Talking About Money • Hacker News Board

Re: Talking About Money

#251

Post by arbuge » Sat, May 02, 2015, 2:02 AM UTC

>>The business is modestly successful. I have a particular number in mind for it, which I’d be crazy to quote publicly prior to selling it, for the same reason that you’d be crazy to quote your desired salary in a salary negotiation. If a buyer pitches me on 2X my desired number I will, naturally, say “That’s an interesting number. If you were offer insert 2.2X here I think we’d have a deal.” No buyer will pitch 2X if they know what X is, though.

There is sufficient information there for a buyer to calibrate to some extent what X is from the author's response, assuming (a) the offer is reasonably close to 2X and (b) the author displays no unreasonably nonlinear discontinuities in emotional state as the offering price is varied.

Re: Talking About Money

#252

Post by madeofpalk » Sat, May 02, 2015, 2:03 AM UTC

tptacek wrote: post #234

fredkbloggs wrote: post #188

Earlier quoted context omitted.

First of all, you should always value equity at zero. Neither your landlord nor the guys at the farmers' market want your stock certificates, which are overwhelmingly likely to end up worthless (if they aren't already). Second, most companies don't pay bonuses. Those that do usually have a bonus pool that depends in some way on the company's success in the marketplace, and they can almost always abolish bonuses at ma…

Serious question: if you value equity at 0, then ( ceteris paribus ) given a choice between (1) an offer at $150,000 and 50 basis points and (2) an offer at $150,100 and 0 basis points, you should choose option (2). Given that: why should any employer offer equity?

I don't know about should, but an employer would offer equity because employees will often overvalue it.

IMO, equity is a great benefit. You might not get the most comprehensive benefits package, or you might work more hours at early stage company. Instead, you get equity.

Re: Talking About Money

#253

Post by sokoloff » Sat, May 02, 2015, 2:04 AM UTC

takinola wrote: post #145

bcg1 wrote: post #65

Earlier quoted context omitted.

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?

Imagine you are running a business making $30 million in annual revenue. You run into someone that reliably assures you they are able to increase your sign-up rate by 1% by optimizing your sign-up flow, SEO, and other general magic. This 1% increase in sign-up rates is easily worth $1 - 3 million to you. As a business man, the only question in your mind should be "When can you start?"

1% of $30MM is $300K, not $3MM. (Few companies trade at 10x sales, so that advice isn't worth $3MM.)

Re: Talking About Money

#254

Post by AndrewKemendo » Sat, May 02, 2015, 2:09 AM UTC

Hmm. We just ask people how much they want to make and give them as much time as they need to respond.

If it's higher than we can pay, then we say sorry we can't pay that. If it's way lower than we would expect we usually tell them that we wouldn't expect to pay less than X for their skills and experience.

This has worked great so far because if someone came back with a really low number and we just took it, then a month later they will realize they undershot and then they feel awkward about bringing it up - so, best to avoid that.

My ethos is: Pay people enough for them to not think about money. If you are only working for me for the pay then it's probably not going to be a great working relationship. They are better off going to work at megacorp where they can sham.

Re: Talking About Money

#255

Post by ghaff » Sat, May 02, 2015, 2:13 AM UTC

tptacek wrote: post #234

fredkbloggs wrote: post #188

Earlier quoted context omitted.

First of all, you should always value equity at zero. Neither your landlord nor the guys at the farmers' market want your stock certificates, which are overwhelmingly likely to end up worthless (if they aren't already). Second, most companies don't pay bonuses. Those that do usually have a bonus pool that depends in some way on the company's success in the marketplace, and they can almost always abolish bonuses at ma…

Serious question: if you value equity at 0, then ( ceteris paribus ) given a choice between (1) an offer at $150,000 and 50 basis points and (2) an offer at $150,100 and 0 basis points, you should choose option (2). Given that: why should any employer offer equity?

Utility functions and such? Or, even without trying to cram behavioral economics into a more traditional framework. At some level, it may be rational to trade off some measure of certain income into a big (but very hard to define percentages of) bet in terms on money/being in at ground floor of something great.

It may be a sucker bet in a lot of cases. But expected value (given how hard that may be to compute for unicorns) isn't always the best bet either given vast uncertainties.

Re: Talking About Money

#256

Post by Roy78 » Sat, May 02, 2015, 2:16 AM UTC

As someone who works for the government and makes almost more than 50% less than those in the private sector doing the same thing (according to national studies for my profession at my level) this is depressing. I don't know, in the back of my mind I want to launch my own startup and get out of where I am now. My equal co-worker just left a month ago and is making 5x what she was making (in a senior capacity to myself) really makes me question myself. Although, I am getting by just fine and living 10 minutes from work is hard to let go.

Re: Talking About Money

#257

Post by lscore720 » Sat, May 02, 2015, 2:22 AM UTC

minot wrote: post #244

lscore720 wrote: post #235

Earlier quoted context omitted.

Recruiter here. Some may not like this answer, but: honesty is the best policy. Bluffing, or LYING, could backfire - especially if things escalate and they eventually learn about this. It's bullshit, especially for those who began their careers during a time of salary deflation. However, the right employer will NOT base your future salary solely on your current. It should simply be one data point in the process - you…

Sorry but I disagree. Nobody has ever asked me how much I currently make or I made at my last position. It is just not relevant. You make an offer. I might or might not take it. Asking me to reveal my current salary first is silly. If you insist on this information before the conversation can continue, then conversation is over.

I was addressing the bluff question. Further down in the comments, I address your point - note: I mostly agree with you.

Re: Talking About Money

#258

Post by fecak » Sat, May 02, 2015, 2:25 AM UTC

ghaff wrote: post #109

fecak wrote: post #95

Earlier quoted context omitted.

I've been recruiting engineers for almost 20 years, and I have probably had a dozen cases where a client asked for a pay stub around the time an offer is presented. It's obviously rare, and most of the time it was for high-ticket talent that seemed to be paid noticeably above market rate.

I have to say, I find that sorta weird. At that point, I would think if the pay stub didn't square with the claimed salary (and there was no convincing explanation for the difference), they'd almost have to not hire the person. And, if it did square, it's like they'd already decided the price tag was too rich for their blood.

Excellent points, and I'm not necessarily condoning the practice (I don't control that). It does seem they are trying to call a bluff where you either expose the bluffer or get locked in to a rate above market. I can't recall an instance where the stub was provided and the client didn't make a competitive offer, but my data set isn't large.

Re: Talking About Money

#259

Post by ghaff » Sat, May 02, 2015, 2:34 AM UTC

fecak wrote: post #258

ghaff wrote: post #109

Earlier quoted context omitted.

I have to say, I find that sorta weird. At that point, I would think if the pay stub didn't square with the claimed salary (and there was no convincing explanation for the difference), they'd almost have to not hire the person. And, if it did square, it's like they'd already decided the price tag was too rich for their blood.

Excellent points, and I'm not necessarily condoning the practice (I don't control that). It does seem they are trying to call a bluff where you either expose the bluffer or get locked in to a rate above market. I can't recall an instance where the stub was provided and the client didn't make a competitive offer, but my data set isn't large.

Maybe it's a "There must be a reason they value them so much" (even though we don't see it) sort of thing. Hardly an uncommon situation. Doesn't mean it worked out in the end :-)

Re: Talking About Money

#260

Post by saryant » Sat, May 02, 2015, 2:38 AM UTC

dcosson wrote: post #208

saryant wrote: post #15

Earlier quoted context omitted.

Re 2), you should make sure your salary is at market-level and more or less ignore equity. Chances are you'll be let go or the company will collapse before it's worth anything. If you have a reasonable salary, equity is just a cherry on top, but if an employer tries to get you to trade cash today for a startup lottery ticket, say no. This is especially important early in your career given the time value of money. An…

Agree this is good advice a lot of the time. But just to offer an alternative possibility, there are other things that can affect the equation too. For instance, if you end up at the right startup you might learn a lot more than you would in the same amount of time at the alternative company. If you gave up $20k over 2 years by making, say, $100 instead of $110k at the startup, but then are able to jump to a job maki…

I agree in broad strokes, in that I did exactly that with my last company. My first full-time programming job was as hire #1 as a tech startup (I was fired last month after two years) and while I'm now consulting, the full-time offers I'm receiving amount to a 50% pay raise, partly because I was able to build up so much experience in hot areas like Akka and Docker.