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Startup CEOs who gave up fortunes to turn employees into millionaires

businessinsider.com

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Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#11

Post by georgemcbay »

clamprecht wrote: post #8

The article says: > There’s a startup in New York everyone talks about, and the things they say aren't very nice. The startup sold for ~ $80 million and the founders got rich. But, as the rumors go, no other employee made more than $50,000. Does anyone know which startup they are referring to? carrentals.com? something else?

Hunch fits the location and approximate acquisition price, but I can't speak to how screwed over the non-founders were (or weren't).

Not sure that "everyone talks about" it (though that applies even more so for carrentals.com, IMO). Maybe they meant "everyone in NYC talks about it".

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#12

Post by jacquesm »

abat wrote: post #9

Do employee stock options usually not vest automatically upon acquisition? The SinglePlatform story made it sound like employees get screwed if there's an early exit before their options had fully vested.

That very much depends on the contract. I have said this before and I'll repeat it on the off chance that it will save someone's bacon one day: insist on accelerated vesting clauses in change of control situations.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#13

Post by vinceguidry »

x0x0 wrote: post #6
vinceguidry wrote: post #4

Earlier quoted context omitted.

This comment reads as entitled to me. Startup founders have an insane number of things on their plate, and that list just keeps growing and growing. Startup employees work hard, but the founders still bear most of the risk and responsibility. What really needs to happen is for new ways to organize startups to distribute the risks and responsibilities better, so that it's not up to the goodness of the founder's heart…

And great employees can always go to {google, fb, twitter, microsoft, salesforce, etc} and get paid $250-$300 / year in cash or cash equivalents, instead of $125-$150 plus lottery tickets. In fact, I remember reading that round A is the worse time for an employee to join a startup: the large grants are gone, but the business isn't derisked, so your lottery tickets still have shit ev.

Right. Ultimately participating in a startup as an employee and as a founder are two totally different life choices with very different skill sets required and very different arcs. Founders have to juggle making sure the company is on track building value with courting investors, keeping track of the balance sheet, designing the product because they're the only ones with enough skin in the game to do them effectively.

It's a different level of hard work. And a different set of circumstances if the business fails.

Honestly as a society, we should be less focused on raising the mostly already-high ethical standards of busy founders and more on providing education and support to the next generation of startup founders and startup employees. Employees can bounce to any number of happy-to-have-them bigcos because those skills are almost as rare as those you need to be a founder.

If you're looking for a bottleneck, look in the mirror. There's always more that can be done to build the community. There's a huge hunger for tech skills, tech companies, tech products.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#14

Post by aidenn0 »

abat wrote: post #9

Do employee stock options usually not vest automatically upon acquisition? The SinglePlatform story made it sound like employees get screwed if there's an early exit before their options had fully vested.

I've never been offered options that vest upon acquisition. I don't know what's usual though.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#15

Post by jacquesm »

kjs3 wrote: post #2

They gave up some money to reward valuable employees. That's not, per se , being magnanimous or generous, it's being smart businessmen. All of these founders made out just fine, financially. When they start their next big thing, they'll be remembered not only as the guys who had a successful exit, they'll be remembered as the guys took care of their people along the way. That's about the smartest way to recruit top t…

That's a pretty cynical worldview. If a founder doesn't have to share his wealth because of a bunch of paper and decides to do it anyway that is generous first and possibly good business second.

After all there is no obligation on his part to ever do another start-up, there is no obligation on those rewarded to join in the future and the incidence of 'repeat teams' is low enough that I don't think it is a factor at all.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#16

Post by kjs3 »

teej wrote: post #5
kjs3 wrote: post #2

They gave up some money to reward valuable employees. That's not, per se , being magnanimous or generous, it's being smart businessmen. All of these founders made out just fine, financially. When they start their next big thing, they'll be remembered not only as the guys who had a successful exit, they'll be remembered as the guys took care of their people along the way. That's about the smartest way to recruit top t…

I don't think you are giving these founders enough credit. Startup acquisitions, not unlike fundraising, can be very emotional. Acquirers can go from hot to cold very quickly if they hear the wrong thing or get the wrong vibe. The founders went to great lengths to structure the deal in a way that compensated their employees like this. It's likely that they put the entire deal at risk to do so. That, in my mind, stron…

per se: by or in itself or themselves; intrinsically.

I understand that some (most) of these guys are, in fact, doing this because it's the right thing to do and they are, in fact, that invested. I merely wanted to point out, counter to the tone and implication of the article, that's not the only reason to do this and they were still handsomely rewarded for the risk they took.

Conversely, I want to point out to anyone who thinks not doing the right thing wrt your team so you can pocket a few extra percentage points can have a negative consequence.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#17

Post by x0x0 »

JimboOmega wrote: post #7
x0x0 wrote: post #6

Earlier quoted context omitted.

And great employees can always go to {google, fb, twitter, microsoft, salesforce, etc} and get paid $250-$300 / year in cash or cash equivalents, instead of $125-$150 plus lottery tickets. In fact, I remember reading that round A is the worse time for an employee to join a startup: the large grants are gone, but the business isn't derisked, so your lottery tickets still have shit ev.

Is the going rate $250-$300k these days? Honestly, though - beyond just larger equity grants, I'd like to see companies have people get rewarded when the company does well... Through some kind of bonus (in equity or cash). It seems like most companies either have bonuses that are pretty much an expected part of salary, or they have no bonus in any situation. I've only really been part of the latter, though.

For a highly experienced senior engineers capable of largely independent delivery of projects with roughly 8-10 years of experience on a platform, very deep understanding of at least one language with a bunch of experience in one or two more, etc etc seem to be getting about that much including grants at the big companies, particularly after being there perhaps 3 years and getting grants annually.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#18

Post by x0x0 »

clamprecht wrote: post #8

The article says: > There’s a startup in New York everyone talks about, and the things they say aren't very nice. The startup sold for ~ $80 million and the founders got rich. But, as the rumors go, no other employee made more than $50,000. Does anyone know which startup they are referring to? carrentals.com? something else?

digg seems to be famous for doing well by Kevin Rose and not by anyone else. It happens out in the valley too.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#19

Post by JoshTriplett »

x0x0 wrote: post #6
vinceguidry wrote: post #4

Earlier quoted context omitted.

This comment reads as entitled to me. Startup founders have an insane number of things on their plate, and that list just keeps growing and growing. Startup employees work hard, but the founders still bear most of the risk and responsibility. What really needs to happen is for new ways to organize startups to distribute the risks and responsibilities better, so that it's not up to the goodness of the founder's heart…

And great employees can always go to {google, fb, twitter, microsoft, salesforce, etc} and get paid $250-$300 / year in cash or cash equivalents, instead of $125-$150 plus lottery tickets. In fact, I remember reading that round A is the worse time for an employee to join a startup: the large grants are gone, but the business isn't derisked, so your lottery tickets still have shit ev.

> instead of $125-$150 plus lottery tickets.

If you're working at a startup and getting $125-150k, you're lucky. Many people work at startups for half of that or less, plus those lottery tickets.

Re: Startup CEOs who gave up fortunes to turn employees into millionaires

#20

Post by tdicola »

JimboOmega wrote: post #7
x0x0 wrote: post #6

Earlier quoted context omitted.

And great employees can always go to {google, fb, twitter, microsoft, salesforce, etc} and get paid $250-$300 / year in cash or cash equivalents, instead of $125-$150 plus lottery tickets. In fact, I remember reading that round A is the worse time for an employee to join a startup: the large grants are gone, but the business isn't derisked, so your lottery tickets still have shit ev.

Is the going rate $250-$300k these days? Honestly, though - beyond just larger equity grants, I'd like to see companies have people get rewarded when the company does well... Through some kind of bonus (in equity or cash). It seems like most companies either have bonuses that are pretty much an expected part of salary, or they have no bonus in any situation. I've only really been part of the latter, though.

Depends on the area but 300k is probably pushing it outside management and less than 15+ years of experience. Most fresh out of college offers at big companies these days I hear are slightly north of 100k, so 150-200k for senior folks isn't out of the ordinary.
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