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Silicon Valley's best kept secret: Founder liquidity

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Re: Silicon Valley's best kept secret: Founder liquidity

#331

Post by surfingdino »

segfaltnh wrote: post #232
surfingdino wrote: post #139

This and my own experience with employee stock options led me to reject any work for startups that offer stock options. It is a way to make you work hard and allow to be treated like dirt for less money. The lowest point was having to walk across town to the office to eat energy bars from the office kitchenette, because I could not afford a bus fare or food as my pay was delayed by a week over Christmas. Meanwhile, t…

I don't believe a private sale entitles one to ignore a stock options legal rights. What are the relevant details here I'm missing?

It was 10+ years ago. I don't have the details, but the riches they were underpaid for never came true. The founder made out like a bandit.

Re: Silicon Valley's best kept secret: Founder liquidity

#332

Post by rk06 »

doodda wrote: post #247

This post has managed to piss off everyone: employees who didn't realize founders were getting liquidity events while they're still sitting on their more-often-than-not valueless equity, and founders who feel they've earned it and don't like the implication they haven't.

Yeah, this one lives up to headline!

Re: Silicon Valley's best kept secret: Founder liquidity

#333

Post by danw1979 »

> Investors and founders both tend to think that if employees knew founders were getting liquidity that that would negatively impact employee morale (it wouldn’t)

It would. Knowing that founders are cashing out and I’m not able to would be a very good reason to walk away, in my rather old, maybe slightly cynical opinion.

I get the need to hedge your bets, but employees should be able to that too.

Re: Silicon Valley's best kept secret: Founder liquidity

#335

Post by [deleted] »

inhumantsar wrote: post #105
jmward01 wrote: post #68

I was mentally, physically and emotionally worn out when I left my previous startup after being an early employee. Despite that I really wanted to stay and be part of what my friends and I were building. Had I had the chance to 'de-risk my life' with some equity to replenish my empty bank account, which was empty from taking an early employee salary, I may have been able to stay but in the end I had to get out. Getti…

the lottery ticket analogy doesn't quite hit the mark imho. I've been seeing really shitty vesting schedules more often these days. a year in an early stage startup is often more intense than years in larger companies, yet they feel the need to push vesting schedules like 5/15/30/50 on people. even if you do stick it out and exercise those options and eat the tax burden, those shares can still be ignored in an acquis…

[deleted]

Re: Silicon Valley's best kept secret: Founder liquidity

#336

Post by newshackr »

keeptrying wrote: post #47
parentheses wrote: post #29

Earlier quoted context omitted.

This assumes how much of the founders' shares they sell and the size of the raise. The $400k figure is just arbitrary here. I imagine when companies are raising Series B or later, founders are walking away with millions.

$1-$2M after 6 years of working at $100k isn’t really much either in the Bay. (Which is the only place you’d get that.) Even that averages to a senior Eng salary for the very very few founders who get there. This has to be tempered by other realities - no social life - working 80 hours a week easily - risking personal finances - health problems - good chance of divorce / no deep relationships Starting a company is no…

That may be true, but it is also true of early employees who stick it out for similar amounts of time and get nothing. $1-2 million may be the total amount they would get after a billion dollar exit.

Re: Silicon Valley's best kept secret: Founder liquidity

#337

Post by yard2010 »

throwaway98797 wrote: post #288
sneak wrote: post #187

Earlier quoted context omitted.

Where would the stress come from? You get a paycheck and there is no personal downside except opportunity cost (and perhaps reputation). You don’t lose any money if your startup fails.

cause if you fail you have to let people go cause if you fail you have to tell your investors you lost money cause if you fail is a thought that’s always running through your head as you live it

This is not a real risk you're talking about, but small inconveniences. A risk is losing your house for example, or losing the ability to rent.

Inconveniences are part of life anyway. Being the first engineer means you get all these inconveniences (tell your wife and your kids) plus real risks as above (taking a loan to buy the options and losing it)

Re: Silicon Valley's best kept secret: Founder liquidity

#338

Post by [deleted] »

gafferongames wrote: post #302
palata wrote: post #295

Earlier quoted context omitted.

> I think the OP should work on his company for more than 4 months and have more than 10 employees for at least a year to truly understand what it is to be a founder. Have you been an employee in a startup? Because in my experience it has a lot of the downs of the founder, but none of the ups.

So start your own company then.

[deleted]

Re: Silicon Valley's best kept secret: Founder liquidity

#339

Post by [deleted] »

throrway12 wrote: post #129

I worked at a preseed company recently. Here's my experience: - Work 9 to 7 everyday. 6 days a week. - People are working 9 am - 5 am in crunch time. Then joining again at 10 am. - Monetary Comp is exactly market average. - Equity Comp is even more paltry since founders raised at a huge valuation. - Founders make unrealistic promises. Eg: It took a competitor with 7 people, 3 months to make a product. The founder tol…

[deleted]

Re: Silicon Valley's best kept secret: Founder liquidity

#340

Post by palata »

gafferongames wrote: post #302
palata wrote: post #295

Earlier quoted context omitted.

> I think the OP should work on his company for more than 4 months and have more than 10 employees for at least a year to truly understand what it is to be a founder. Have you been an employee in a startup? Because in my experience it has a lot of the downs of the founder, but none of the ups.

So start your own company then.

Maybe I should, so that I could abuse from the employees and then explain how I deserve to get rich if MY startup succeeds but my employees don't (because it is MY startup, you see? I don't need them).
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