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Working for a startup makes less sense

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Re: Working for a startup makes less sense

#11

Post by fortran77 »

seattle_spring wrote: post #4

> Equity agreements should not be intentionally confusing or designed to screw over employees. Totally agree with this. Unfortunately I think there might be about 5 startups left if this idea were widely implemented.

Your odds of making money are much better with a young-ish but publicly traded company than with a startup. Even if a startup is successful, you won't see much money unless you were one of the founders or early investors. There's a million ways the stock options that early employees get can be made worthless (or worth-little).

Re: Working for a startup makes less sense

#14

Post by vandyswa »

fortran77 wrote: post #11
seattle_spring wrote: post #4

> Equity agreements should not be intentionally confusing or designed to screw over employees. Totally agree with this. Unfortunately I think there might be about 5 startups left if this idea were widely implemented.

Your odds of making money are much better with a young-ish but publicly traded company than with a startup. Even if a startup is successful, you won't see much money unless you were one of the founders or early investors. There's a million ways the stock options that early employees get can be made worthless (or worth-little).

I have BEEN one of the founders, and still didn't make any money off the ultimate sale. There are far too many games with share classes, VC-funded bridge loans, and preferred investor incentives. The only way to win is to not play the game.

Re: Working for a startup makes less sense

#15

Post by sayrer »

willbw wrote: post #3

While I understand your sentiment, there is a 2015 Dan Luu article which goes into far more depth saying basically the same thing: https://danluu.com/startup-tradeoffs/ I can see you just started writing on this blog so I don't want to discourage you, but I was struck by the formatting of your notes page and this post being so similar to Dan's along with the topic and content of this post. Keep writing but I would ma…

I've always thought this problem to be overstated. It doesn't make financial sense to work for a startup, but the upside is that you get to work on something you care about (and even the startup salaries aren't that bad in the grand scheme).

Re: Working for a startup makes less sense

#16

Post by seibelj »

There is a lot of capital out there, what needs to happen is the number of startups shrink and the well funded ones pay more money - even more than google or FB pay. Simple as that! If you are sad that you can’t get a professional team on a $1mil seed, I have absolutely no empathy for you because I’m an employee and this is the free market.

Now, if you really want to make it more enticing, some things that would move the needle for me other than comparable salaries (although more cash is #1):

- Larger equity that automatically ups if it will be diluted, and the moment any shares vest I can sell them in the private market.

- Transparent cap table.

- If the founders take cash off the table, I can as well, and no preference for founders.

- 10 years after leaving to exercise my shares. I don’t want to have a 3 month trigger that handcuffs me to prevent a giant cap gains bill on “paper money” when the fair market value is way higher.

- Reasonable working hours.

- Flexible work from home policy.

But overall, go raise more and start offering more cash, because I assume 95% of startups are total failures.

Re: Working for a startup makes less sense

#17

Post by guelo »

It's VCs' and founders' fault for always diluting employees on the big exits. If they want to gain back trust we need iron-clad poison-pill provisions that prevent employees from getting screwed out of their equity.

Re: Working for a startup makes less sense

#18

Post by endorphone »

willbw wrote: post #3

While I understand your sentiment, there is a 2015 Dan Luu article which goes into far more depth saying basically the same thing: https://danluu.com/startup-tradeoffs/ I can see you just started writing on this blog so I don't want to discourage you, but I was struck by the formatting of your notes page and this post being so similar to Dan's along with the topic and content of this post. Keep writing but I would ma…

I don't think Dan Luu has some sort of eminent domain over this topic -- I've seen literally hundreds of similar posts, most long preceding and covering the same topic. It's a pretty common decision for people in this field to face, and lots of people have lots of takes.

Not to mention that his post format isn't remotely like DanLuu's. It reminds me more of old Philip Greenspun.

Not that "basic text" is some sort of copyright or something.

Re: Working for a startup makes less sense

#19

Post by aeternum »

Yes you will probably make more at an established company, but your rate of growth can be much higher at a startup.

I worked at a large tech company for 3 years before joining a startup, and learned more in the first month at the startup than the full 3 years at the large tech company. I was able to design and implement a service in a matter of days, whereas at the large tech company those 3 days would easily spent convincing people that the service is needed in the first place. Direct exposure to customers also is really interesting and changes you as an engineer.

It's definitely a no guardrail environment, in the early days we had a bug that directly cost us a large customer pilot. No better teacher than experience, we did not make that mistake twice.

Re: Working for a startup makes less sense

#20

Post by AnimalMuppet »

JKCalhoun wrote: post #10
rev0lutions wrote: post #7

I love how the article ranked right above this one is titled "Downsides to working at a tech giant".

LOL, I noticed as well. As I was reading "Downsides to working at a tech giant" it occurred to me that the alternative to working for a tech giant is not necessarily a start-up: I would probably work for myself — freelance. So, in fact the two articles can both be right. ;-)

You can also work in tech, for a company, but for something that is neither a giant nor a startup. There's plenty of such jobs out there. In fact, the majority of tech jobs probably fit that category
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