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How to Not Get Screwed over as a Software Engineer [video]

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Re: How to Not Get Screwed over as a Software Engineer [video]

#191

Post by nytesky »

mushufasa wrote: post #42
satvikpendem wrote: post #9

One of the top comments on the YouTube video attached to the article talks about how someone wasted their 20s working as the founding engineer (employee #6 of a 6-person startup) and when the company exited for $100 MM, they only got 100k and are still working at 40 years of age while the other 5, presumably having cofounder-level equity, are retired. This is the true risk of startups, and, if you're looking to maxim…

While it's hard to comment on a specific situation, in my experience engineers are typically more interested in cash compensation rather than equity, even with less than 10 employees. And this is when offering them the option; they just choose the cash most of the time. Meanwhile, the founding team often is just paying themselves stipends for rent. So there's some classic risk tolerance here: if the company fails (wh…

From digging around, I suspect there is a starting base phenomenon for that risk tolerance.

For example I was watching a documentary and got curious about theglobe founders — one was the son of Valley business type and the other was the grandson of the founder of Nestle.

Many engineers come from more pedestrian roots, and need money to make rent if the company folds, while the founders can accept “stipend” money because they have cash flow guarantees (probably estate tax avoidant annual gifts) and possible even jobs from family connections.

Re: How to Not Get Screwed over as a Software Engineer [video]

#192

Post by satvikpendem »

deely3 wrote: post #160
paxys wrote: post #147

I have seen so many of their examples happen first hand in the industry. - Lead engineer works 100 hour weeks to keep the company running for a below-market salary and 0.05% equity while the founders and product/sales leads constantly sell shares on the secondary market, buy fancy toys and travel the world. - Technical cofounder gets a 3% equity because the "business guy" came up with the idea and deserves the other…

I don't know.. should car driver, or cleaner, or repair man get the same equity as founders or top managers? Does work as software developer really different from maintenance and repair guy that (sadly) easy replacable?

You get what you negotiate. That's why actors and writers have been getting royalties and residuals on their works for decades now. Only now with the rise of streaming platforms and AI content generation are they being forced to accept weaker terms.

Re: How to Not Get Screwed over as a Software Engineer [video]

#193

Post by saliagato »

eweise wrote: post #149
satvikpendem wrote: post #9

One of the top comments on the YouTube video attached to the article talks about how someone wasted their 20s working as the founding engineer (employee #6 of a 6-person startup) and when the company exited for $100 MM, they only got 100k and are still working at 40 years of age while the other 5, presumably having cofounder-level equity, are retired. This is the true risk of startups, and, if you're looking to maxim…

Been working at startups on and off for over 20 years. In total I've spent more money on stock options than I've made from them.

Care to elaborate?

Re: How to Not Get Screwed over as a Software Engineer [video]

#194

Post by satvikpendem »

alexawarrior2 wrote: post #172
_yf4k wrote: post #91

After having worked at four startups, including two as CTO, I have zero remaining equity or financial upside from any of the startup equity. This is the bitter take away, your equity will most likely amount to nothing unless the company is on a clear path to IPO/ acquisition or a promise of share buy back during the time you're at the company. This is a higher bar than simple profitability. The reason you work at a s…

Amen brother/sister. Was founder, co-founder, early employee, or investor in eleven startups, ten of which went out of business or were bought with no net equity earnings for myself, one of them had a $250m exit from which I netted $130k, after seven years. It's not that retirement-level-net-earnings startups never happen, just that they happen only about 1 out of every 1000 times on average according to my research.…

> only capitalists - the existing 1% - have an odds-on shot at startup success

By the VC definition of "startup," which is not universal. This is why I advocate for bootstrapping on the side until the revenue exceeds your salary. Pieter Levels famously did so and many others are also generating $10k or $20k+ MRR and living well. They can always sell that cashflowing asset for a 5x multiple and enter the HNWI territory, or they can simply keep the company on the backburner while they do other stuff.

Re: How to Not Get Screwed over as a Software Engineer [video]

#195

Post by golergka »

satvikpendem wrote: post #9

One of the top comments on the YouTube video attached to the article talks about how someone wasted their 20s working as the founding engineer (employee #6 of a 6-person startup) and when the company exited for $100 MM, they only got 100k and are still working at 40 years of age while the other 5, presumably having cofounder-level equity, are retired. This is the true risk of startups, and, if you're looking to maxim…

For a full picture, how much cash did he get and how much tc was he worth at other, more established companies at the time?

Re: How to Not Get Screwed over as a Software Engineer [video]

#196

Post by satvikpendem »

AlexErrant wrote: post #118
purpleblue wrote: post #69

It's funny that YC is posting this video, because as far as I can tell, YC teaches its founders to keep most of the equity for themselves, and dole out as little equity as possible to their employees. Back during the dotcom days, most employees, from secretaries to engineers, got extremely rich from options when the company IPOed. These days, in order to make a life-changing amount of money at a YC startup as an empl…

> At YC, we tell our founders to be generous with equity, and even suggest giving 10% to the first 10 employees. https://www.ycombinator.com/blog/filter-by-equity-at-yc-star... .

0.5% - 1% each is also what I've seen, but sadly that is really not enough, especially after rounds of dilution. See my top comment about "founding engineers": https://news.ycombinator.com/item?id=38116759

Re: How to Not Get Screwed over as a Software Engineer [video]

#197

Post by satvikpendem »

golergka wrote: post #195
satvikpendem wrote: post #9

One of the top comments on the YouTube video attached to the article talks about how someone wasted their 20s working as the founding engineer (employee #6 of a 6-person startup) and when the company exited for $100 MM, they only got 100k and are still working at 40 years of age while the other 5, presumably having cofounder-level equity, are retired. This is the true risk of startups, and, if you're looking to maxim…

For a full picture, how much cash did he get and how much tc was he worth at other, more established companies at the time?

They didn't say, you could ask them on the YouTube comment, but it is likely that their TC was below market compensation, by the way they stated their story; if they were really satisfied with their TC, it's likely they wouldn't have made such a comment.

Re: How to Not Get Screwed over as a Software Engineer [video]

#198

Post by VirusNewbie »

ditonal wrote: post #177
pc86 wrote: post #141

Earlier quoted context omitted.

Serious question: if you're truly being paid a market-rate salary -- e.g. roughly as much as you could make at any other VC-funded enterprise, any FAANG company, etc, not the same $110k/yr you'd make at a bank or consulting firm -- why would you get any equity? The whole point of equity is that you have skin in the game and "work harder" (whatever that means) to make the company a success. At least in the early days…

Because FAANG pays equity too. Google will pay a senior engineer 200k base and 250k in liquid stock a year for 450k TC. That stock is also incredibly low risk. If a startup paying market means 450k cash, absolutely there’s no need for equity. But if it means matching the 200k base then obviously you’re screwed with no equity. And I’m theory it should be a lot of equity given the much higher risk premium.

According to levels.FYI, Google average for senior engineer is closer to 360k. But your point still stands.

You are getting equity either way, both are likely to appreciate, but one is likely to be more liquid. So you're trading liquidity for a higher return.

Re: How to Not Get Screwed over as a Software Engineer [video]

#199

Post by deely3 »

satvikpendem wrote: post #192
deely3 wrote: post #160

Earlier quoted context omitted.

I don't know.. should car driver, or cleaner, or repair man get the same equity as founders or top managers? Does work as software developer really different from maintenance and repair guy that (sadly) easy replacable?

You get what you negotiate. That's why actors and writers have been getting royalties and residuals on their works for decades now. Only now with the rise of streaming platforms and AI content generation are they being forced to accept weaker terms.

Sure. Do you agree that software developers become modern repairman?

Re: How to Not Get Screwed over as a Software Engineer [video]

#200

Post by bowenjin »

ldjkfkdsjnv wrote: post #3

How to get rich in tech as a mediocre programmer: 1. Transfer to a TPM/QA Manager role at somewhere like Amazon or Microsoft. Bar is much lower to get into this role. 2. Get hired into a higher level than you could in a SWE role. 3. Transfer within the company to being an SDM 4. Now you are one level higher, in a management role, that would have taken you 5+ years of grinding and some luck to get into. 5. Spend a few…

Great guide. I've seen this career path played out many times on Linkedin.
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