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Windsurf employee #2: I was given a payout of only 1% what my shares where worth

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Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#191

Post by mikert89 »

dilyevsky wrote: post #164
mgfist wrote: post #136

Earlier quoted context omitted.

There's other gotchas too. Ratchets, liquidation preferences, restructurings (recapitalizations) etc etc There's many opportunities for VCs and founders to screw you over. And that's assuming things go well enough for that to be an option lol

My 2c is these are almost always a consequence of the company not being a good business. Well, sometimes you get asshole founders/board members too that's not as common as the company just being an absolute money pit. So instead, I'd focus on asking about business fundamentals/strategy - if the company is money printer, everyone is likely going to do well financially

nope, it happens in "good businesses". once real money is on the line, everything is a dog fight. no one talks publicly because of the reputational repurcussions

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#192

Post by fusslo »

stan_kirdey wrote: post #75

Engineers: always negotiate for higher base salaries. In the vast majority of cases—especially during acquihires—your equity will be worth little or nothing. Founders and VCs still get paid; employees rarely do. Don't just accept promises. Ask for the 409A valuation, liquidation preferences, and pay bands. If a company won’t provide transparency, that’s your signal. Equity is a lottery ticket. Salary is money in the…

my equity from 2years pre-acquisition: ~$2800. Then the CEO gave out bonuses when everyone threatened to quit. Then after his 3 month vacation to Italy, he came back driving his new Ferrari.

My equity from 4 years ( employee ~60, grew to over 500 ): worthless. No one is able to exercise any options. They also readjusted when the valuation came below the total raised, making the value of my vested shares ~$13k ( down from ~$200,000 ) . They 'made us whole' by giving more shares with a new 4 year vesting schedule.

Startups have found ways to fuck everyone but the investors with equity. It's confederate dollars; funny money. Maybe some people get great deals, I don't know. From my limited experience at very successful startups, the only people who made real money were those able to parley huge bonuses or base salaries.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#193

Post by mawadev »

pembrook wrote: post #190
mawadev wrote: post #71

I'm waking up personally to the unethical side of Software development as well. You can either do little and get paid pocket change or you can provide a ton of value for pocket change next to some promises lulling you in, where the value of your work exponentially increases, but you will see nothing of it and whatever you do: you are still a replaceable cell in excel to them and there will be ways where you get dragg…

Okay, but how much do you think you deserve as an employee who has invested none of your money in the company and decided to join on a 6-figure salary only after the company is already through YC, is funded by top investors and looks attractive? If you’re instantly replaceable by any dime-a-dozen engineer than can install packages on npm and use react components and add a thumbs up to slack messages…to not get accide…

Thank you for your comment, it proves my point!

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#194

Post by debatem1 »

01HNNWZ0MV43FF wrote: post #120
gsibble wrote: post #93

Earlier quoted context omitted.

I tell every engineer always to maximize their cash comp and every founder and investor always says "No, that's such a bad idea! Get more equity!" Yeah, because that is in your interests, not the engineer's.

I remember when my old employer was doing another round of funding They offered to sell me more shares I countered that I'd been trying to dump the shares they already gave me and if the shares are truly worth X dollars they should buy them back from me Anyway glad I quit

> if the shares are truly worth X dollars they should buy them back from me

I always offer companies pushing equity hard to trade for cash at 10% of the highest number they try to get me to value it at. Nobody has ever taken me up on it, even when they really should have.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#195

Post by shutupnerd0000 »

azinman2 wrote: post #187
para_parolu wrote: post #180

Earlier quoted context omitted.

$25k/yr can be decent living in some places.

In no place where you’re getting a 1M pretax offer.

Yeah but what if - hear me out - you move after you get the money?

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#196

Post by lvl155 »

kentonv wrote: post #99
KaiserPro wrote: post #60

I was aquihired by a FAANG. The headline "startup bought for x million" is almost always a lie, either direct or by omission. First, when a startup is bought, its generally not bought at the headline rate. So if you see a "bought for $45m" that doesn't mean People who own shares all got a % of 45m. That number is normally bullshit, but also a "total package" which include share offers for joining the new company. Thi…

Yeah, I used to hear all the time that "a startup is worth $1 million per engineer in a pure acquihire", but learned the hard way this is a myth. When we were talking to various companies about acquiring Sandstorm.io (my startup) in 2017, one of the companies told me, essentially: "We aren't interested in your IP, only the employees. We'll give you a set of job offers for them. We will then sum up the salary and equi…

So many bitter aholes in this business.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#197

Post by dehrmann »

fusslo wrote: post #192
stan_kirdey wrote: post #75

Engineers: always negotiate for higher base salaries. In the vast majority of cases—especially during acquihires—your equity will be worth little or nothing. Founders and VCs still get paid; employees rarely do. Don't just accept promises. Ask for the 409A valuation, liquidation preferences, and pay bands. If a company won’t provide transparency, that’s your signal. Equity is a lottery ticket. Salary is money in the…

my equity from 2years pre-acquisition: ~$2800. Then the CEO gave out bonuses when everyone threatened to quit. Then after his 3 month vacation to Italy, he came back driving his new Ferrari. My equity from 4 years ( employee ~60, grew to over 500 ): worthless. No one is able to exercise any options. They also readjusted when the valuation came below the total raised, making the value of my vested shares ~$13k ( down…

At some point, aren't the C Suite and directors failing their fiduciary responsibility? I know they have broad freedoms, but when you're reducing an a minority shareholder's equity by 95%, it's well past "fiduciary responsibility" and looking like fraud.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#198

Post by achierius »

doctorpangloss wrote: post #153
ww520 wrote: post #150

That’s why founding engineers are such a raw deal. They take just as much risk as the founders but much less payout. Also on the hook to do most of the work.

It's complicated. The difference between a founder and founding engineer - I think you mean early employee - is pretty big. The fact that they are getting a "raw deal" in your POV should inform you that the equity grants are not related to risk. This is coming from someone who programs for a living: contrary to what you are saying, the money guys take too little equity. The money guy being, the reason you are raising…

No. The engineers build the product. They do the actual work. Let's flip your 'reason' around: the engineers are the reason the VCs have a job at all, since the entire point of the job is to find people building big things and funding them to get a cut. They are secondary, the actual product -- and the people who build it -- are what matters, morally and economically.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#199

Post by mikert89 »

doctorpangloss wrote: post #153
ww520 wrote: post #150

That’s why founding engineers are such a raw deal. They take just as much risk as the founders but much less payout. Also on the hook to do most of the work.

It's complicated. The difference between a founder and founding engineer - I think you mean early employee - is pretty big. The fact that they are getting a "raw deal" in your POV should inform you that the equity grants are not related to risk. This is coming from someone who programs for a living: contrary to what you are saying, the money guys take too little equity. The money guy being, the reason you are raising…

actually the big scam is the difference is not big at all, alot of times founding engineers do more work than the CEO. a startup that raises 1-3 million alot of times doesnt even have revenue. sometimes its just that the founder went to stanford, hires engineers, gives them lottery tickets, and hopes they produce good work

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#200

Post by tyre »

djoldman wrote: post #138
stan_kirdey wrote: post #75

Engineers: always negotiate for higher base salaries. In the vast majority of cases—especially during acquihires—your equity will be worth little or nothing. Founders and VCs still get paid; employees rarely do. Don't just accept promises. Ask for the 409A valuation, liquidation preferences, and pay bands. If a company won’t provide transparency, that’s your signal. Equity is a lottery ticket. Salary is money in the…

Indeed. Likewise with non-guaranteed bonuses (gotta love the "plus a discretionary bonus!" commentary during offer discussions). It's always worth offering to take equity as long as they agree in writing to not ever dilute your shares and vest them immediately. However, it's unlikely that any company will agree. It's best to imagine compensation as exactly one's salary. Then (virtually) all surprises are good.

> It's always worth offering to take equity as long as they agree in writing to not ever dilute your shares and vest them immediately. However, it's unlikely that any company will agree.

Well, yes, because that’s insane.

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