“I made 3 CEOs rich – So why am I broke?”
1–10 of 42 posts
Re: “I made 3 CEOs rich – So why am I broke?”
#2There's a concept called "being the master of your own destiny". It requires that one views themselves through a lens of a business owner even while having a W2 job. Someone that believes a CEO when the latter says "I will take care of you" has not developed that ability. It's like believing a customer that walks into your shop and says "I will bring the money tomorrow."
Re: “I made 3 CEOs rich – So why am I broke?”
#3And this, boys and girls, is why you should never join a second start-up. Join one early, see how it works & learn as much as you can. Do not expect $$$ - you will not make any. Then decide if you want to start your own, or want comfortable well-paid employment at GOOG/AAPL/FB/etc
Do not expect to make money from a start-up unless you started it. If you did not start it, you are the disposable labour. Sorry.
Re: “I made 3 CEOs rich – So why am I broke?”
#4Off-topic, but if Forbes don't disable their adblocker-blocker, they will soon be broke too...
Re: “I made 3 CEOs rich – So why am I broke?”
#5Company 1) "I got my first job working in the marketing department for a wireless device company, ten years ago. I got paid the market rate which was very good, but as you know, Northern California is an expensive place to live. My first company got sold. I had stock options but they ended up being worthless after the deal."
---> That does not count. You stayed for 10 years, learned a lot, and it seems you came in at the wrong time and were under water. It is unclear whether your CEO made "millions," but if somebody did, it was the owners, and you were not a significant owner. And you chose to live in the Bay Area, so hey, it costs to be there but you got compensated by living in a great spot. So you chose to spend the money on real estate, blah blah. Seems a little whiney right now since there are people who are REALLY struggling to live in SF and feed their families. It does not seem that you were in this category.
Company 2) "The CEO told us, 'We have an exit strategy. We will get bought by a public company and your stock options will be converted into stock in the company that buys us, or else we will go public and then your stock options will have liquidity.' That was false. We ended up merging with another company and then the combined firm was bought by a privately-owned tech company and once again I had nothing to show for my hard work. When I got laid off the second time, I had a huge monthly expense profile and I had to get a new job quickly. "
---> No, it was not FALSE. It simply did not work out the way the CEO thought it would. Now, it's not like CEOs don't want their company to be the next hot IPO or acquisition target, but hey, welcome to the real world. Things CHANGE. It is unclear whether the CEO this time made "millions," but I assume some people did: the "owners." Again, you were not an OWNER, or at least it is unclear that you had skin in this second company. Did you take a huge hair cut to work there? Did you invest your own money? But again, you kept living beyond your means. HINT HINT.
Company 3) "I had a couple of opportunities, and I took a job with a well-known serial entrepreneur who has been on many magazine covers. Once again, just a few months ago, I got laid off with three months of severance. That’s better than nothing, but my marketing programs and advice helped my ex-boss, the CEO, to make hundreds of millions of dollars. Now I sit in northern California with a $6,500/month mortgage and no job, and I’m disgusted. What am I doing wrong? How could I make three CEOs filthy rich and make nothing more than my weekly salary for myself?"
---> well, it seems you were not given significant ownership. And why would you spend $6500 mortgage if you could not afford it?
It seems your best decision was to move to San Francisco and buy a house. What is your return on that? I bet not insignificant. You deserve that. I don't see how you deserve any of the millions the owners got. Seems you got compensated well for the job you did, so it seems your bosses were square with you on each pay day right?
Or are investors now supposed to dilute themselves on the company they own when they are already paying market rate for the people who work at their companies?
Re: “I made 3 CEOs rich – So why am I broke?”
#6Off-topic, but if Forbes don't disable their adblocker-blocker, they will soon be broke too...
yeah, i hit that wall, then came into the comments..... on the plus side i just saved hella time by not reading the article, so i guess im the winner either way.
Re: “I made 3 CEOs rich – So why am I broke?”
#7Being an employee at a startup does mean you took a risk, but nothing in comparison to the founders who built it.
Most employees don't understand that a lot of things change along with way when building a company. Most product companies start with dreams of IPO or getting sold to a large company at a massive valuation. This seldom happens for the vast majority of startups - who either go bust, sell to slightly larger players or becoming SMBs for life.
The owners of a company will make money in most of the above cases - employees won't, and rightfully so.
Re: “I made 3 CEOs rich – So why am I broke?”
#8Dear Abby type article. No actual data on compensation packages (salary, % options of company) for any of the companies, nor a clear financial perspective of any of the "exits" these companies saw.
Spidey sense is tingling.
Re: “I made 3 CEOs rich – So why am I broke?”
#9And this, boys and girls, is why you should never join a second start-up. Join one early, see how it works & learn as much as you can. Do not expect $$$ - you will not make any. Then decide if you want to start your own, or want comfortable well-paid employment at GOOG/AAPL/FB/etc Do not expect to make money from a start-up unless you started it. If you did not start it, you are the disposable labour. Sorry.
If people took your advice Silicon Valley would be toast.
Re: “I made 3 CEOs rich – So why am I broke?”
#10Being an employee at a startup does mean you took a risk, but nothing in comparison to the founders who built it. Most employees don't understand that a lot of things change along with way when building a company. Most product companies start with dreams of IPO or getting sold to a large company at a massive valuation. This seldom happens for the vast majority of startups - who either go bust, sell to slightly larger…
> Being an employee at a startup does mean you took a risk, but nothing in comparison to the founders who built it.
Bullshit. I hate this sort of rhetoric. Founders took no more risk than the first employees. The founders got funding, and if they did not they convinced some poor schlub to waste their time on the startup. That's the only difference between early startup employees and founders. Many employees at tech startups may be just as capable as the founders, but are not in the same position of power. That's the only difference. Founders take no more risk and get much more reward, if a startup succeeds, than employees, often not for any good reason other than they did it and the employee did not. I mean obviously chances of success are only ~If a startup fails the founders still got paid a salary, just like employees, as long as they got funding. If not then they paid out money out of their pocket, to pay a few employees a small salary which was below market. This is the only case in which founders come out worse off than if they took a job with a salary, so take more risk. The rest of it, their outcome is much better just because they did it and you did not and you believed them.