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> 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.
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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?
If they try to convince you that you don't deserve that much because the value of the company will rise in the future, ask them where the signed term sheets for the next round are.
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>> "But if you believe in equity, you are far better off being a founder than an early employee" But not everyone is cut out to be a found or has a good idea they can execute on. For those people being an early employee is the best they can do. It's also incredibly more stressful being a founder and a lot of people don't want that. They are happy to take a lower than market salary in exchange for lottery ticket (equi…
Employee #1 is taking on 80% of the risk of a founder for usually a sliver of the upside. I know a lot of single-digit startup employees and I really think you're doing them a disservice by characterizing that role as really at all less stressful than being a founder. You see founders parachute straight into consulting or speaking after flaming out of their tech startup. Their team needs to go get jobs.
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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 there's a market for lemons, you'll get two types of people: people who realize it's a market for lemons and stay clear of it—and people who don't realize this, and end up exploited by the market. Tu quoque: "If you find out the car has water damage, don't buy it. If you find out the car was in an accident, don't buy it. If you find out the car was stolen, don't buy it." Nobody wants to buy such cars; people are e…
> The good cars (and jobs) sell and sell quickly, while the bad cars (and jobs) stay on the market—so the market becomes saturated with bad cars/jobs, and the actual good cars/jobs become so rare that people invest more in pursuing them than they're worth, creating a sort of dollar-auction market failure.
This, at least in my experience, is exactly what happens with musicians seeking bands.
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1. Early in your career, gaining knowledge, skills and proof of same can be more important than immediate income.
2. Doing something for which you're "underqualified" is commonly a fast way to learn (and to prove that you've learned).
3. Start-ups are relatively likely to pay you to do something for which you're underqualified.
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The most successful Silicon Valley founders and investors were born into wealth, attended expensive private schools, and are connected by exclusive networks. We therefore conclude that these kind of people are simply better and more successful human beings than others. Why else would this tiny class of people so dominant an entire industry?
Startups are hard and risky, which is precisely why it's dominated by "wealthy entitled children". If a poor kid's startup fails, poor kid gets kicked out of his house and starves. If a wealthy kid's startup fails, wealthy kid doesn't get to buy his Ferrari for another year. I have no idea how to break this vicious cycle, apart from strengthening social safety nets for the lower classes to minimize downside risk. But…
> And for much of my 20s, I worked long hours anyway—but others benefited financially from whatever I did, not me. This is not true, unless Livingston was not paid. An accurate statement would have been "I worked long hours anyway—but others benefited more financially from whatever I did." But guess what? This is true when you're an employee at a startup too. Founders, executives and investors will almost always have…
No, the word "benefit" implies additional value (like "profit") above and beyond the break-even trade.
It's entirely possible to "not benefit from the work" on a nonzero salary.
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> If the startup is offering a fair market salary In that case, yes. But that's definitely not the way quite a few of those pitches go. It's more like: take this below market salary and this tiny bit of equity which will surely be worth more one day than the salary that you're foregoing today. Of course it takes two to tango and you're free not to believe that spiel but I've seen it more than once in my own career.
I interviewed with around 20 startups in the Valley about a year and a half ago. Hands down every single startup that made me an offer had a shit salary. After I ditched the idea of working in the Valley based on my experience interviewing there I decided to focus my search on distributed teams only. What I found was surprising. Not only were these new startups outside the Valley offering remote work but almost all h…
Here on HN there has been constant bemoaning over difficulty of finding good remote work.
The biggest issue has been that remote work pretty much requires living in low cost of living locations.