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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

#761

Post by panopticon »

mgfist wrote: post #683
lurking_swe wrote: post #635

Earlier quoted context omitted.

Yes that’s accidental gambling. Or what i like to call “at the right place at the right time”. Ask a Yahoo employee how that same plan would have worked out for them. That being said, good for you. :)

Mostly agreed, but as an employee you do have some semblance of material non-public information that gives you a structural edge in assessing the stock. (This probably works better at a 1k-5k company than a Google/FB, but I can't say because I haven't worked at the big faangs). I've benefited financially from having a good sense of how well things are going and holding/selling accordingly (within the confines of the…

> non-public information that gives you a structural edge in assessing the stock

This can also cut the other direction too. I had a slightly negative sentiment about Google during my tenure there due to the organization I was in. When earnings call season rolled around it didn't matter since the ads revenue line always dominated everything else.

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

#762

Post by pedalpete »

I'd be very careful with a 20% option pool and a 3 month cliff.

My assumption is this means the founder is providing double the equity, meaning that at 3 months the potential of not insignificant amounts of equity can be walking out the door.

We've had the experience where we had a contractor who we thought was a good fit. We decided to hire them as an employee, and back-date the cliff to when they started. We had a very big somewhat bet the company deadline which their work was key to, and this deadline was about 3 weeks past the cliff date. They walked 2 weeks before, and didn't deliver. Literally waiting until they could claim some equity.

Of course, this is what bad leaver clauses are for, but there is a reason why some of the terms exist.

I agree with the long exercise options. Vesting timelines have arguments for longer and shorter, which is why I think the standard 4-years is settled on.

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

#763

Post by [deleted] »

jensneuse wrote: post #162

As a founder with multiple years of experience I can say that this post and a lot of other comments are coming from people who don't understand the life of a founder. It's not so much about risk. My peers earn 5-10x my salary. I'm paying my employees more than myself. I have to provide for 3 kids and we have a lot of debt on the house. I'm working day and night, 24/7. I don't like the phrase "taking money off the tab…

[deleted]

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

#764

Post by p0nce »

jensneuse wrote: post #162

As a founder with multiple years of experience I can say that this post and a lot of other comments are coming from people who don't understand the life of a founder. It's not so much about risk. My peers earn 5-10x my salary. I'm paying my employees more than myself. I have to provide for 3 kids and we have a lot of debt on the house. I'm working day and night, 24/7. I don't like the phrase "taking money off the tab…

How many of your employees have kids and a house?

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

#765

Post by s17n »

JumpCrisscross wrote: post #672
s17n wrote: post #439

Earlier quoted context omitted.

> They’re frequently syndicated at double-digit spreads What does this mean?

> What does this mean? Fund buys stock at X and simultaneously solicits LPs at 1.2X (whether by straight mark-up or, more commonly, by adding management fees, research fees, expense reserves and carry.) It’s why tenders have a few weeks between end of sellers submitting requests, confirmation of quantities and finally funding.

Interesting, thanks! Not to get too far off on this tangent, but how is that different from the way VCs / investment funds work in general (taking fees from the LPs in exchange for their services)?

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

#767

Post by dboreham »

ishan0304__ wrote: post #721
icedchai wrote: post #541

Earlier quoted context omitted.

Yeah, then the investors call a board meeting and bring in a new CEO to provide adult supervision after a 2/3rds vote. The give that guy more equity than you to keep the ship afloat. "It's not your company anymore."

Can never happen, the guy who says that this ain't ur money no more has made sure that investors know their place on board, they r afterall just passive investors who r spreading risks around, even wework a company that has fucked up financials had to give their founder close to a billion dollars just for stepping down, as long as the founder is a majority stakeholder, he will always remain in control

Not VCs then.

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

#768

Post by carom »

hemloc_io wrote: post #410

Damn I was writing a blogpost about this exact problem inspired by a talk w/ a friend of mine. Being an early engineer is the worst deal in all of tech, the people I've seen do it are either comfortably wealthy or just don't care about money.

I did it not caring about money and got burned so badly I was still mad. It's ok though, it is nice to return to work with good people earning more than 2x a founding engineer salary.

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

#769

Post by School-Cotton »

palata wrote: post #473
CSMastermind wrote: post #358

Earlier quoted context omitted.

It's normally considered a bad salary in comparison to what you could be making. I won't speak for the poster but I left a ~$1m / year TC job ($300k base the rest RSUs) to join a startup. I have a good salary compared to the population at large but it's a fraction of what I could be making on the hope that my equity turns into something meaningful that makes up for it.

I wish I knew how to get to $200k. Not even mentioning 1m/year, that seems absolutely insane to me.

If you live in the US and work as a software engineer at a top tech company it’s very straightforward to make more than 200k. Otherwise, it’s much harder.

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

#770

Post by bagels »

palata wrote: post #473
CSMastermind wrote: post #358

Earlier quoted context omitted.

It's normally considered a bad salary in comparison to what you could be making. I won't speak for the poster but I left a ~$1m / year TC job ($300k base the rest RSUs) to join a startup. I have a good salary compared to the population at large but it's a fraction of what I could be making on the hope that my equity turns into something meaningful that makes up for it.

I wish I knew how to get to $200k. Not even mentioning 1m/year, that seems absolutely insane to me.

Where do you live, what kind of company do you work for? Look at levels.fyi for data on what companies in the bay are paying.
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