811–820 of 943 posts
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When is the outcome 'known'? Only when the business fails?
Sells or shuts or goes public. Those are the only three outcomes for a venture backed startup.
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I am convinced that the WFH movement is responsible for the recent offshoring trend. Before 2020, it was fairly uncommon to work remotely and most employees were expected to physically come to the office. You would relocate if you got a job in another state, and employers had to go through a painful visa process to access foreign workers or set up expensive international satellite offices. The great WFH experiment ki…
That will change once legislation gets passed requiring remote workers who are not located in the same country to need to go through the work visa process. The outsourcers are shooting themselves in the foot. Once the law drops and they cannot bring over the cheap remote labor due to visa limits, they will end up with skeleton crew teams that cannot maintain the spaghetti systems that are being built.
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Exactly. As a former founder who dealt with hospitalization and thousands of dollars a year in medical bills on the sh!t insurance startups can afford, I too would rather have 500K now than 50M later. There's also a good chance I could turn 500K into 5M-20M in 10 years with reasonably low risk investments. Plus, setting 100K aside for medical bills and even throwing the 400K into Bitcoin is a far less risky investmen…
> There's also a good chance I could turn 500K into 5M-20M in 10 years with reasonably low risk investments. I would very much like to know where you can find low-risk investments that are likely to net you 10x-40x returns in the span of 10 years. (But overall I very much agree with your point that $500k now and $45M later can be a much much much better deal for someone than $0 now and $50M later. I would likely take…
By doing homework and research every day and investing only in things you personally deeply understand.
But if you don't want to do that ... passively investing in QQQ would have given you a 5.4X return in the past 10 years.
If you just throw your money across some large, too-big-to-fail companies, you could have 10X'ed easily.
AAPL, NVDA, MSFT, TSLA, NFLX have all >10X in the past 10 years. GOOG, META have come close.
You could have split your money evenly across the biggest 5-10 companies in tech and 10X'ed.
And if you actively invest and do day-to-day research it's fairly easy to beat 10X in 10 years.
By the way my definition of "low risk" is calibrated to the risk of founding your own startup and making 100K/year hoping for a big payout later in the future vs. joining a big company and making 500K/year.
My "startup founder calibrated" low risk stock investment means:
- Reasonably high probability to 10X in 10 years
- Some probability of losing money, but very low probability of losing most of your money
- If you lose money, it's because of a major world situation, and holding for another 10 years will probably get you out of that
- You also have skills and are hireable so you can hold the stocks
In my 20s I joined a couple startups as "early engineer" or "founding engineer". I quickly realized those are the absolute worst positions to be in. You take almost as much risk as the founders but almost none of the upside. One startup died, the other one sold for 100m$. Out of that I saw 400k$ as an exit. Not too bad but even with that exit I ended up making way less than if I joined a FAANG. In both cases the foun…
Founding engineers are so underpaid relative to founders. I’ve seen it be founding CTO with 40% and founding engineer with 1%. It’s ridiculous and we should not accept it as the standard. A few good early hires can be just as valuable as good founders.
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Exactly. As a former founder who dealt with hospitalization and thousands of dollars a year in medical bills on the sh!t insurance startups can afford, I too would rather have 500K now than 50M later. There's also a good chance I could turn 500K into 5M-20M in 10 years with reasonably low risk investments. Plus, setting 100K aside for medical bills and even throwing the 400K into Bitcoin is a far less risky investmen…
>There's also a good chance I could turn 500K into 5M-20M in 10 years with reasonably low risk investments. Please tell me more about these 25-37% pa low risk 10 year investments.
Joining a startup is extremely high risk from an opportunity cost standpoint. Literally any profitable company's stock is low-risk in comparison.
But ... if you don't want to do homework, you could just buy a smattering an equal distribution of the biggest names in tech (MSFT, NVDA, AAPL, GOOG, META, TSLA, etc.) and you would have easily gotten 25-37% pa averaged over the past 10 years. It's highly unlikely all these companies suddenly fail, all together.
And if you want to protect yourself against that, write covered calls at ~15-20% per week and use the proceeds to buy protective puts on all of your stocks.
(Disclaimer: not investment advice blah blah blah)
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The average SUCCESSFUL founder is in their earlier 30s. At that point - you should be at least L4 (probably L5) at FAANG. Salaries are about ~$450k at that level and age. In 5 years, if you work even a fraction of as hard as you need to be a successful founder, you should be L7 - salaries are usually >$800k at that point. No, it is not like any average slacker straight out of college in 5 years can get to a $1M salar…
levels.fyi says Google L4 in the Bay Area is 306k total comp on average. https://www.levels.fyi/companies/google/salaries/software-en...
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…
You want insurance against the case in which it actually rockets to billions in valuation (even if extremely unlikely)
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> If a founder cashes out 10% of their position for $500k @ $25M Series A valuation, that de-risks a lot of their personal life. But when the startup ends up selling for $250M, that $500k of 'early' selling would have been worth $5M (less any dilution between rounds) - hard not to regret the choice in that case even if hedging is going to be the correct choice 99% of the time. IMHO, it's very easy not to regret, with…
Exactly. About 15 years ago I was offering equity in a good little startup. I didn't take it because I just wanted to go somewhere with a higher salary. When they finally sold about a decade later I ran the numbers and determined it would have been about $40,000 based on the actual sale price. There's no guarantee of a $50M exit for anybody.