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Talking About Money

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Re: Talking About Money

#61

Post by rfrey »

codingdave wrote: post #26
benmanns wrote: post #4

Earlier quoted context omitted.

For 2, if a reasonable salary is $X, and the company offers you $X-$Y, you're essentially investing $Y per year into the company (at worse terms than actual investors). How much equity do/did investors want for $Y?

It isn't that simple - investments and their returns have risks built in, and people expect more return for more risk. If you are an employee, you are not risking your own money, you are just losing some opportunities for cash. This lost opportunity does work into the equation, but not at the same risk level as an investor because if the company tanks, the investors lose every dime... But the employee still got paid…

> if the company tanks, the investors lose every dime

If you choose a $90k job + equity over a $130k job, and the company tanks 2 years later, you've lost every dime of that 80k.

It's a bit different since your "investment" consists of 24 tranches, but that's more than balanced by the vesting schedule which gives you nothing for a year (despite accepting your investment immediately), and takes it all away if you stop investing.

Re: Talking About Money

#62

Post by Nicholas_C »

marktangotango wrote: post #9

>> Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that inform…

I find that quote interesting as well. Would anyone actually leave their job for $5k? Unless you hate your current job or the new job is more intellectually stimulating/better culture, that's a pretty paltry amount to take the risk of leaving your current role. Especially considering if you leave and don't like it you may have to stay in a role you don't like for a couple years to avoid looking like a job hopper. I make well under $100k and wouldn't leave my company for $5k unless the work is significantly more interesting. I work in finance so perhaps engineering is different.

Re: Talking About Money

#63

Post by ghaff »

brentshields wrote: post #42
IkmoIkmo wrote: post #34

Earlier quoted context omitted.

Crazy. I'd definitely send a quick note to someone higher up if you can get a hold of him/her. I know, not worth the time, a hassle etc. But a typical CEO worth his salt will crush something silly like that in no-time, if you really want to hire good people this is the type of person you want to fire. I mean, hell, asking the question is one thing. I can live with that. But turning that into some kind of litmus test…

Regarding bluffing: I've seen it happen where the company has asked for a pay stub as part of the final paperwork to confirm that the stated current salary was legit. So yeah that could be a downside to bluffing if you want the job.

I've never heard of such a thing but it undoubtedly happens. Your pay stub is really just showing the floor though. For many positions, there are fairly regular bonuses, variable comp, etc. So, in reality, there's usually some wiggle room in providing current salary info while still being essentially truthful.

Re: Talking About Money

#64

Post by rev_bird »

mbesto wrote: post #32
patio11 wrote: post #11

Earlier quoted context omitted.

Because I enjoyed running the software business more than I enjoyed running the consultancy. Partly that is for difficult-to-explain personal reasons (I feel the sense of satisfaction with operating a software company that some people feel when painting things). Partly it is because of reasons which are endemic to consultancies, even successful consultancies. Feel free to ask if you're curious. I also have a quirky r…

I'll take a stab at the "why not build a consultancy business"... It's not scalable in any shape or form. Despite having aspirational goals early on, every consulting company falls into the trap of becoming a body-shop. It happens every. single. time. You begin to feel less satisfaction about your services and proposals to clients because you emphasize "our talent speaks for itself" and it's polarized by your clients…

Horizontal scaling in consulting seems to be what you're so put off by, but I think at most lower levels, vertical scaling is still very possible.

For me, at least for the forseeable future, I'm pretty solidly convinced that I can earn more money by studying and improving my tech skills than I could ever earn by taking a side-job that actually pays me dollars in my hand.

Maybe one can "max out" and just know enough to get their job done, but I'm not there yet -- I frequently find myself ditching other opportunities for making short-term cash in favor of learning something new. That's why I would favor "building" over running a less profitable software business.

Re: Talking About Money

#65

Post by bcg1 »

patio11 wrote: post #11
brador wrote: post #3

If consulting is making $30k/week/job then why keep running the personal businesses? Why not take the consulting and branch it out, and drop everything else as a distraction?

Because I enjoyed running the software business more than I enjoyed running the consultancy. Partly that is for difficult-to-explain personal reasons (I feel the sense of satisfaction with operating a software company that some people feel when painting things). Partly it is because of reasons which are endemic to consultancies, even successful consultancies. Feel free to ask if you're curious. I also have a quirky r…

Not snark... serious question... its not clear to me what sort of services anyone could offer for 30k per week... what sort of thing commands that kind of price tag?

Re: Talking About Money

#66

Post by nostrademons »

Nicholas_C wrote: post #37
marktangotango wrote: post #9

>> Most important takeaway about salary negotiation, by the way: disclosing a previous salary is almost always against your interests because it pegs your new salary to that plus 5% rather than your value to the new firm minus a discount, which is a brutal mistake I had a phone screen with an HR drone once (Cerner Inc. to be exact \waves) part way thru she asked me my current salary. I declined to provide that inform…

I had a similar experience with a recruiter. I asked why and she couldn't come up with a compelling answer, she just said "That's just how it is, we need your salary." She escalated it to her manager and he pulled the same. I eventually complied but not without telling them I didn't ever receive a good reason and it makes zero sense and I couldn't see how it would do anything but hurt me. Funny enough I ended up gett…

It's a pretty strong signal that they want people who won't negotiate and aren't assertive. In some businesses, it's just counterproductive to hire an assertive employee: the business processes are in place, the command structure is well-established, and they just need bodies to fill places in the org chart. If it's one of those companies and you're one of those people, getting hired there will likely be painful for both of you.

Re: Talking About Money

#67

Post by philip1209 »

I wonder if you could have all interviewers fill out a brief survey and give the results candidates for reference - e.g. checkboxes of:

* This interviewer is comfortable talking about their salary

* This interviewer is comfortable talking about diversity and equality efforts

* This interviewer is comfortable talking about the visa and immigration process

* This interviewer had children during employ and is comfortable talking about the process

As an interviewee, knowing that I could ask direct questions instead of skirting around issues due to trying to be sensitive would drastically improve the experience.

Re: Talking About Money

#68

Post by thedufer »

codingdave wrote: post #26
benmanns wrote: post #4

Earlier quoted context omitted.

For 2, if a reasonable salary is $X, and the company offers you $X-$Y, you're essentially investing $Y per year into the company (at worse terms than actual investors). How much equity do/did investors want for $Y?

It isn't that simple - investments and their returns have risks built in, and people expect more return for more risk. If you are an employee, you are not risking your own money, you are just losing some opportunities for cash. This lost opportunity does work into the equation, but not at the same risk level as an investor because if the company tanks, the investors lose every dime... But the employee still got paid…

> are not risking your own money, you are just losing some opportunities for cash

Those are exactly the same thing. Pretending otherwise is asking startups to rob you.

Re: Talking About Money

#69

Post by evanmoran »

L_Rahman wrote: post #2

As a recent graduate about to go into his first ever salary negotiation, I'm really grateful for the perspective this provides. My dad was a taxi driver (now drives for Uber) and my mother a stay-at-home mom. I was raised with the notion of earning enough to support myself. Anything beyond that is something I'm expected to figure out myself. Posts such as these are very helpful. A question though: 1. If I've had conv…

Also remember that the first non-founder employee is the least desirable position to be in. Usually you have very similar risk to the founders with _significantly_ less equity. Don't take the job unless you get market rates or significant equity (10%+). If they already have funding the former is much more likely, if not then latter makes sense considering the stage -- you're effectively a founder, even if you're not leadership.

Re: Talking About Money

#70

Post by cpeterso »

Todd wrote: post #18

I always appreciate your transparency and believe that you're helping drive our industry forward. I often search for ideas on how to help within my area of influence. The closest I've found is Stack Exchange's salary matrix, and the related approach at Fog Creek. I think publishing salaries has several benefits. For one thing, it removes the used car salesman approach to hiring. One result, which is more important, i…

Glassdoor.com seems to have fairly accurate salary reports across different companies, jobs, and geographies.
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