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Windsurf employee #2: I was given a payout of only 1% what my shares where worth

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Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#401

Post by ivape »

fusslo wrote: post #192
stan_kirdey wrote: post #75

Engineers: always negotiate for higher base salaries. In the vast majority of cases—especially during acquihires—your equity will be worth little or nothing. Founders and VCs still get paid; employees rarely do. Don't just accept promises. Ask for the 409A valuation, liquidation preferences, and pay bands. If a company won’t provide transparency, that’s your signal. Equity is a lottery ticket. Salary is money in the…

my equity from 2years pre-acquisition: ~$2800. Then the CEO gave out bonuses when everyone threatened to quit. Then after his 3 month vacation to Italy, he came back driving his new Ferrari. My equity from 4 years ( employee ~60, grew to over 500 ): worthless. No one is able to exercise any options. They also readjusted when the valuation came below the total raised, making the value of my vested shares ~$13k ( down…

Then after his 3 month vacation to Italy, he came back driving his new Ferrari.

Hey, at least he’s taking his LARPing as a douchebag ceo seriously. Easy vip invite for DND nights.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#402

Post by bravesoul2 »

nimos wrote: post #273
kstrauser wrote: post #254

Earlier quoted context omitted.

Or you could spend half that in the heart of SF and have a nice place in a decent neighborhood: https://www.zillow.com/homedetails/1265-Union-St-San-Francis... It's not that it's cheap here, not by any measure, but it's not nearly so dire as y'all want to claim.

That is a tenancy in common 2 bedroom apartment not a house. Shared ownership of a 100+ year old building with "leased" parking 2 blocks away. Not exactly the home ownership dream.

Luckily you can live in a city and then later sell that appartment and buy another house in the sticks that is the dream.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#403

Post by fragmede »

jjice wrote: post #296
stan_kirdey wrote: post #75

Engineers: always negotiate for higher base salaries. In the vast majority of cases—especially during acquihires—your equity will be worth little or nothing. Founders and VCs still get paid; employees rarely do. Don't just accept promises. Ask for the 409A valuation, liquidation preferences, and pay bands. If a company won’t provide transparency, that’s your signal. Equity is a lottery ticket. Salary is money in the…

I had some RSUs from a previous company (likely will not be worth anything) and some options at another, but I have no idea how to understand how dilution like this works. My understanding is surface level of that scene in The Social Network. I feel like I understand _what_ an RSU is and what options are, but are there any good resources for me to learn from?

Dilution is where things get fucky.

So you're working at this startup. Lets say it's worth $10 million. To make things simple, in this company, there are 2 people, the fucker, the CEO, the guy that started it all. He holds 90,000 RSUs, each worth $100, so $9 million, and the fuckee, you, who holds 10,000 RSUs, each worth $100, for a cool million.

Here's where the fucker fucks the fuckee, ie you. The company does a round, and then creates, out of thin air, a billion shares (1,000,000,000), and issues them to the new investors. Lets say the company reached unicorn status this round, which is to say a valuation of a billion.

Holy hell a billion! But wait now there's 1,000,100,000 total shares out there, and the valuation of a billion, divided by the new shares, means that each share, of which you only have 10,000 of, is now worth just under one dollar.

That's right, your $1 million just turned into $10,000. Which isn't nothing, I'd love to come across a random $10k I didn't know I had. But that's just, like, one really nice vacation for you and the kids, which you haven't seen enough of because you've been working so hard at this startup, and not, like, a college fund for the kid that's showing aptitude at engineering and that you were hoping was gonna go to MIT.

Dilution is inevitable, there's no avoiding it. The scenario I presented is just to show you an example of how dilution fucks you. If things go well, would you rather have 10% of $1 million or 0.1% of $1 billion?

For more, it depends on how you like your information. ChatGPT's got stuff like ISOs vs NSOs pretty well covered, Investopedia's got a lot of good stuff if you'd rather it that way.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#404

Post by ponector »

fermentation wrote: post #208
fusslo wrote: post #192

Earlier quoted context omitted.

my equity from 2years pre-acquisition: ~$2800. Then the CEO gave out bonuses when everyone threatened to quit. Then after his 3 month vacation to Italy, he came back driving his new Ferrari. My equity from 4 years ( employee ~60, grew to over 500 ): worthless. No one is able to exercise any options. They also readjusted when the valuation came below the total raised, making the value of my vested shares ~$13k ( down…

I often see job postings here looking for "top <1% engineer talent" paying $100k and <1% equity and I wonder who is actually applying.

No one will say: we are looking for cheap mediocre talent with no intention to grow, just to process assigned Jira tickets. Even if that is the actual truth in many cases.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#405

Post by bravesoul2 »

pembrook wrote: post #190
mawadev wrote: post #71

I'm waking up personally to the unethical side of Software development as well. You can either do little and get paid pocket change or you can provide a ton of value for pocket change next to some promises lulling you in, where the value of your work exponentially increases, but you will see nothing of it and whatever you do: you are still a replaceable cell in excel to them and there will be ways where you get dragg…

Okay, but how much do you think you deserve as an employee who has invested none of your money in the company and decided to join on a 6-figure salary only after the company is already through YC, is funded by top investors and looks attractive? If you’re instantly replaceable by any dime-a-dozen engineer than can install packages on npm and use react components and add a thumbs up to slack messages…to not get accide…

Take the moralising out it.

If I join a lottery syndicate and it wins 100m but I only put in 1% of the syndicate amount say $100 do I not deserve $1m because I'm just a "whatever I am just"???

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#406

Post by sailingparrot »

lemax wrote: post #56

This is a fair cautionary tale but it's worth understanding the specifics of the situation – Windsurf maintained a relatively easy to replicate product with no moat, and employed a bunch of attractive talent. The company got gutted of these employees and lost its valuation because no suitable buyer thought their IP was exceptionally valuable on its own. Just because this was the outcome for Windsurf does not mean the…

I don’t understand why the specifics of the situation matters here. We know the company got acquihired for $2.4B, the problem is, why did all of it go to investors and founders and nothing for employees?

I’m not sure customer churn rate has any impact on liquidation preference.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#407

Post by wiz21c »

AceJohnny2 wrote: post #371
Thorrez wrote: post #344

Earlier quoted context omitted.

Here's a $2M 4-3 2279sqft very-nice-looking home in Santa Barbara: https://www.zillow.com/homedetails/5436-Agana-Dr-Santa-Barba...

offtopic, but I love comparing realtor glamour shots HDR'd out the wazoo with StreetView https://maps.app.goo.gl/2aEXsdH9hU3o4SZw5 (winter, March 2012)

so much space lost to cars...

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#408

Post by cpursley »

chasebank wrote: post #281
kstrauser wrote: post #225

Earlier quoted context omitted.

What kind of house had you been dreaming of? I live in SF, and even here $3M goes an awfully freaking long way.

I'm in Santa Barbara, CA. Good friend of mine just bought a shithole 3-2 1300sqft for $2.2m. $3M doesn't go very far considering 30 years ago it was retirement status almost anywhere.

I don’t get it, at this point you move to Baja or Portugal (for similar climate) and live like a king without ever having to work again (unless you want to). Or a cheaper east coast state if you wanna stay in the US on the coast and have access to to all the same fast food and Walmarts.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#409

Post by MadDemon »

_zoltan_ wrote: post #247
kstrauser wrote: post #225

Earlier quoted context omitted.

What kind of house had you been dreaming of? I live in SF, and even here $3M goes an awfully freaking long way.

for a standalone house in my area (lakeside near Zurich, Switzerland) you'd pay way more than 3M... apartments go for 2+.

Intrest rates for morgages in Switzerland are around 1% and for tax reasons most people only pay off a third of their property. The payments are very managable, as long as you have the downpayment. You can't fully compare this with a similar price in the US where interest rates are much higher and people pay off the full morgage.

Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth

#410

Post by coffeebeqn »

johann8384 wrote: post #285
kstrauser wrote: post #254

Earlier quoted context omitted.

Or you could spend half that in the heart of SF and have a nice place in a decent neighborhood: https://www.zillow.com/homedetails/1265-Union-St-San-Francis... It's not that it's cheap here, not by any measure, but it's not nearly so dire as y'all want to claim.

With $3MM you could just stop working and live in many other nice enough places without ever having to work again.

Buying a $3M house does not mean they have $3M cash
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