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Can you make “big money” as an employee in software?

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Re: Can you make “big money” as an employee in software?

#41
If you want to make "big money," you should pretty much avoid WORKING at startups at all costs. Instead, get a high-paying job at an established company, and invest the difference in the startup's equity.

I've considered lots of startup jobs because I believed strongly in the companies. Every single time, however, I was able to get a larger chunk of the company by keeping my current job and simply investing.

To give an example, my current job pays about $250k, and one year, I invested $100k of that into a startup, leaving me with ~$150k of salary. This $150k + startup equity was a better deal than the startup was offering in both salary and equity. Plus, equity bought as an investor is much less tax toxic than equity options received as an employee of a startup.

On the other hand, most people who work at startups aren't interested in money. If that's you, that's totally cool, and I respect that!

Re: Can you make “big money” as an employee in software?

#43
post #7

Yes, in a few ways I am familiar with: (1) Finance. They make so much "free" money that they can afford to just pay massive salaries and not blink. You just have to be okay with doing things that basically add no value to anything. (2) As a very early employee in a hugely successful startup. But this is roulette, since most startups fail and some only succeed after so much dilution that your share ends up tiny. (3) W…

(2) As a very early employee in a hugely successful startup. But this is roulette, since most startups fail and some only succeed after so much dilution that your share ends up tiny. This is a very poor way of describing the risk / upside of joining a startup. In the aggregate, the odds of any randomly selected startup may present odds similar to roulette, but practically, you have the ability to choose who you work…

Roulette players also have the ability to be selective. You just put your money on the number/color that is going to be successful, and then you have much better odds than someone who didn't put money on the one that will be successful.

Re: Can you make “big money” as an employee in software?

#44

Earlier quoted context omitted.

(2) As a very early employee in a hugely successful startup. But this is roulette, since most startups fail and some only succeed after so much dilution that your share ends up tiny. This is a very poor way of describing the risk / upside of joining a startup. In the aggregate, the odds of any randomly selected startup may present odds similar to roulette, but practically, you have the ability to choose who you work…

Roulette players also have the ability to be selective. You just put your money on the number/color that is going to be successful, and then you have much better odds than someone who didn't put money on the one that will be successful.

'The number/color that is going to be successful'

In roulette, there is no competitive advantage between specific numbers or colors. In startups, that is not the case.

Re: Can you make “big money” as an employee in software?

#46

If you want to make "big money," you should pretty much avoid WORKING at startups at all costs. Instead, get a high-paying job at an established company, and invest the difference in the startup's equity. I've considered lots of startup jobs because I believed strongly in the companies. Every single time, however, I was able to get a larger chunk of the company by keeping my current job and simply investing. To give…

This may be a really stupid question, but how do you cash out your investments in these startups? Do you have to wait for them to get bought out or can you sell your stake in the company to other investors?

Re: Can you make “big money” as an employee in software?

#48

If you want to make "big money," you should pretty much avoid WORKING at startups at all costs. Instead, get a high-paying job at an established company, and invest the difference in the startup's equity. I've considered lots of startup jobs because I believed strongly in the companies. Every single time, however, I was able to get a larger chunk of the company by keeping my current job and simply investing. To give…

Can I ask you what is you current job?, the one that pays you $250k per year.

Re: Can you make “big money” as an employee in software?

#49
post #16

I have a term I call "win at money". You've won at money when you have enough capital to live comfortably for the rest of your life just on the interest from low-risk investment. Can you win at money in software? Yes, but pretty much only by founding your own company or being among the first handful of employees at a startup that gets huge. On the other hand, you can make a comfortable middle-class living at software…

> live comfortably for the rest of your life just on the interest from low-risk investment.

50-100k/yr is a comfortable life in most places. That's 1.2-2.5 million in capital. Definitely don't have to start a company of be in a start-up for that at all.

Re: Can you make “big money” as an employee in software?

#50
post #16

I have a term I call "win at money". You've won at money when you have enough capital to live comfortably for the rest of your life just on the interest from low-risk investment. Can you win at money in software? Yes, but pretty much only by founding your own company or being among the first handful of employees at a startup that gets huge. On the other hand, you can make a comfortable middle-class living at software…

I think this is a good point. It's also worth noting that there are pretty much no careers where you can just get a normal job and end up "winning at money". Finance is a possible exception, but it comes with its own tradeoffs and the biggest players generally leave their finance jobs to start their own funds.

Right. The system is designed so you'll finally save enough to "win at money" about the time you're too old to work effectively anymore.

What kills me is seeing friends whose jobs involve hard physical labor. They can't save enough to win at money before their bodies start giving out from the abuse. In better economies with unions and cultural support, they just sort of loaf away their less productive, later years. In America, they get laid off and can't work anymore.

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