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Understanding Startup Offers

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Re: Understanding Startup Offers

#71

Post by mattnewton »

hinkley wrote: post #42
fatnoah wrote: post #33

Earlier quoted context omitted.

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 sinc…

I learned long ago that the most successful tech company I know is probably not the one I work for. Also that layoffs tend to follow drops in the stock price. I don’t buy shares on margin, so why would I want my nest egg invested in the company I work for? If I get laid off I’m poor twice over.

That's a great argument for working somewhere where the equity is liquid IMO. You can just sell public company RSU's as they vest and put them wherever else to diversify.

Re: Understanding Startup Offers

#72

Post by pram »

joshuamorton wrote: post #50
nostrademons wrote: post #44

Earlier quoted context omitted.

Google in general has pretty good work/life balance. I think the challenge is that you're responsible for launching on a feature team at Google, and the lead up to a launch has a ton of work that needs to be done often under tight deadline pressure, plus the codebase is crazy complex. If you're a self-motivated, detail-oriented, slightly obsessive individual of the type Google loves to hire, you're not going to rest…

This, I've basically never felt external pressure from management or deadlines in my job. I have however, on more than one occasion, found myself up far too late (or in the pre-pandemic times having nearly missed the last bus home) because I just want to figure out what is causing this damn bug . It could wait until tomorrow, no one would care if I waited until tomorrow, there is no pressure for me to fix it today. B…

Yeah same. Once I’m on a certain train of thought I can’t stop. Those are the days where I have 5am commits because I never went to bed lol

No one is demanding I do that though. They’d probably think I’m crazy tbh

Re: Understanding Startup Offers

#73

Post by jollybean »

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…

It's nary impossible to judge founders, even investors are not very good.

I think that 'heat' is probably the best way to judge: if they are growing, they have a good product, customers like it, and they're not paying substantially more for customer acquisition - and it's a large market - then that's a good sign.

Re: Understanding Startup Offers

#74

Post by jollybean »

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.

This is worth something.

I worked at a blue chip and we hired young devs with 2 years experience at major banks and they were clueless. I don't think they actually did anything. Worse, they didn't realize that they didn't know how to do anything. It was bizarre.

That said, it makes it hard to work in a normal corp, you have to find a special place to work where at least the pace is 'just right' i.e. you get to actually do thing, but they're not going to push you into the ground with too much work and stress.

Re: Understanding Startup Offers

#75

Post by zuhayeer »

entangledqubit wrote: post #69

The questions included here are good to see. For a more complete guide, my preferred document these days is the Holloway Guide ( https://www.holloway.com/g/equity-compensation ). Though now I have to add a warning that there's a slightly annoying attempt to get your contact info and it has gotten rather long...

This excerpt is particularly pretty nice to get a sense for equity ranges: https://www.holloway.com/g/equity-compensation/sections/typi...

Re: Understanding Startup Offers

#76

Post by chenmike »

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.

That’s a reasonable assessment. I worked at startups for 3 years before joining a FAANG company and they flat-out ignored my startup experience for leveling purposes, placing me as a junior engineer.

Re: Understanding Startup Offers

#77

Post by [deleted] »

ganoushoreilly wrote: post #20
toomuchtodo wrote: post #4

It would be helpful to explain how an early employee (whether still employed or separated from the company) is able to obtain the following documentation from their company to demonstrate QSBS treatment to the IRS (or if a letter indicating such from a finance department or the CFO would suffice): > Even though reporting QSBS is simple, you should still keep financial statements and other supporting documents to supp…

This is a good point. A lot of founders seem to want to protect or hide this information. Usually that's a red flag for me, but it's common. I think it needs to me more normalized and formalized.

[deleted]

Re: Understanding Startup Offers

#78

Post by Dwolb »

nostrademons wrote: post #67
dasil003 wrote: post #65

Earlier quoted context omitted.

Considering the vast swathes of 1.5M homes across the Bay Area that were <$100k in the mid-70s, you didn't need to be anywhere near a millionaire to making a killing in real estate if you've been here 50 years.

That's very true in dollar terms, but wealth is owning 4 homes, or a couple apartment blocks, or being able to retire at 40, right? That's what most people are seeking. And if folks were able to achieve that in the 80s from being extremely-impactful ICs at big companies, maybe big companies were paying select employees more than the general public was aware?

Silicon Valley companies were paying salary and equity and were growing really fast.

Employee’s vested shares turned out to be worth a lot and so was the real estate employees bought.

The market was ripe and the people were talented. Not so sure there’s much to it then that.

Re: Understanding Startup Offers

#79

Post by Dwolb »

preseedthrwwy wrote: post #8
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…

throwaway for obvious reasons.. I joined a seed company w/ a $10m valuation in early 2014, starting offer was 1%. after series a, b, c, and some smaller retention grants, I had about 0.4%. Left before fully vesting, so ended up with 0.3%. Company was acquired for $4b and I made $12m. After taxes, netted about $7.5m Joined another seed company with $10m valuation in 2016, starting offer was 3%. after a few dilutive fu…

Thanks for sharing your counter-example.

Do you think you significantly affected company trajectory in these two cases or not? Can play around with the definition of “significantly here”.

Re: Understanding Startup Offers

#80

Post by siruncledrew »

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…

IMO you have be lucky in both cases to really strike it rich.

Choosing a startup with this kind of potential is insanely hard to do, and if you get lucky then the explosive growth of immediately becoming wealthy is what redeems it. But the key is choosing the needle in the haystack. It's harder than being an investor. An investor can make 100 bets hoping one works out, but an employee is only deciding on 1 place.

Working at a FAANGM company is a safer chance at hoping to climb the corporate ladder and reach a cushiony role through steady work over time. Essentially someone is hoping to ride a steady incline up from $150k to $300k+. Granted it's not the exciting casino-like feeling that a startup exit provides.

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