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TLDR Stock Options

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Re: TLDR Stock Options

#101

Post by s73ver »

wtvanhest wrote: post #46
ryacko wrote: post #41

Earlier quoted context omitted.

information asymmetry is part of the secret to business success

I assume you are not being sarcastic. It is true, but in this case its a limiting to early stage companies. I know, I personally will not join one that doesn't disclose liquidation preference, type of shares I had etc. unless they were offering more base comp than big corp to offset my risk of joining a company with a 65%+ chance of failure. By disclosing terms of the shares, great companies could attract better peop…

Yeah, but does that really matter if, after you've joined, they start raising money and clam up about the terms?

Re: TLDR Stock Options

#102

Post by blakecaldwell »

mandevil wrote: post #42
duderific wrote: post #34

I have a bunch of options in my company, but I don't know what the total number outstanding are, so I have no idea what percentage of the company I own. 1) Is this a common scenario? 2) Is there a way I can find out what the total number outstanding are?

Send an email to the people who manage the options. Say that you are trying to figure out your finances, and would like to know how many options are outstanding. Note that there are complicated ways that that more options might appear, depending on the company (e.g. sometimes debt can convert to equity) that they might be a bit more hesitant to talk about, but they should be pretty open about the total number of shar…

This. If you have a CFO, contact that person. If not, then anyone in finance, or a partner. Everyone is there for pay. This is a reasonable request.

Re: TLDR Stock Options

#103

Post by tsm »

I'll​ never forget when a startup tried to poach me to be Employee #2 or 3 and refused to even match my previous salary and suggested that I really wasn't taking their equity (.15%, I think?) seriously enough. I told them that if they had a billion dollar exit in five years it still wouldn't bring me up to what I wanted, and then they said, "Well, all the tech guys we talked to said $YOUR_COMPANY overpays by 20%. We also think that we're spending too much time talking about money here and are worried you have the wrong priorities".

Re: TLDR Stock Options

#104

Post by jkubicek »

orthoganol wrote: post #39

Yep, IMO unless you are a founder, if your company isn't one of the top companies of the decade your 4-6 years of pay-cut toil as an early employee will likely just not be worth it, at all. The expected value of working at an early startup gets overestimated, by a lot. If you're optimizing your career, either make the most you can at an established company, or start a startup. Or... work at an enlightened startup, th…

I'd love to see stats on total comp for engineers at "normal" established companies. Sure, everyone knows that you can make a lot more at Google / Apple / Facebook, but it's also significantly harder to get those jobs and not everyone can.

If you're a SWE at Oracle, are you really going to make much more than you'd make at a 50 person startup? According to Glassdoor, not really.

https://www.glassdoor.com/Salaries/san-francisco-senior-soft...

Just look at the Oracle SWE salaries: https://www.glassdoor.com/Salary/Oracle-Senior-Software-Engi...

Even including total comp, that's barely more than I made the the first <20 person startup I joined.

Re: TLDR Stock Options

#105

Post by feral »

ryandrake wrote: post #73
orthoganol wrote: post #69

Earlier quoted context omitted.

> Joining a series B startup and waiting a couple years is the easiest, risk adjusted way to make a bunch of money. Sorry, what?

I'm glad I'm not the only one who did a double-take at that statement. The key qualifier is "risk adjusted", but that's not really meaningful from the employee's standpoint: You can only bet on one company at a time. Imagine what kind of stock investments you'd make if you were only allowed to invest in one stock at a time. Let's say 10% of start-ups succeed to the point where employee 100 makes "a bunch of money", w…

I'm not sure what you mean by 'expectation of one case' here, but just to clarify: rolling a ten-sided dice, 10 times, gives a 65% chance of rolling at least one 10. So you still have a 35% chance of zero 'wins'.

I can't comment on the rest of your model, but its worth keeping in mind how the binomials shake out.

Re: TLDR Stock Options

#106

Post by vacri »

orthoganol wrote: post #39

Yep, IMO unless you are a founder, if your company isn't one of the top companies of the decade your 4-6 years of pay-cut toil as an early employee will likely just not be worth it, at all. The expected value of working at an early startup gets overestimated, by a lot. If you're optimizing your career, either make the most you can at an established company, or start a startup. Or... work at an enlightened startup, th…

> If you're optimizing your career, either make the most you can at an established company, or start a startup.

I feel I'm optimising my career, working as a sysadmin at a small startup. It's not optimising for money, but I get to touch a lot of tech and design a lot of infrastructure. Make a few mistakes and learn from them. I'm not implementing someone else's design here.

Re: TLDR Stock Options

#107

Post by ryandrake »

feral wrote: post #105
ryandrake wrote: post #73

Earlier quoted context omitted.

I'm glad I'm not the only one who did a double-take at that statement. The key qualifier is "risk adjusted", but that's not really meaningful from the employee's standpoint: You can only bet on one company at a time. Imagine what kind of stock investments you'd make if you were only allowed to invest in one stock at a time. Let's say 10% of start-ups succeed to the point where employee 100 makes "a bunch of money", w…

I'm not sure what you mean by 'expectation of one case' here, but just to clarify: rolling a ten-sided dice, 10 times, gives a 65% chance of rolling at least one 10. So you still have a 35% chance of zero 'wins'. I can't comment on the rest of your model, but its worth keeping in mind how the binomials shake out.

Ack, you're absolutely right. Don't know where I was going with the hypothetical example but my math was totally wrong.

Re: TLDR Stock Options

#108

Post by evancharles »

austenallred wrote: post #55
orthoganol wrote: post #39

Yep, IMO unless you are a founder, if your company isn't one of the top companies of the decade your 4-6 years of pay-cut toil as an early employee will likely just not be worth it, at all. The expected value of working at an early startup gets overestimated, by a lot. If you're optimizing your career, either make the most you can at an established company, or start a startup. Or... work at an enlightened startup, th…

I completely disagree. It's really not hard to find a company with great product market fit, say series B, get a bunch of equity, a decent salary, and wait a couple years for your equity to be valuable. Assuming the company is successful (of course there's risk there, but by series B a lot has been mitigated), your equity will likely be quite valuable. I actually think, risk adjusted, that's the easiest way to make a…

If this is easy for you, you should quit engineering and run a growth equity fund.

Re: TLDR Stock Options

#109

Post by brianwawok »

jkubicek wrote: post #104
orthoganol wrote: post #39

Yep, IMO unless you are a founder, if your company isn't one of the top companies of the decade your 4-6 years of pay-cut toil as an early employee will likely just not be worth it, at all. The expected value of working at an early startup gets overestimated, by a lot. If you're optimizing your career, either make the most you can at an established company, or start a startup. Or... work at an enlightened startup, th…

I'd love to see stats on total comp for engineers at "normal" established companies. Sure, everyone knows that you can make a lot more at Google / Apple / Facebook, but it's also significantly harder to get those jobs and not everyone can. If you're a SWE at Oracle, are you really going to make much more than you'd make at a 50 person startup? According to Glassdoor, not really. https://www.glassdoor.com/Salaries/san…

Is Oracle a good example? I think they are known for abusing H1Bs.

Look at another mid size company as a developer.

Re: TLDR Stock Options

#110

Post by mahyarm »

wtvanhest wrote: post #46
ryacko wrote: post #41

Earlier quoted context omitted.

information asymmetry is part of the secret to business success

I assume you are not being sarcastic. It is true, but in this case its a limiting to early stage companies. I know, I personally will not join one that doesn't disclose liquidation preference, type of shares I had etc. unless they were offering more base comp than big corp to offset my risk of joining a company with a 65%+ chance of failure. By disclosing terms of the shares, great companies could attract better peop…

It might be part of the reason why you tend to see older people in bigco and younger people in startup co.
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