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Understanding Startup Offers

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Re: Understanding Startup Offers

#31

Post by freewilly1040 »

clpm4j wrote: post #16
synergy20 wrote: post #11

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…

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.

I don't think people at established companies care about gaudy job titles at startups. Being a director at some chaotic mess of a company (and much of the time that is what startups are) doesn't signal competence.

The opposite can be true, when IC's at startups who have not truly learned their craft jump to management too early.

Re: Understanding Startup Offers

#32

Post by freewilly1040 »

mcgingras wrote: post #23

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"

4 year vest, 1 year cliff is the standard, and even that is going away at some places.

An employer who wants to keep you will demonstrate that by compensating you well and giving you an opportunity to augment your skills.

This offerer sounds like someone who has experienced turnover problems and has decided that it's everyone else's fault.

Re: Understanding Startup Offers

#33

Post by fatnoah »

quokkafriend wrote: post #12
qqtt wrote: post #3

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…

I spent the better part of 17 years at startups, with grants ranging from 0.2% all the way to 1% (VP Eng in a Series C+). The latter exited, but options were worth $0 due to liquidation preferences. I did get a cash bonus equal to about 2x my salary, so that was nice...it was also about the same as the sum of my last two stock vests (i.e. 6 months) at the FAANG I'm currently at, and whose stock price has doubled since I joined. I currently make 4X what I made at the height of my startup career.

Unless I'm coming in hot with good equity and an imminent IPO OR I don't need/want the money at all, I can't see going to back to startup life. (I also wouldn't trade that startup experience away, either)

Re: Understanding Startup Offers

#34

Post by freewilly1040 »

enra wrote: post #7
qqtt wrote: post #6

Earlier quoted context omitted.

With things like dilution mattering and stock options being popular vehicles for early stage start up it would be really interesting and elucidating to have practical examples to compare against. It's easy to understand a FAANG style offer in this context. You join Google in 2017, you get RSUs pegged at 800$ a share valuation, about 150k$ a year vesting, by 2021 those shares are worth 2800$ so you've earned about 2.1…

Yeah I wish YC or someone could provide some anonymized data on this across companies. And it's true that out of all startups, only probably 1% make it big. But the markets are growing fast and just this year there has been ~200 IPO which I think mostly are $1B+. From a tax perspective, RSU are probably worst. They are taxed on your W-2, effectively a bonus. If you make a lot, you pay max bracket federally and in you…

I think YC has not put out information like this because the data would show joining a startup as a regular employee is not remotely worth it vs publicly traded companies.

Re: Understanding Startup Offers

#35

Post by dhd415 »

glassconclusion wrote: post #24
dhd415 wrote: post #17

Earlier quoted context omitted.

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'm working for an unknown startup and I feel like I will placed in a pool of entry level candidates if I decide to join a big corp.

I would expect that your startup experience would place you well among a pool of entry-level candidates once you made it past the resume screening stage. Where the FANG position is going to help you is in getting past that stage. Fairly or unfairly, having a FANG position on your resume is kinda' like having a degree from an elite university in that recruiters will view your resume more favorably.

Re: Understanding Startup Offers

#36

Post by mcgingras »

devnulll wrote: post #27
mcgingras wrote: post #23

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"

No, I don't believe that's normal. That sounds like a CEO trying to take advantage of the labor force.

Thanks everyone, that's what I was thinking as well, but I'm fairly new to startups so I wasn't sure.

Re: Understanding Startup Offers

#37

Post by jdavis703 »

qqtt wrote: post #3

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…

I don’t know about Facebook, but my friends at Google seem to have terrible work life balance. Seems like they only get a breather when they’re between projects.

Re: Understanding Startup Offers

#39

Post by hinkley »

quokkafriend wrote: post #12
qqtt wrote: post #3

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…

Maybe it’s like people using their tax refund as a savings strategy. If you’re good with your money then fixing your withholding and increasing your savings rate nets you more money in the long term. But you have to have self control to save the money instead of just fighting temptation once a year.

Re: Understanding Startup Offers

#40

Post by [deleted] »

freewilly1040 wrote: post #34
enra wrote: post #7

Earlier quoted context omitted.

Yeah I wish YC or someone could provide some anonymized data on this across companies. And it's true that out of all startups, only probably 1% make it big. But the markets are growing fast and just this year there has been ~200 IPO which I think mostly are $1B+. From a tax perspective, RSU are probably worst. They are taxed on your W-2, effectively a bonus. If you make a lot, you pay max bracket federally and in you…

I think YC has not put out information like this because the data would show joining a startup as a regular employee is not remotely worth it vs publicly traded companies.

[deleted]
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