How I negotiated my startup compensation (with numbers) • Hacker News Board

Re: How I negotiated my startup compensation (with numbers)

#141

Post by mjn » Tue, Aug 21, 2012, 11:37 PM UTC

jwoah12 wrote: post #79

nicolethenerd wrote: post #72

Earlier quoted context omitted.

Where do you live?!?! I spend around $200/mo on food, $250 tops, in Manhattan. Mostly yummy healthy stuff from Trader Joe's. Or did you mean $500/mo for two people?

That's about $8/day. I probably spend close to 10x that on food living in Manhattan. Granted I go out a lot and that's including drinks at dinner, but even not going out to eat at all and fasting every other day I have no idea how I'd only spend that much.

I can see it if you go out a lot, but for groceries it's fairly hard for me to spend more than $200/mo. I don't have a car, so just physically carrying $500/mo of groceries to my apartment would be quite an effort! I can't imagine how I'd do that unless I bought mainly stuff with a really high price:weight ratio, like steak or something, which I do occasionally, but don't eat as a staple food.

Today, for example, I carried what seemed like an uncomfortably heavy set of bags, yet it only came out to about $30, and will probably last me the rest of the week: 2 lbs pork tenderloin (2x $5), 5 lbs potatoes ($3), 2 lbs tomatoes ($4), 1 lb lentils ($3), 2 lbs onions ($2), 1 head broccoli ($1), 12x eggs ($3), 2 lbs nectarines ($3).

I think I more often run into the problem of buying way more than I can carry/eat, and it still doesn't cost much. I mean, I like nectarines, but 2 pounds of nectarines is a lot to finish before they get overripe, so some of that might get wasted. But since they cost me damn near nothing, that's alright.

Re: How I negotiated my startup compensation (with numbers)

#142

Post by dkador » Tue, Aug 21, 2012, 11:38 PM UTC

tomkarlo wrote: post #114

dkador wrote: post #93

Earlier quoted context omitted.

I think that's a fair thing to assume. Full disclosure: I'm Dan, one of the other co-founders of Keen. I actually did the negotiation with Michelle - Kyle delivered our original offer. But she's one of my best friends as well. As is Kyle. As is our other co-founder and the two other people on our team. The negotiation was awkward, but I'm personally convinced that we're a stronger team because of our close personal b…

Did the team contemplate in making this offer that if something went sour in that relationship, you'd end up with a CEO who has both personal drama and potentially a very difficult situation in the office, given that she'd be reporting to him? How did your corporate counsel feel about this? Your board? If she's not reporting to the CEO, how does her new manager feel about having a team member who's his bosses' fiance…

Of course we've thought of this (and a number of other hypotheticals). And of course we've discussed it, openly amongst the entire team as well as behind closed doors with our board and counsel. It does complicate things. In the end we felt like the positives (having Michelle on the team so we can take advantage of her strengths) outweigh the potential negatives. It could absolutely turn out badly. As with almost everything else in startups, we're making a hedged bet. And you're free to think we've made a mistake, of course, as long as you don't leave believing we haven't thought a ton about this. :)

It would be different if we were inserting Michelle into some rigid organization structure, especially if she was reporting to somebody other than our CEO. We don't have that kind of structure, though, and even if we did, we would never tell a frontline manager to hire somebody based on nepotism. That's a sure-fire way to kill a company in my book.

Re: How I negotiated my startup compensation (with numbers)

#143

Post by richcollins » Tue, Aug 21, 2012, 11:39 PM UTC

osxwm wrote: post #100

richcollins wrote: post #67

Another idea: Contract for $200 an hour for 6 months and make $200,000. Invest that into the company, get 5 - 10%, and join as an employee to influence the outcome of your investment. Even better idea: Do the same but invest it into your own company. Keep 99% and convince someone else to take 1% + pocket change to work for you for a few years.

Go read about investor qualification and why taking on an unqualified investor at an early stage can hurt your company.

You're right, you'd have to wait 2 years:

have made at least $200,000 each year for the last two years (or $300,000 together with his or her spouse if married) and have the expectation to make the same amount this year."[1] This rule came into effect in 1933 by way of the Securities Act of 1933.[citation needed]

You wouldn't for my "even better" option.

Re: How I negotiated my startup compensation (with numbers)

#144

Post by fratis » Tue, Aug 21, 2012, 11:40 PM UTC

wetzler wrote: post #106

fratis wrote: post #4

A tip for people writing on corporate blogs: let us know who you are up front. Whether there's a byline under the title or a short intro sentence/paragraph preceding the article, knowing who you are gives the reader a way to frame what your story. Because the tech industry is so heterosexual male-dominated, when I read that the author was engaged to the CEO, I first assumed I had misunderstood, then I thought the aut…

Thanks for the feedback. I realized the article was confusing so I added an intro. However, I feel no need to mention my gender or sexuality when introducing myself. If I didn't have a clearly female name, should I have said "Hi, I'm Pat, and I'm a female in the tech industry"?

Ahh, yikes. Sorry. I should've been clearer.

I didn't mean (though it certainly sounded that way) that it's necessary for the reader to know your gender. Looking back, in fact, I realize that I weakened my position by even mentioning it (especially in the vague, imprecise way that I did).

I brought up gender because it was confusing (and I, along with other readers here, felt misled) when you – very casually, I might add – mentioned you were engaged to the CEO, up until which point I'd been under the false impression that you were a man.

So, to answer your question: no, you wouldn't have needed to inform the reader of your gender if you had an ambiguous name because what's really important here is not that you're a woman but that you're engaged to the CEO. Whether you're a man or a woman is irrelevant: all that is relevant is that you have a close personal history with the guy you're negotiating with, a fact which, again, completely skews the context of the article.

Re: How I negotiated my startup compensation (with numbers)

#145

Post by WildUtah » Tue, Aug 21, 2012, 11:44 PM UTC

joezydeco wrote: post #94

potatolicious wrote: post #84

Earlier quoted context omitted.

The relevance of health care in this negotiation is contextual. For young, healthy, child-less people, their usage of health care is going to be minimal at best - and really amounts of catastrophic insurance against accidents or major illnesses. This changes dramatically if the individual has children, chronic illnesses, or other persistent conditions that will require regular use of the medical system. And also, ouc…

Yeah, they're fronting the other $1400 of the premium. We're a very small company and getting completely dicked by Blue Cross / Blue Shield. Doesn't help that most of the principals are senior people with families. I also chose the PPO over the HMO and FSA plans. I've btdt with those two and will never go back. Which brings me back to your first point. Yes, the healthcare aspect (especially in the US) is contextual.…

$2180 a month, $3000 deductible. Did your founders meet at a cancer remission support group? Or is it just that hard to negotiate for a small group policy where you are?

Re: How I negotiated my startup compensation (with numbers)

#146

Post by marcamillion » Tue, Aug 21, 2012, 11:55 PM UTC

I love this. Congrats Kyle, Michelle and the whole team for:

a) Going through these types of negotiations with your loved ones (not just close friends) and trying not to water it down - or give favors. There are many people, that I imagine, might want to get an extra few pts of equity just because you both are going to be married soon. So Kudos on keeping it professional.

b) Making this entire transaction as transparent as you did. I am shocked at all the details you guys laid out.

The only thing I would have loved to know is what Michelle was being hired to do.

Is she a developer, business development, graphics person, what?

Re: How I negotiated my startup compensation (with numbers)

#147

Post by refurb » Wed, Aug 22, 2012, 12:13 AM UTC

encoderer wrote: post #60

ChuckMcM wrote: post #19

Earlier quoted context omitted.

Did you miss the rent subsidy part? It was listed at $12K, so $1K/month. But lets step back from that for a moment. $70K gross income. Lets say you put $2K into an IRA (no 401k) so $68K after that. Estimated federal tax is $10,592 [1], Another 6.2% goes to Social security so $4,340 [2], estimated state income tax (CA) is about $3,922 so rolling that up, $68K - $18,854 in taxes thats not quite $50K left over ($49,146)…

While I agree with your sentiment about frugal living, in the spirit of being realitic, $500 a month for food is awfully low. At 3 meals a day, that's $5 a meal. No easy feat unless you go for processed, preserved and packaged, which is hardly a good way to live and eat.

Really? The girlfriend and I shop at Costco, eat very healthy meals and it runs us about $400-500/month for the both of us.

Back when I was poor I could eat pretty healthy for about $150/month.

Re: How I negotiated my startup compensation (with numbers)

#148

Post by btilly » Wed, Aug 22, 2012, 12:17 AM UTC

riazrizvi wrote: post #55

tptacek wrote: post #28

Earlier quoted context omitted.

Huh? Nobody offers .5% equity to an "office manager" or "QA". She says in the post her role is "Director". Michelle is an enterprise software consultant with an engineering background.

then, wow, she's getting screwed.

She's married to a co-founder.

If she thinks that she's increasing the odds of a successful exit, then below market compensation could be financially worthwhile for that reason alone.

Re: How I negotiated my startup compensation (with numbers)

#149

Post by temphn » Wed, Aug 22, 2012, 12:21 AM UTC

  Another thing that made this situation complicated was 
  that Kyle and I are recently engaged.

This is a cute article but for obvious reasons completely inapplicable to anyone else seeking a job at a startup.

Re: How I negotiated my startup compensation (with numbers)

#150

Post by harryh » Wed, Aug 22, 2012, 12:25 AM UTC

dkador wrote: post #80

bencpeters wrote: post #65

Earlier quoted context omitted.

In this case, numerous things in the article seem to imply that Keen was/is working out of the house, and that the author was living with the CEO (and possibly other founders?). Given that, it seems like the most straight-forward way this "rent subsidy" is working is that Keen is paying for the house where they live/work out of company money, and that's probably where the different category comes from, at least conce…

Disclosure: I'm one of the founders of Keen. With respect to the housing subsidy, you've got part of it right. We do work out of a big house that some of us live in. But the rent subsidy was put in place for one main reason: one of the main drivers of employee happiness is commute time. They're inversely related, and the rent subsidy is our way of incentivizing employees to live close to the office.

That's hella creepy.

What if I think I'll be happier living closer to friends or family and that happens to be far from your office? All of a sudden you're going to pay me less? Since when are you a better judge of what will make me happy than I am? Since when is that even your job?