At Booming Toptal, No Stock for Employees or Investors • Hacker News Board

Re: At Booming Toptal, No Stock for Employees or Investors

#181

Post by jfim » Sat, Aug 17, 2019, 2:57 PM UTC

goatinaboat wrote: post #180

StriverGuy wrote: post #42

Earlier quoted context omitted.

Certain business models require high amounts of capital in order to create leverage/growth. Think of Uber, WeWork etc. All the founders made out fabulously rich due to the ability to leverage growth on the back of VC money. Organically growing, profitable business may never need to take outside money. It really comes down to the market and growth strategy.

Certain business models require high amounts of capital in order to create leverage/growth. Think of Uber, WeWork etc The business model of selling $1 for 50c and hoping that later you’ll be able to sell it for $2 because... reasons.

That model works if there are economies of scale.

Say that your one dollar cost at one million users is $0.80 fixed costs and $0.20 incremental cost. Adding more users will eventually make the model profitable, and this is how Facebook works, for example.

Re: At Booming Toptal, No Stock for Employees or Investors

#182

Post by ThrowawayR2 » Sat, Aug 17, 2019, 4:42 PM UTC

lbatx wrote: post #178

mygo wrote: post #121

Earlier quoted context omitted.

Is being paid well not good enough? Companies tend to give out stock as part of a package in lieu of all cash. If you have all you want in cold hard cash, what’s the problem?

>Is being paid well not good enough? I would say no. Since the employees are one of the keys to the success of the company, why should they not share in the additional profits above and beyond what is planned for the year? >Companies tend to give out stock as part of a package in lieu of all cash. Some do. In my experience, it's been about 50/50. Startups obviously tend to lean more toward equity and lower cash, whil…

> Since the employees are one of the keys to the success of the company, why should they not share in the additional profits above and beyond what is planned for the year?

That's a pretty peculiar viewpoint. If you went to a restaurant, ordered and paid for a burger, received your order with a bite taken out of it, and the cook said "Well, I worked really hard to make the hamburger that you ordered and it turned out extra well. That means I deserve a bite." when you complained, would you find that reasonable?

(It's not even entirely hypothetical: https://www.npr.org/2019/07/30/746600105/1-in-4-food-deliver... )

Re: At Booming Toptal, No Stock for Employees or Investors

#183

Post by jedberg » Sat, Aug 17, 2019, 4:47 PM UTC

readams wrote: post #161

jedberg wrote: post #91

Earlier quoted context omitted.

That's not exactly how it works. They give you a total comp number, and then you choose the cash/equity ratio yourself, which you can change each year. A lot of people chose the all cash option because they didn't understand there equity option, so they changed it to give everyone a little bit of equity regardless, but you can still opt to get extra equity in lieu of cash, and change that election every year. I think…

Netflix stocks are totally insane, as you're not really getting stock but instead a complex leveraged financial instrument in the form of an call option, that you have to pay for based on a Netflix estimate of the option premium.

Yep that’s why they switched it to giving everyone some equity. But those of us who understood the financial instrument being offered dis really well for ourselves.

Re: At Booming Toptal, No Stock for Employees or Investors

#184

Post by lbatx » Sat, Aug 17, 2019, 5:56 PM UTC

ThrowawayR2 wrote: post #182

lbatx wrote: post #178

Earlier quoted context omitted.

>Is being paid well not good enough? I would say no. Since the employees are one of the keys to the success of the company, why should they not share in the additional profits above and beyond what is planned for the year? >Companies tend to give out stock as part of a package in lieu of all cash. Some do. In my experience, it's been about 50/50. Startups obviously tend to lean more toward equity and lower cash, whil…

> Since the employees are one of the keys to the success of the company, why should they not share in the additional profits above and beyond what is planned for the year? That's a pretty peculiar viewpoint. If you went to a restaurant, ordered and paid for a burger, received your order with a bite taken out of it, and the cook said " Well, I worked really hard to make the hamburger that you ordered and it turned out…

Your analogy falls apart. Re-read what I wrote: "share in the additional profits above and beyond". Let's say we expect to make $1MM for the year. We need to keep a reserve to pay people when we are between contracts, rent, taxes, SAAS, etc. I then work out I can pay 5 people $100K each (this is an example, not actual). If we then make $1.2MM per year (for any number of reasons) how is it peculiar that the employees should share in the extra $200K? That's nothing like your analogy.

Re: At Booming Toptal, No Stock for Employees or Investors

#185

Post by lbatx » Sat, Aug 17, 2019, 5:59 PM UTC

andrewstuart wrote: post #132

lbatx wrote: post #86

Well, if you want any further insight into the CEO, check out Toptal's investment page: https://www.toptal.com/investors . He minces no words and comes off quite aggressively. Very much a "my way or the highway" tone to that page. They seem sort of like StackOverflow or Basecamp from a bootstrap perspective, without the warm fuzzy feeling you get from interacting with either of those companies.

It's pretty cool that's there's any company at all able to make such bold assertions.

There are actually plenty, most of them have the same rules, they just don't say it that way. In other words, they are tactful.

I'd say any of the bootstrapped software companies hold those philosophies (they don't need the investment, so they can set the terms).

Re: At Booming Toptal, No Stock for Employees or Investors

#186

Post by kordlessagain » Sat, Aug 17, 2019, 7:32 PM UTC

throaway5983 wrote: post #142

tschwimmer wrote: post #12

A lot of Sillicon Valley startup fundraising ends up resembling an iterated prisoner's dilemma. Most startups fail and it's likely that you might have to work with people a few times before you get it right. The [generally] dominant strategy for Iterated Prisoner's dilemma is tit for tat[0], and consequently you see a lot of people cooperating when when it might be more lucrative to defect is because they know that t…

You're assuming that this was a rational, conscious decision on his part. I've had some dealings with him that would lead me to conclude that this is just his personal inclination. He threatened me & my company over a wholly imagined transgression (and ceased completely when our attorney asked for documentation). Believe me or not, the main point is that working backwards from behavior to the thought process that led…

People who defend the "rights" of internal personal imagery over that of reality can get stuffed, in my book. If you didn't do the imagined deed, then it never happened.

Re: At Booming Toptal, No Stock for Employees or Investors

#187

Post by sidlls » Sat, Aug 17, 2019, 9:35 PM UTC

aianus wrote: post #128

sidlls wrote: post #76

Earlier quoted context omitted.

When I was doing it they claimed that $65 per hour was a "good" rate for the Bay Area, and constantly pressured me to lower my rate to that. There were a few clients with names anyone here would recognize, but they were looking on Toptal specifically to get cheap labor for poorly specified work. Most of the clients were more like the stereotypical E-lance "small business" (read: one-person operation looking for cheap…

> $65 per hour was a "good" rate for the Bay Area I'm confused, I thought Toptal workers were remote. Why would your location factor into the rate a client is willing to pay? FWIW I charged even less than that as a remote contractor and it goes really, really far in countries like Vietnam or Thailand.

My location wasn't the issue: I meant that Toptal was insisting companies located in the Bay Area would not want to pay more than about $65/hr (plus Toptal's surcharge). It was laughable, considering I was at that very moment working full-time at a company with a base salary with an hourly rate equivalent that was more than $65/hr, plus I got bonus, stock, and perks/benefits.

As far as I was concerned, Toptal wanted contractors who'd bill like the were competing with E-lancers for business, while Toptal was marketing them as "top talent. "You get what you pay for," and while you (for example) might be an exception, "top talent" isn't going to charge bargain-bin prices for their labor.

Re: At Booming Toptal, No Stock for Employees or Investors

#188

Post by aianus » Sun, Aug 18, 2019, 3:12 AM UTC

sidlls wrote: post #187

aianus wrote: post #128

Earlier quoted context omitted.

> $65 per hour was a "good" rate for the Bay Area I'm confused, I thought Toptal workers were remote. Why would your location factor into the rate a client is willing to pay? FWIW I charged even less than that as a remote contractor and it goes really, really far in countries like Vietnam or Thailand.

My location wasn't the issue: I meant that Toptal was insisting companies located in the Bay Area would not want to pay more than about $65/hr (plus Toptal's surcharge). It was laughable, considering I was at that very moment working full-time at a company with a base salary with an hourly rate equivalent that was more than $65/hr, plus I got bonus, stock, and perks/benefits. As far as I was concerned, Toptal wanted…

> "top talent" isn't going to charge bargain-bin prices for their labor

Purchasing power differences in the world are insane: $65/h in Vietnam can represent a much more luxurious life than $200/h in San Francisco.

In fact, the global top 1% starts at US$35k/year!

At $65/h ($130k/year) you'd be able to buy a home outright in about a year, send your kids to snooty private schools, hire a maid and a private driver, etc. in a large part of the world.

Re: At Booming Toptal, No Stock for Employees or Investors

#189

Post by walshemj » Sun, Aug 18, 2019, 2:50 PM UTC

tigershark wrote: post #136

walshemj wrote: post #31

Earlier quoted context omitted.

I would expect to get stock if I joined a FTSE 100 company, if not most of the FTSE 350 as well.

Why? I worked in some FTSE100 and Fortune 50 in UK and you just get salary. But you can usually buy stocks at a discount.

Share Save schemes are very tax advantaged and zero risk share options in the UK

I have made tens of thousands and made e made over 100,000 effectively tax free.

I think you missed out there

Re: At Booming Toptal, No Stock for Employees or Investors

#190

Post by Tehchops » Sun, Aug 18, 2019, 8:29 PM UTC

robocat wrote: post #156

Tehchops wrote: post #150

Earlier quoted context omitted.

Do you really want to burn a bridge with a16z/AH in the tech industry? They may say "well played" in so many words, in public. Privately? They may be marshaling their bottomless war chest to unmake you.

He openly states he has no trouble with interest from investors: https://www.toptal.com/investors And I can't see why his existing investors wouldn't be interested - although they would perhaps take more care with the terms. His ethics don't seem to be weird, compared against stories about some other founders. I can't see why you make predictions about how he should act or how VCs would act (what's your expertise?)

If read/listen to MA or BH at any length, they heavily emphasize the value of relationships and a network.

This behavior seems absolutely anathema to their stated ideals.