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The article says "Equity will be your largest driver of compensation at a startup." as the rationalization of why it focuses on that.
Based on my past experiences, I would say that the learning, network, and reputational effects resulted in far more wealth to me over the medium-term than any incremental change in equity or salary.
It would be helpful to explain how an early employee (whether still employed or separated from the company) is able to obtain the following documentation from their company to demonstrate QSBS treatment to the IRS (or if a letter indicating such from a finance department or the CFO would suffice): > Even though reporting QSBS is simple, you should still keep financial statements and other supporting documents to supp…
This is a good point. A lot of founders seem to want to protect or hide this information. Usually that's a red flag for me, but it's common. I think it needs to me more normalized and formalized.
Earlier quoted context omitted.
I think the main advantage of working at a startup is when you're relatively young and inexperienced - you're being compensated in the experience and accelerated job titles that you can then leverage to ramp up your career by joining other companies or starting your own. Getting an exit is a cherry on top.
In my experience, getting a FAANG job accelerates your career as well or better than titling up quickly in a startup. Having a FANG position on your resume is more of a known quantity for future potential employers than being promoted quickly in an unknown startup.
I have an offer that vests over 6 years with a 1.5 year cliff. Is that normal? I'm used to 4 years 1 year cliff, but the CEO said that 1.5/6 are common for companies that "want employees who care about the long term"
I have an offer that vests over 6 years with a 1.5 year cliff. Is that normal? I'm used to 4 years 1 year cliff, but the CEO said that 1.5/6 are common for companies that "want employees who care about the long term"
Refresher grants could also motivate employees to stick around for the long term!
I have an offer that vests over 6 years with a 1.5 year cliff. Is that normal? I'm used to 4 years 1 year cliff, but the CEO said that 1.5/6 are common for companies that "want employees who care about the long term"
Earlier quoted context omitted.
This is a good 'best-case' example that anyone could hope for, and like you say - you probably need to be one of first few engineering hires to have a shot at this type of outcome.
Yea I think this is a top 0.1% survivorship bias. Hitting 2 startup lotteries in a row at that kind of exit. Kudos.
Chatted with some early-stage-then-IPO-ed engineers yesterday, I asked "aren't your company IPO-ed and you should have retired?", the answer is, after multiple dilutions in rounds of fund raises, his options ended up worth just a few thousands, not useful at all. There is no way the startup you have been working for will keep your interest a priority, and you never know if your share will reach zero in the process of…
It would be interesting to see some analysis comparing pre-IPO offers versus standard FAANG-style engineering offers and see what the monetary difference actually is. In the not-so-distant past, start ups were pretty much the only avenue to secure a multiple-million dollar personal liquidity event, in the off chance you join a successful start up, work your tail off, and the company gets to a point where that exit ha…
My equity grants as a non-eng (but involved in prod dev) have ranged from 0.05% to 0.6% over the course of 10 years in startups (age 25-35). All Series A to Series B. My take is that unless you are very good at judging leadership teams and company prospects, that joining a FAANG or a Series C+ scale-up (and even that takes thoughtful research and luck) is the better play. Early stage at my past grant levels has to hi…