the risk of working at a company with a high chance of failure But if you are getting a normal salary, what is this risk?
I think people forget just how complex cap tables can get. Add in rules about vesting and strike price, and dilution in future rounds and debt financing, and the likelihood that lowly employees receive meaningful amounts at an acquisition diminish further. Sure, big time paydays and public offerings are possible, but these are the exception. Bottom line: Insist to get paid what you're worth and take any options as a…
My advice to people who want to work in a startup is always very simple: Ignore any equity. If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it. Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the start…
So why the hell do startups bother offering equity? It seems like for the founders there are only downsides in offering it, while for the employees there is no upside at all. Perhaps a better model for a two founder startup looking for a first employee is to just find a third partner who will only take equity (that is in double digit percentages), then actually start paying only salaries to person 4+.
Earlier quoted context omitted.
What are you doing here on HN. Shouldn't you be on a beach? Don't tell us you have the startup bug!
Ha! I hear you.. beach is good.... it was a truckload,not a boatload? :) I still have to work, but , you know.... I can do what I want when I want.. ok... I need to stop getting braggy.. sorry ... Yeah, I think it was with the equity addition.... Once I did that, my delta went in the negative, and it would have beeen better to stay corporate ;)
Earlier quoted context omitted.
I think about startup employee equity like this: Salary = compensation for doing the job Equity = compensation for taking the risk of working at a company with a high chance of failure Therefore, in the future, an employee with lots of equity should still be paid a normal salary/raise/bonus because the equity isn't "current" compensation for doing the job, but a reward for taking a risk long ago. But ignoring equity…
>Equity = compensation for taking the risk of working at a company with a high chance of failure But if you are getting a normal salary, what is this risk?
And just to add: my view is that at a startup, "market rate" is too low, even with equity on the table (to a certain extent--if it gets to double-digit equity my opinion is the negotiation isn't about bringing on an employee so much as a legitimate co-founder) especially given the broad responsibilities early employees are tasked with and the high likelihood of failure.