yes - I was part of a recent acquisition and made a little over 4M (pretax). I had 0.1% of the company. I was 24th employee (engineer). The company had 55 people at the time of acquisition. I joined about 14 months before the acquisition.
Any stories of employees with equity successfully taking home over $1m? $500k?
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Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#22The average engineer who joined square about 3 years ago has made more than 2M
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#23Honestly I haven't seen anyone in this industry get any significant money, outside of investors and owners, since the dotcom days. Back then I knew quite a few programmers that made a killing and still have money today from that era. Large money comes from ownership and the inherent risk. No one will ever give you enough money to go away completely as an employee. Can you make a little scratch? Of course. This indust…
Could you point me to some decent reading on the subject? I've asked around a bit but it's not really something that people like to talk about.
Perhaps not exactly what you are looking for, but a very good read on the subject is "Venture Deals" (http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...).
If you want to know exactly what rights your shares have (and don't have), this is the book.
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#24Yes, my first startup job got me into the high end of that range, as employee #5, with a relatively small acquisition. I know several people who took home much more from employee roles (albeit in larger acquisitions) in the recent past. A lot of it has to do with who you work with. In every case I can think of, windfall money for employees came from founders with a track record of accomplishing that (or, in my case,…
Right, PG's advice is not useful for all founders, just the 1 out of every 10 that makes it big. The others are supposed to nut up and get over it.
His advice does, however, benefit every venture capitalist.
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#25yes - I was part of a recent acquisition and made a little over 4M (pretax). I had 0.1% of the company. I was 24th employee (engineer). The company had 55 people at the time of acquisition. I joined about 14 months before the acquisition.
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Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#26Well in January of '95 I sold 1000 shares of Sun Stock that I had accumulated over the employee purchase program the previous few years. Sure it was only $35,000, this allowed me to purchase a car for cash rather than get a loan on it. When I sold the car in '99 to a used car dealer I realized the same 1000 shares, 4 years later were worth $1.6M.
Granted at 1995 it wasn't a start-up any more, but it is an easy counter illustration to the myth that "only founders make money." Granted, half or 3 of the 6 managers I had at Sun are actually quite well off with two being VC partners these days and one enjoying their post work life.
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#27I always go for salary first, equity second. So far, after half a dozen start-ups, I haven't regretted that strategy.
Not faulting your decision making process, but have you kept track of the startups you declined offers from? I would be curious if that paradigm changes in 10 years, not that I will remember to ask you :D
In the one case of a successful exit, I was able to pull off enough of a salary bump that it more than compensated for what I could have gotten with equity. There may end up being one that proves me wrong, but overall, I think equity has generally been used as an excuse to push down salary.
I also have a family and they eat today, so my appetite for risk has been lower. At 22, my decisions might have been different.
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#28Yes, my first startup job got me into the high end of that range, as employee #5, with a relatively small acquisition. I know several people who took home much more from employee roles (albeit in larger acquisitions) in the recent past. A lot of it has to do with who you work with. In every case I can think of, windfall money for employees came from founders with a track record of accomplishing that (or, in my case,…
So, did that founder make clear exactly how you were going to be taken care of, or was it something you had to take on faith, or was it a surprise altogether?
How'd you handle this sort of thing at Matasano?
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#29I worked at Palantir from 2009 to 2014 (started as SysEng, pivoted to Infosec). I have only "taken home" enough to recoup the cost of exercising my options and paying taxes (ugh, AMT), but my stock is worth something in that range. A friend who started around the same time I did recently sold a little less than half of his stock for about $500k to a private equity fund. I also know of a few other non-executives who started before me who have cashed out over $500k.
EDIT: If anyone's curious about selling pre-IPO stock, I have an email address in my profile and would be happy to share some knowledge. Seems like there's not much out in the open about it.
Re: Any stories of employees with equity successfully taking home over $1m? $500k?
#30Honestly I haven't seen anyone in this industry get any significant money, outside of investors and owners, since the dotcom days. Back then I knew quite a few programmers that made a killing and still have money today from that era. Large money comes from ownership and the inherent risk. No one will ever give you enough money to go away completely as an employee. Can you make a little scratch? Of course. This indust…
This is a side effect of companies filling coffers via investors instead of via customers. If you're part of a high growth company with reasonable earnings, that sales multiple means you'll likely get a taste of the action. If you're in a high growth VC funded company with no revenue, then that multiple goes to the VC and maybe one or two people they might like to work with again. You can restate this via all sorts o…
Indeed. If the company is a "real business" with actual customers and real profitable finances then those shares can be worth something.
If it's all a bunch of VC backed fluff, well then good luck. At that point it's just a game of selling these virtual units to others wheeling and dealing in similar pumped up virtual fluff. There are lots of ways the 'options' holders get diluted and made irrelevant and are in effect just pawns that can be made to work for less cash based on the, mostly, pipe dream that these options will be worth something some day. One needs to be very careful if you're in this bucket.