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Any stories of employees with equity successfully taking home over $1m? $500k?

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Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#51

Post by mattmanser »

tptacek wrote: post #31
_abattoir wrote: post #24

Earlier quoted context omitted.

Right, PG's advice is not useful for all founders, just the 1 out of every 10 that makes it big. The others are supposed to nut up and get over it. His advice does, however, benefit every venture capitalist.

Critiques of Paul Graham and YC lose me the instant they suggest that they're rigging the system for venture capitalists. I've got friends in YC, I've worked closely with YC companies for years, I know several people at YC, and the evidence overwhelmingly suggests that their intentions are (a) good and (b) founder-aligned. I'm pretty sure they're wrong about a couple things --- particularly the stuff that comes from…

So?

YC can have founder interests at heart and still give out VC biased advice because of the type of startup they encourage. The two aren't mutually exclusive.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#53

Post by junk_underscore »

ziiffo wrote: post #50
junk_underscore wrote: post #45

Earlier quoted context omitted.

I have not been here 4 years, but that's the full amount assuming the current Amazon price. I don't have any strong opinion about where Amazon's price is headed. A dead sibling comment claims that $0 is $0, which might be a relevant thing to say if I had not vested any shares yet.

Not sure you answered my question. I was asking whether the $500k - $1m was paid as a lump sum on acquisition.

Sorry about that. I did not receive any lump sum. I have the standard options setup and I received a (much smaller) equity grant that vests over 4 years starting at the date of the acquisition.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#54

Post by technologia »

My first startup job put me barely at the beginning of the range you're talking about. Honestly I thought we could have made it further on our own but I didn't really have much of a choice, but in retrospect it probably was the best thing we could have done for ourselves and our other employees.

I guess the working hard for 5-10 years bit and taking it easy for the rest of your life is fine and all, but I think I would go insane if I didn't have work to do.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#55

Post by hkarthik »

ChuckMcM wrote: post #26

Well in January of '95 I sold 1000 shares of Sun Stock that I had accumulated over the employee purchase program the previous few years. Sure it was only $35,000, this allowed me to purchase a car for cash rather than get a loan on it. When I sold the car in '99 to a used car dealer I realized the same 1000 shares, 4 years later were worth $1.6M. Granted at 1995 it wasn't a start-up any more, but it is an easy counte…

Wow, talk about lost opportunity. I can only assume you're willing to talk about leaving so much money on the table because you got some other windfall a few years later!

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#56

Post by nicholasdrake »

a lot of top engineers are understandably going ot be risk-averse about taking low-salary for equity in a company that most likely will not work out... this however is not good for vc firms, because for their investments to work out they need to be able to hire the best hackers (away from places like google and facebook) . this makes me thikn there might be value in vc firms having hackers on their books, hired guns if you will. where the hacker gets a stable income from the vc firm and multiple attempts at joining different start-ups.. across each individual hackers' 2/3 attempts annd the portfolio of hackers,,,, the massive ten million dollar options could be spread around a bit more, to make it more attractive for top hackers to take the risk and join a start-up

crucially this would also allow investors to take some of the sunk cost risk out of funding a start-up which is the employees wages..

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#57

Post by limeyx »

patio11 wrote: post #18

Facebook and Google both created literally thousands of millionaires, IIRC. Bad news, though: power law distributions of startup returns have some really toothy consequences for employees as well as for investors. There exist some less famous answers I could give here but they would be socially embarrassing to friends/colleagues. Let's put it this way: IPOs are public, right? Each of them allocates 10%ish of the mark…

IPO's are not public in the sense that they make public who gets what (except at the top levels), they are an initial public offering of stock.

How many % is allocated to employees is a very complicated process depending on how much dilution happens and if any down-rounds have happened, or funding needed to be done in a rush (look at say Box ...)

I believe VC's generally want an options pool for non-founders/early employees of around 15-25% but every company is going to be a bit different.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#58

Post by GFischer »

dangerboysteve wrote: post #42
ChuckMcM wrote: post #26

Well in January of '95 I sold 1000 shares of Sun Stock that I had accumulated over the employee purchase program the previous few years. Sure it was only $35,000, this allowed me to purchase a car for cash rather than get a loan on it. When I sold the car in '99 to a used car dealer I realized the same 1000 shares, 4 years later were worth $1.6M. Granted at 1995 it wasn't a start-up any more, but it is an easy counte…

Well, at least you are not Ron-Wayne.

I was not aware of his story... ouch:

http://en.wikipedia.org/wiki/Ronald_Wayne

"He sold his share of the new company for US$800, and later accepted US$1,500 to forfeit any claims against Apple."...

"Had Wayne kept his 10% stock until then, it would have been worth approximately $60 billion."

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#59

Post by burgreblast »

xxcode wrote: post #21

yes - I was part of a recent acquisition and made a little over 4M (pretax). I had 0.1% of the company. I was 24th employee (engineer). The company had 55 people at the time of acquisition. I joined about 14 months before the acquisition.

Trying to think of what 55 person company sold for $4B. Was thinking Whatsapp but you would have had more like $19M pretax at 1%.

edit: If vested. But after so short, only 25% vested. Congrats! Sounds like there's more upside for you!

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#60

Post by limeyx »

nilkn wrote: post #37

A somewhat dual question, can anyone offer advice on what to look for when negotiating an offer with an early-stage startup with a view towards achieving an outcome in this range? What are some red-flags in an equity offer that suggest it won't be worth what it seems? What are some reasonable stipulations/demands to make as the employee, to protect yourself and your stake? I've been told that there are so many loopho…

I think it's mostly the trushworthiness of the founders (plus if they have a track record) coupled with the kind of industry/product they are working on.

Some categories inherently need more capital (hardware, network-based) so chances are maybe higher that you will have more dilution but hopefully the pie gets bigger each time so that may not be the worst thing.

Even though "making money" seems so passe these days, the startups I've experience with that were not viciously focused on revenue and at least break-even are dead and the other two still exist so not a big-enough "N" for a sample but ....

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