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The Career Path I Didn’t Consider, But Should Have

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Re: The Career Path I Didn’t Consider, But Should Have

#91

Post by paulrademacher »

birken wrote: post #31
courtson5 wrote: post #30

The author sells equity as a main motivator in joining a startup. But if you believe in equity, you are far better off being a founder than an early employee Being the first employee (or an early employee) of a startup seems to be the worst possible choice. * none of the stability of a larger company * a salary which is likely less than market * 10 to 100 times less equity than a founder (So, in an exit, you'll make…

You are speaking in some really large generalities. Being an early employee of a startup isn't indentured servitude. If you are offered little equity as compared to the founders, don't join. If the founders won't share the financials of the company with you, don't join. If they wont pay you the salary you want, don't join. If they wont offer you the opportunity to grow into the role you want, don't join. And you can'…

> If you are offered little equity as compared to the founders, don't join.

There is no "if". Employee equity is always a small fraction of founders'. This won't change until people realize the discrepancy, or demand more equity at early stage startups.

Re: The Career Path I Didn’t Consider, But Should Have

#92

Post by jlarocco »

scosman wrote: post #86
courtson5 wrote: post #30

The author sells equity as a main motivator in joining a startup. But if you believe in equity, you are far better off being a founder than an early employee Being the first employee (or an early employee) of a startup seems to be the worst possible choice. * none of the stability of a larger company * a salary which is likely less than market * 10 to 100 times less equity than a founder (So, in an exit, you'll make…

Sightly less than market salary is a lot better than 12+ months of no salary, and putting a good chunk of your saving in to getting a company started. If you want a ton of equity, start a company, but don't expect a paycheque. If you want a paycheque and a lot of equity, join an early stage company.

By the time a company can afford decent pay checks for new employees, those employees probably aren't getting "a lot of equity."

Yeah, they'll get some, but they won't exactly be retiring after the IPO because of it.

Re: The Career Path I Didn’t Consider, But Should Have

#93

Post by Blackthorn »

StavrosK wrote: post #71
cj wrote: post #29

> There are a few warnings that go along with working for equity. Another warning: Equity can be expensive. It can cost a lot of money to keep that equity when you leave the startup. I was at a startup for 2 years and had 2% vested equity. I left the company 2 months ago. If I want to keep my equity, I have to exercise my stock options and pay ~$30k within the next month. If I don't, the equity disappears forever.

Is that because the stock hasn't vested?

No, it's because options are completely shitty for employees (whereas they're great for the company).

Re: The Career Path I Didn’t Consider, But Should Have

#94

Post by jordanthoms »

StavrosK wrote: post #71
cj wrote: post #29

> There are a few warnings that go along with working for equity. Another warning: Equity can be expensive. It can cost a lot of money to keep that equity when you leave the startup. I was at a startup for 2 years and had 2% vested equity. I left the company 2 months ago. If I want to keep my equity, I have to exercise my stock options and pay ~$30k within the next month. If I don't, the equity disappears forever.

Is that because the stock hasn't vested?

It's because almost all the time you are actually issued options, not shares. The options allow you to buy a certain number of shares at a lower price, but you need to pay that price to exercise them.

Re: The Career Path I Didn’t Consider, But Should Have

#95

Post by Blackthorn »

rjdagost wrote: post #62
courtson5 wrote: post #30

The author sells equity as a main motivator in joining a startup. But if you believe in equity, you are far better off being a founder than an early employee Being the first employee (or an early employee) of a startup seems to be the worst possible choice. * none of the stability of a larger company * a salary which is likely less than market * 10 to 100 times less equity than a founder (So, in an exit, you'll make…

To add to your list: as an early employee, there is a good chance that your equity will get diluted a bit. The small fraction of the company you "own" when you join (and after your options fully vest) might shrink significantly after future funding rounds. As an employee you have little leverage against getting diluted. The worst statistic of all: the vast majority of employees never exercise their stock options. Acc…

During my last job search, I was contacted by several companies with seed funding (not even series A). They wanted to lowball a salary and then give 1% or less equity to "make up for it".

Hahahahahahaha. Haha. Ha. Are you serious? For an early non-founder employee, startups might as well be scams.

Re: The Career Path I Didn’t Consider, But Should Have

#96

Post by pantherette »

This is interesting to read but a one-sided perspective. It can also go the other way, where going into the startup world is a big career mistake and is later regretted. A number of my female friends joined startups right out of college. Multiple busts/layoffs/firings later, they realized they had a disjointed resume, with short experiences at companies no one has heard of, and worse - few skills to show for it. They never progressed beyond customer service and various other administrative, low-paid positions. On the other hand, after a short stint in consulting/banking, other friends gained skills that they could leverage for much better positions in both startups and the corporate world. Yes, working for a company like Deloitte or GE expands your choices later on. For some reason, lack of career progression seems to impact women in startups much more than men. I think it's because there are so few women at startups - and male founders bring in their friends/other men they're comfortable with for interesting positions. The good news is that although they "lost" 4-8 years where they didn't learn much, these women were able to finally get going with their career - either through graduate school (MBA, law school, going into medicine) or getting an entry level job at a large company (Facebook, Cisco etc) where they were able to work with MUCH more senior people in a business team and actually learn things.

Re: The Career Path I Didn’t Consider, But Should Have

#97

Post by pkaye »

Blackthorn wrote: post #95
rjdagost wrote: post #62

Earlier quoted context omitted.

To add to your list: as an early employee, there is a good chance that your equity will get diluted a bit. The small fraction of the company you "own" when you join (and after your options fully vest) might shrink significantly after future funding rounds. As an employee you have little leverage against getting diluted. The worst statistic of all: the vast majority of employees never exercise their stock options. Acc…

During my last job search, I was contacted by several companies with seed funding (not even series A). They wanted to lowball a salary and then give 1% or less equity to "make up for it". Hahahahahahaha. Haha. Ha. Are you serious? For an early non-founder employee, startups might as well be scams.

How does on balance the lower salary with the increased equity in making a decision?

Re: The Career Path I Didn’t Consider, But Should Have

#98

Post by reality_czech »

dcpdx wrote: post #64

Graduates fresh out of college have the one thing that's most important for long-term wealth accumulation on their side: time. Take two scenarios, for instance, both assuming retirement age of 65 and a long-term average stock market return of 7% annually. Scenario one: Smart 20-year-old college grad accepts an offer to go work for Big Tech, Consulting, whatever. Their salary allows them to pay down any student loan d…

OK, I've been trying to be nice here, but this is just too much. 7% annual returns in the stock market? Good luck with that, buddy. I'd be happy to get a guaranteed 4%, but I doubt it will happen. How about a team of unicorns to pull my coach to work every day?

Guess what: you are never going to have financial security unless you win the startup lottery. If you make 150k a year instead of 100k, the colleges you send your kid to will just charge you an extra 50k in tuition. The more you make, the more they charge. Great model, eh?

Middle class savings are ridiculously inadequate to modern expenses. Even a few days in the hospital could set you back hundreds of thousands of dollars if the bureaucrats at the insurance company decide it's not covered. In a divorce your partner will get half of the house, half of the money, and probably a permanent monthly stipend out of you (at least in California).

You're either one of the 1% or you're one of the poor. So take your chances and roll the dice. If you succeed you will be able to pursue whatever other dreams you want. If you fail, you'll just take the safe job at IBM like everyone else. Retirement is mostly a scam anyway and odds are none of the savings you've accumulated will mean squat when the big one drops / singularity hits / Sarah Palin becomes President-for-Life.

Re: The Career Path I Didn’t Consider, But Should Have

#99

Post by pantherette »

aliston wrote: post #76

For what it's worth, I chose the small startup offer over the name brand offer after graduating from a top school. My advice would be to TAKE THE NAME BRAND OFFER. Jessica's points were not true in my experience. "Yes, startups are very risky, and they often fail. But when they don’t fail, their stock can become quite valuable." The startup I worked for actually was pretty successful by most measures. In fact, I've n…

Thank you for providing this perspective, I completely agree.

Re: The Career Path I Didn’t Consider, But Should Have

#100

Post by raverbashing »

courtson5 wrote: post #30

The author sells equity as a main motivator in joining a startup. But if you believe in equity, you are far better off being a founder than an early employee Being the first employee (or an early employee) of a startup seems to be the worst possible choice. * none of the stability of a larger company * a salary which is likely less than market * 10 to 100 times less equity than a founder (So, in an exit, you'll make…

And that's why you should ask for a good salary (the VCs will most likely pay for it)

And it's definitely not a bad experience (of course it's fast paced)

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