221–230 of 274 posts
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At least with the auto industry, the unions were able to offer some protections for the worker. How many programmers belong to a union?
Unions can't do anything about the company you're working for running out of resources. That's not what they are for.
I'm going to keep repeating this comment until the world hears it--I think most people joining startups are being taken advantage of without realizing it. Sorry to be repeating myself: If you're primarily interested in making money, or if you love the startup but not the compensation, you should NOT work at that startup. If you're a good developer, you can get a better deal by working at an established company and si…
If that's you, you're an idiot.
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> Tech employees need to wake up about common vs preferred shares, and that the former are worthless. > ... > They are worthless because they are designed, as a financial instrument, to be fake equity with no real protection from dilution and liquidation preference. You've muddled orthogonal concepts together here. 1. Common shares are not worthless. In general, just ask any founder who's had a successful exit. Found…
Thank you for the informative response. 1) Ok, Google/FB common shares were worth something. Those are extreme outliers in exits, and had ethical founders. But founders have another option if they drive the common share value to nothing - retention bonuses. They can say, ok we will make all the common shares worthless, but you can just give me a huge package as part of the aquisition. So employees can't rely on found…
Those people all made an entire career's worth of money, or more, all at once* and with capital gains tax treatment to boot. (* well, after an earnout / lockup)
They also exclusively held common shares.
The deciding factor is whether their exit value was a meaningful multiple of the invested capital. If you raise $100 M and sell for $100 M then it's hardly fair to expect a windfall. If you raise $50k and sell for $5 M it's very fair to expect a meaningful personal outcome.
I'm going to keep repeating this comment until the world hears it--I think most people joining startups are being taken advantage of without realizing it. Sorry to be repeating myself: If you're primarily interested in making money, or if you love the startup but not the compensation, you should NOT work at that startup. If you're a good developer, you can get a better deal by working at an established company and si…
> my current job pays about $250k, and one year, I invested $100k of that into a startup, leaving me with ~$150k of salary. Sorry to nitpick, but how exactly does the math work out if the $100k is presumably drawn from post-tax income?
So I think someone is pulling our leg.
I remember clearly when I was in a similar situation with the sale of a company I helped start in 1999. All this gain on paper which required (because of the Alternative Minimum Tax rule) that I pay taxes on gains I had not realized. And then later realizing an actual loss. And the decade afterwards of getting $3,000/year that I could claim against my taxes. The only reason I'm not still claiming my $3,000 a year is…
>Employees don't cash out some of their holding at $3/share expecting a bigger IPO lift. Both angry because nobody came from the future to tell them, hey this is the best offer you are ever going to get for this stock, take it. Quoting from the article: >Employees had little idea that an outside appraisal firm had valued Good at $434 million and the common stock at about 88 cents a share as of June 30, according to i…
If you're going to work at a startup, ask for two things: 1. No employee equity whatsoever, but a slightly higher salary to make up for it 2. The ability to invest in the the next round I've worked at a startup and done #1 and #2 above, and it's working out great. I'm very happy to be owning preferred shares.
Aren't you just lowering your risk, while simultaneously lowering your reward?
Eg, let's say you negotiate a 20k/year increase by not getting any stock options. If you spend that 20k to invest in their next round, you'll be paying for preferred shares, rather than common shares. Therefore, you'll be able to afford about 5x less shares than if you were exercising employee grants. Am I wrong?
Sure, you'll get preferred shares, but if the company does very well, your ultimate reward will be less.
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> Tech employees need to wake up about common vs preferred shares, and that the former are worthless. > ... > They are worthless because they are designed, as a financial instrument, to be fake equity with no real protection from dilution and liquidation preference. You've muddled orthogonal concepts together here. 1. Common shares are not worthless. In general, just ask any founder who's had a successful exit. Found…
That all makes sense, but potential startup employees still need to be educated about the reality that common shares are much less likely to be worth much than preferred shares. Specifically, if a startup asks a potential employee to take a below-market salary with an option package -- which happens all the time -- the potential employee is best advised to value the option package at zero. The real reason, if there i…
if that.
of course this is HN so that's entirely reasonable because founding a company is a massive risk but being employee number 5 at a company that might go under in 3 months is fine.
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>Employees don't cash out some of their holding at $3/share expecting a bigger IPO lift. Both angry because nobody came from the future to tell them, hey this is the best offer you are ever going to get for this stock, take it. Quoting from the article: >Employees had little idea that an outside appraisal firm had valued Good at $434 million and the common stock at about 88 cents a share as of June 30, according to i…
I'm not arguing, but I would like to point out that you've just fallen into the same trap I was discussing. According to the article the employees had a chance to sell shares at $3 a share, later it came out that an outside firm felt the shares were worth less. The trap is using information from later to beat yourself up about what you didn't do then. It is an easy trap to fall into, you're in your own future looking…
According to the article: -June 30: outside firm values common stock at $0.88 -'Late July': Board knows they only have 30-60 days of cash -'August': Some employees buy common stock at $3.34/share
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> How many programmers belong to a union? Thankfully none. One of the main reasons the car companies stumbled are unions. The whole thing has degenerated to insanity squared. For example, GM had a clause in their contract requiring them to not fire employees displaced by technology or automation. In other words, if you improve your workflow and process and can do the same work with 25 people instead of 100, you can't…
You earn a union. You earn a union by not treating your employees well, if you knew the history of the labor movement in the 30's you'd better understand how things got to be the way they are, and why the relationship is adversarial, instead of cooperative. If your employees are trying to unionize its because of longstanding grievances held by a significant minority if not majority of your workforce - grievances that…
News flash: We are nearly one hundred years away from the 30's. Just because things made sense then (and they absolutely did) does not mean they make sense today.
What I am putting on the table is a verifiable mathematical fact. No opinions here. Fire-up Excel and do the math. Not sustainable. And that's the point. I didn't say unions need to evaporate, I said they need to mutate into something that truly works for a sustainable common goal. Today, for the most part, they do not. And we all pay for it in one way or another.
Earlier quoted context omitted.
> How many programmers belong to a union? Thankfully none. One of the main reasons the car companies stumbled are unions. The whole thing has degenerated to insanity squared. For example, GM had a clause in their contract requiring them to not fire employees displaced by technology or automation. In other words, if you improve your workflow and process and can do the same work with 25 people instead of 100, you can't…
I'm fairly sure that most car company employees in Germany are represented by a union, the IG Metall. Germany's car industry is still doing fine.