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Benefits matter, or why I won't work for your Y Combinator startup

mhalligan.com

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Re: Benefits matter, or why I won't work for your Y Combinator startup

#251

Post by rdl »

r00fus wrote: post #249
rdl wrote: post #118

I don't think benefits are the main reason to work anywhere -- doing meaningful work and working with great people far exceeds financial benefit, and salary/bonus/equity should dominate fringe benefits. However, why do benefits packages need to be uniform? I personally hate having "benefits" in my compensation which come out of my salary which I don't really want. Sometimes companies get tax savings (i.e. they can de…

FSA got gimped in the past year or so - you can't use it to expense non-prescription items. Where are you getting your better coverage than at a company? I heard group coverage was insanely difficult to get outside the umbrella of a large risk pool (ie, corporate)... Most of the times benefits offered are optional - I've never been forced into any benefit at my company. Also the cost for benefits are usually better f…

I'm pretty healthy and single, so when I priced my personal $3500 deductible HSA (+$3500/yr into the HSA, which is like a Roth) vs. any group plans I've found, I ended up with much better coverage and pricing. I think the issue is we have people in multiple states, so it was hard to get good group coverage.

I forgot about FSA reductions (which were already pretty bad when you have both an HSA and FSA). I probably don't have anything useful to spend FSA money on.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#252

Post by amit_m »

crusso wrote: post #83
edent wrote: post #23

From a UK perspective - this post is nuts! I've worked with a few London based startups (and interviewed for several). Holiday 28 days minimum - as per law https://www.gov.uk/holiday-entitlement-rights/entitlement Rarely offered health care but - for all its flaws - our National Health Service is pretty good. Shares - yup, they're almost always going to be worthless. Pension - every company has offered me at least 5%…

I do wonder why the UK scene doesn't seem quite so vibrant You just go through a list of state-required benefits or drains on individual risk taking and then you wonder at why the startup scene isn't quite so vibrant? Risk taking requires the ability to... uh... take risks.

AFAIK Israel has more startups per capita than any other country in the world, but the legally mandated benefits are very similar to those in the UK (with slightly less vacation time).

Actually, I think some form of social safety net is supportive of very entrepreneurs. From personal experience, the only people I know who quit their job to work full time on a startup had significant savings from previous jobs. Also it's quite common in Israel to start working on your startup while getting unemployment benefits.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#253

Post by mikeash »

guptaneil wrote: post #175
pg wrote: post #133

This entire thesis is a red herring. I doubt we've ever had a conversation with a startup about what sort of benefits they should offer. Since the startups in a position to hire lots of people will presumably have raised money from later stage investors, if anyone is giving them advice about this, it would probably be them. FWIW, if anyone did ask my advice about what benefits to offer, I'd tell them to err on the si…

I'd argue that being less generous with benefits is a good filter for hiring candidates that are genuinely interested in what the startup's doing (which is crucial in early employees) rather than somebody who's just looking for another job, like the author. Edit: To clarify, there is huge difference between offering no benefits and offering fewer benefits than a large company. I'm not advocating treating employees li…

Why concentrate on benefits. Being less generous with everything is a good filter for hiring candidates that are genuinely interested in what the startup's doing! Pay your employees poorly, and you're guaranteed to only get the ones who really believe in your company. You're virtually guaranteed success, right?

Re: Benefits matter, or why I won't work for your Y Combinator startup

#254

Post by etchalon »

coolsunglasses wrote: post #248
etchalon wrote: post #237

Earlier quoted context omitted.

A long time for a 24 year old, yes.

How long did you contract for before you quit and decided it was somehow easier to found your own company?

On and off for the better part of a decade.

And let me be clear, "founding my own company" wasn't "easier". It was infinitely harder, though ultimately more rewarding for me.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#255

Post by james_alonso »

twakefield wrote: post #127

"That $375k would then be subject to 63% taxes, netting me $138,750, or a 20% down-payment on my piece of the american dream. The other company does the right thing, so I only see a 15% capital gains tax" A bit of an aside but could someone elaborate on this? Is the OP referring to an 83(b) election? If so, isn't that his responsibility (of course, the company should advise him to do this). Or is this referring to so…

He's talking about early-exercise stock options vs instalment exercise stock options. Early-exercise let's you exercise the shares from day 1, before they're vested. It starts the clock running on long-term capital gains treatment, so you're more likely to qualify for that lower rate than if you exercise later.

You do have to pay for the shares out of pocket though so it's a risky move - could end up having paid cash for worthless shares, especially in an early stage company.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#256

Post by walshemj »

nilkn wrote: post #243
walshemj wrote: post #231

Earlier quoted context omitted.

yep same in the uk the average GP (family doctor) makes $180k which is far higher than the Average engineer makes.

I don't know what the debt is like in the UK, but a doctor in the US can expect to go into upwards of $200k of debt. The average engineer will have far less (or no) debt and will only need a BA/BS.

no I meant a chartered engineer with several years experience and a senior role earns far less than a GP does.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#257

Post by bearmf »

michaelochurch wrote: post #226
guptaneil wrote: post #175

Earlier quoted context omitted.

I'd argue that being less generous with benefits is a good filter for hiring candidates that are genuinely interested in what the startup's doing (which is crucial in early employees) rather than somebody who's just looking for another job, like the author. Edit: To clarify, there is huge difference between offering no benefits and offering fewer benefits than a large company. I'm not advocating treating employees li…

Health insurance is non-negotiable and shouldn't have an employee contribution. The rest of the benefits are more negotiable. 401k becomes important in your 30s when you start realizing that you're not going to be young forever. Conference budget is a nice-to-have but conferences shouldn't come out of your vacation-- that's a fuck-you if they do. Regarding compensation: the total package should be enough that people…

Lost of large companies have employee contributions. No-premium health insurance is not a standard benefit outside of a few technology companies.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#258

Post by bearmf »

swilk wrote: post #45
nilkn wrote: post #26

Earlier quoted context omitted.

It's his tone which comes off as entitled to me. Very, very entitled. He sounds like one cocky dude to me. Let's all take a moment to reflect on a few things. For instance, we are pretty lucky to be passionate about something which just happens to be pretty good at producing a lot of monetary value for companies, and consequently it's not too hard for us to convince companies to pay us a lot and give us great benefit…

All my finance friends make about 10x what my engineer friends make and work equally hard. If you compare engineers to lawyers, doctors, and executives we are very much underpaid.

Hmm do all your finance friends around $1mil per year? This is huge even for finance.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#259

Post by danielweber »

seeingfurther wrote: post #212
khuey wrote: post #173

Earlier quoted context omitted.

Are they going to have anti-dilution protection?

Nobody gets anti-dilution protection. Including founders.

By saying "including founders" you make it seem so fair. After all, if there is any benefit, founders should get it, right?

But, founders obviously cannot have anti-dilution prevention. When a company is founded, by definition the founders have 100% of it, and the only way they can raise money is by diluting.

If two founders and three VC reps are sitting around the board table discussing the next round of funding, if there is heavy dilution it will often include stock grants to all the people sitting around the table to reduce their pain. An employee doesn't have a seat sitting around that table, so he is more likely to be pinched by dilution that the founders or the VCs.

Re: Benefits matter, or why I won't work for your Y Combinator startup

#260

Post by kragen »

llimllib wrote: post #136
cletus wrote: post #117

The problem here I think is the disparity between being the last cofounder (15-30% equity before dilution typically) and being the first employee (1-2%) vs working for a more established company. If you compare the compensation for being an early employee in such a startup with working for an established company (eg Google, Facebook) then I think you'll find the employee of the latter will be better off in the long t…

> working for an established company will give you a far better expected financial outcome at lower risk. Tiny, tiny nit: that final phrase is redundant. Calculating an expected financial outcome includes the risk. Agree with everything you're saying.

It's not redundant. It's true that you use risk in calculating an expected financial outcome, but that doesn't mean that a better expected financial outcome has lower risk. You can have a better expected financial outcome at higher risk, in which case it may be a worse option if you have lower risk tolerance, despite the better expected financial outcome!
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