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Startup jobs with low salary and negligible equity, what gives?

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Re: Startup jobs with low salary and negligible equity, what gives?

#101

Post by brudgers »

jacquesm wrote: post #56
brudgers wrote: post #26

Earlier quoted context omitted.

1% isn't enough equity to justify a below market salary for something with a 10% chance of a $100,000,000 exit in five years...and if only the outlook were that good and imagining no dilution and benevolent actions by controlling shareholders. If the equity is important, then it should have some chance of producing fuck-you-money at liquidation. 0.05% is only fuck-you-money if there's a Google IPO size liquidation an…

It depends on how far below market you will get, but you're right, for plenty of the offers out there 1% would be (way) low. But 0.05% is to be laughed at (politely, of course), no more than that and then simply counter with an offer that you'd be happy with.

As soon as it becomes hardball negotiation, then the context of later events is the same "what can I get out of this" finite pie. The goal is not a percentage but an opportunity for a life-changing payout. 1% or so means that the major shareholders aren't concerned if my working hard doesn't get me rich in circumstances where they become rich.

They're fine with us all having worthless stock together.

What I am getting at is that taking equity means getting a lawyer to oversee the business terms. Going into business with someone who doesn't value the long term success of those with whom they are in business is a bad idea in my opinion. It's better to hang out with people I trust.

Re: Startup jobs with low salary and negligible equity, what gives?

#102

Post by brudgers »

joshavant wrote: post #95
ef4 wrote: post #83

Earlier quoted context omitted.

Yes, definitely this. Don't go through the front door. At most, use publicly listed job ads as a form of research. Never assume they represent all the jobs that are actually available to you. There is no substitute for actually talking to people and getting to know them. Make your own wishlist of companies you'd like to work for. People running startups who are even minimally competent know they need to network a lot…

For what it's worth, n=1, I got an internship at Google and a full-time job at Apple by applying through their respective websites. I wholeheartedly agree with checking out 'other' doors, but it definitely doesn't hurt to at least start with the front door.

Google and Apple are the exceptions. They are massive profitable publicly held companies. And they don't compensate ordinary hires with equity on a percentage basis (maybe x number of shares as a bonus/retirement package).

They are so big that they have HR policies and anyone you are likely to know well enough to give a heads up on a job at either company is not high up enough to shirk the formal HR process. Small companies are very very different.

Re: Startup jobs with low salary and negligible equity, what gives?

#103

Post by fivedogit »

patio11 wrote: post #57

Joel Spolsky had a really interesting insight [+] once about hiring pools: they're disproportionately filled with people who you don't want working for you, because if you're hireable, you exit the hiring pool fairly quickly, and the dynamics of this system quickly mean that the pool is filled full of people who aren't even FizzBuzz qualified. I think the other side of the market is isomorphic to this: any publicly a…

Note: I originally posted this reply about 2 hours ago and then deleted it. But actually, I think it's worth leaving up.

I really respect Joel Spolsky's accomplishments (I've mentioned him recently in my own comments), but I found the blog post you cited wrong at best and offensive at worst. It perpetuates one of the most frustrating things I experienced while job hunting: the stigma of unemployment.

Even though I voluntarily left my last position, companies looked at my candidacy very skeptically. Things I was told by companies:

- "To be honest, we think you're an entrepreneur just looking to make enough runway to move on to the next thing."

- "Well, we're really impressed with you and you have the technical chops, but we're concerned that you like to think on a higher level and might tire of the daily nitty gritty." (Not true, and basically the same as above.)

- "You did well on your coding interview, but we've got enough candidates in our local area that we've decided to restrict our search to it." (i.e. relocation jitters. Not coincidentally, when I finally found a position, it was in my city.)

There are also people who are competent programmers, but come from strange backgrounds, like the music major-turned-coder who posted the other day. I, personally, am almost entirely self taught, haven't worked with other engineers and have only coded on my own projects (you can see my github if you want). People making hiring decisions are scared for their own jobs: they don't want to be the guy who hires the guy who never had a "real" coding job before. If it doesn't work out, I can see where that would come back on them pretty hard. (Conversely, having worked at Google or Apple is a major bonus for the opposite reason.)

Oh, and plenty of people underperform in on-the-spot coding interviews. Some people are affected much more strongly than others by anxiety. It goes both ways. I've read hiring managers on here gripe that they hired someone who interviewed well but sucked in reality. And my guess is it goes the other way, too.

So I find his assertion that people actively looking for work aren't the ones you want to hire incredibly naive, elitist and just plain wrong.

Re: Startup jobs with low salary and negligible equity, what gives?

#104

Post by debacle »

lsc wrote: post #76

>I noticed some rather unsettling job adverts in the past while. Some pre series-A startups in the valley offering like $90k in salary for an experienced developer and 0.05% equity. I am just trying to understand who are their target candidates that they expect to join for such an offer (not to mention crazy working hours)? I had a similar experience recently. all the "startups" expected me to take a 30-40% paycut vs…

> "why you shouldn't hire me"

Care to share this?

Re: Startup jobs with low salary and negligible equity, what gives?

#105

Post by Someone1234 »

xenosapien wrote: post #94
wildpeaks wrote: post #92

90k is "low" ? Don't ever leave the Valley, you'll be even more disappointed

It's definitely low, even outside of the valley. Probably not low in the mid-west.

Around here, most programming jobs top out around 60-70K. I've seen a couple for around the 90K mark, but not many and most require quite a lot of experience.

Near Utah.

Re: Startup jobs with low salary and negligible equity, what gives?

#106

Post by aledalgrande »

debacle wrote: post #104
lsc wrote: post #76

>I noticed some rather unsettling job adverts in the past while. Some pre series-A startups in the valley offering like $90k in salary for an experienced developer and 0.05% equity. I am just trying to understand who are their target candidates that they expect to join for such an offer (not to mention crazy working hours)? I had a similar experience recently. all the "startups" expected me to take a 30-40% paycut vs…

> "why you shouldn't hire me" Care to share this?

would be interested too

Re: Startup jobs with low salary and negligible equity, what gives?

#108

Post by aledalgrande »

7Figures2Commas wrote: post #68
ebiester wrote: post #46

Earlier quoted context omitted.

So, why the hell would anyone leave that much money on the table? If you're asking me to do something crazy, you better be willing to pay for it. .5% equity, especially when it will end up being diluted, is a fool's game.

> So, why the hell would anyone leave that much money on the table? If you're asking me to do something crazy, you better be willing to pay for it. At most early-stage startups, there is no money on the table. If you want to maximize your earnings, focusing your job search on pre-Series A startups is a horrible waste of time. The OP seems to be asking for startup excitement, reasonable hours, high salary and meaningf…

Yes, 5% of $0 is still $0.

Re: Startup jobs with low salary and negligible equity, what gives?

#109

Post by jacquesm »

brudgers wrote: post #101
jacquesm wrote: post #56

Earlier quoted context omitted.

It depends on how far below market you will get, but you're right, for plenty of the offers out there 1% would be (way) low. But 0.05% is to be laughed at (politely, of course), no more than that and then simply counter with an offer that you'd be happy with.

As soon as it becomes hardball negotiation, then the context of later events is the same "what can I get out of this" finite pie. The goal is not a percentage but an opportunity for a life-changing payout. 1% or so means that the major shareholders aren't concerned if my working hard doesn't get me rich in circumstances where they become rich. They're fine with us all having worthless stock together. What I am gettin…

That goes to the heart of the most frequent cause of trouble between shareholders: badly aligned interests. Even so, if you're looking at the stock as a lottery ticket and the company does take off you're in a good position to make a fair amount of money, you just shouldn't count on that. But if you're going to play you might as well play for stakes that are worth it. Each to his own, I think a big part of the 'compensation' in being part of any start-up is that you get ring side seat on how that whole thing works and you can - if you are not just heads down coding - get some very valuable contacts out of it.

This can turn out to be worth more than either the stock or your salary but that's a long game and one with even less guarantees.

Still, I'm pretty sure that very few people that were on board with one of the bigger SV successes of the last 2 decades are going to complain about their pay-day, whereas for everybody whose company did not make it it hardly matters how much stock they got. And that's really where these founders miss the boat: they should be happy to share a sizable chunk of what is essentially worth nothing. They are essentially already busy with their exits when they should be building a company and that alone is a good reason to avoid those companies.

Re: Startup jobs with low salary and negligible equity, what gives?

#110

Post by lsc »

debacle wrote: post #104
lsc wrote: post #76

>I noticed some rather unsettling job adverts in the past while. Some pre series-A startups in the valley offering like $90k in salary for an experienced developer and 0.05% equity. I am just trying to understand who are their target candidates that they expect to join for such an offer (not to mention crazy working hours)? I had a similar experience recently. all the "startups" expected me to take a 30-40% paycut vs…

> "why you shouldn't hire me" Care to share this?

I don't want to spend 8 hours interviewing for a job and not get it, right? so I try to get the likely dealbreakers out of the way up front.

Of course, it never works. You don't get to talk with the people that matter until you are in the interview, at which point, well, I haven't found a way to let them gracefully cut things off early, you know?

In this case, I had been working for a company that I owned most of for the last half-decade.

Also, I have pretty good Linux systems experience, but my experience with the latest applications is somewhat out of date.

I also told them what I thought I could get salary-wise; the exact number they found so shocking later on.

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