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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?

#31

Post by tptacek »

_abattoir wrote: post #24
tptacek wrote: post #16

Yes, 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.

Critiques of Paul Graham and YC lose me the instant they suggest that they're rigging the system for venture capitalists. I've got friends in YC, I've worked closely with YC companies for years, I know several people at YC, and the evidence overwhelmingly suggests that their intentions are (a) good and (b) founder-aligned.

I'm pretty sure they're wrong about a couple things --- particularly the stuff that comes from some of the earlier PG essays. That's not the same as being corrupted. I'm wrong about a lot of stuff too.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#32

Post by tptacek »

angersock wrote: post #28
tptacek wrote: post #16

Yes, 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?

A little of both. I have yet to handle a liquidity event as well as he did, but I got insulated from that a bit because consultancies pay market salary and don't do equity compensation.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#34

Post by angersock »

tptacek wrote: post #32
angersock wrote: post #28

Earlier quoted context omitted.

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?

A little of both. I have yet to handle a liquidity event as well as he did, but I got insulated from that a bit because consultancies pay market salary and don't do equity compensation.

Sorry to dig, but I'm basically trying to figure out how a founder can properly reassure employees that they've planned for this sort of thing--also its converse, that an employee has a straightforward way of telling if they are being misled by their founder.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#36

Post by swah »

hodder wrote: post #3

Marco Arment appears to have done pretty well on the Tumblr aquisition. "As for me, while I wasn’t a “founder” financially, David was generous with my employee stock options back in the day. I won’t make yacht-and-helicopter money from the acquisition, and I won’t be switching to dedicated day and night iPhones. But as long as I manage investments properly and don’t spend recklessly, Tumblr has given my family a stro…

He also shared the numbers for his current project: http://www.marco.org/2015/01/15/overcast-sales-numbers

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#37

Post by nilkn »

A somewhat dual question, can anyone offer advice on what to look for when negotiating an offer with an early-stage startup with a view towards achieving an outcome in this range? What are some red-flags in an equity offer that suggest it won't be worth what it seems? What are some reasonable stipulations/demands to make as the employee, to protect yourself and your stake?

I've been told that there are so many loopholes that equity in the range of half a percent or so is mostly worthless after dilution and taxes. But it seems there are folks here saying they had equity in that range which was worth a lot.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#38

Post by swingbridge »

Worth pointing out that when people throw numbers around the stock value alone may sound impressive but that has to be compared against the opportunity cost that's usually associated with that route. Usually those options are handed out because the employee is accepting less cash or other compensation than another employer might pay then for similar work.

Walking away with $750k after 5 years might sound fantastic, but in some cases the person might actually be worse off relative to someone (say a senior role at an established firm) that had a package of higher salary, sizeable annual cash bonus and other perks often not found at startups. One needs to study the whole picture, not just some cash out amount at a liquidity event.

Re: Any stories of employees with equity successfully taking home over $1m? $500k?

#39

Post by tptacek »

angersock wrote: post #34
tptacek wrote: post #32

Earlier quoted context omitted.

A little of both. I have yet to handle a liquidity event as well as he did, but I got insulated from that a bit because consultancies pay market salary and don't do equity compensation.

Sorry to dig, but I'm basically trying to figure out how a founder can properly reassure employees that they've planned for this sort of thing--also its converse, that an employee has a straightforward way of telling if they are being misled by their founder.

It would be tough for me to distill it out, because he's also the best leader I've ever worked for. My two Matasano co-founders also worked with him, and one of our mottos was "WWxxD" (s/xx/his initials).

I think a lot of successful founders are successful once, and only plan on being successful once, and --- especially if it's their first company --- that changes the dynamics.

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