I went through an acquisition very early in my career, and for the longest time I believed it was the best outcome for everyone. Over time, I realized that my naive belief was purely due to the founders going way above and beyond to make sure each and every employee (including folks doing just data entry) got a good outcome (accelerated vesting, significant equity in new company, top of the band pay, etc.). It made me realize that if you ever want to work at a start up, bet on the founder, rather the company. Even with mediocre outcomes, you'll end up ahead in the long run compared to folks who're just looking out for themselves.
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
#92Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#93Engineers: 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 tell every engineer always to maximize their cash comp and every founder and investor always says "No, that's such a bad idea! Get more equity!"
Yeah, because that is in your interests, not the engineer's.
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#94Engineers: 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've tried to ask dozens of companies that wanted to hire me just for how many shares were outstanding and/or authorized. They almost always refused to share.
You can almost never get any info on equity until it's too late and you realize it's worth nothing.
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#95https://x.com/ahmaurya/status/1948491614160122308 Garry Tan posted "sounds like a tweet that cost $20M" which he later deleted. Smells like a strong bias against employees in favor of management and founders.
That was really shady.
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#96This 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…
Actually, their recent acquirer is now raising at a $10B valuation from Founder's Fund.
They had plenty of value left even after getting gutted.
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#97Engineers: 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…
Additional resource:
Ask HN: How to negotiate stock options? - https://news.ycombinator.com/item?id=28401655 - September 2021
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#98A lot of bias against startups in the comments. These are missing (1) how terrible the working conditions in bigco have become in the meantime (2) truly good startups (they exist) that pay solid base salaries
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#99I was aquihired by a FAANG. The headline "startup bought for x million" is almost always a lie, either direct or by omission. First, when a startup is bought, its generally not bought at the headline rate. So if you see a "bought for $45m" that doesn't mean People who own shares all got a % of 45m. That number is normally bullshit, but also a "total package" which include share offers for joining the new company. Thi…
Yeah, I used to hear all the time that "a startup is worth $1 million per engineer in a pure acquihire", but learned the hard way this is a myth.
When we were talking to various companies about acquiring Sandstorm.io (my startup) in 2017, one of the companies told me, essentially: "We aren't interested in your IP, only the employees. We'll give you a set of job offers for them. We will then sum up the salary and equity grants from these offers, and call that the acquisition price. If you want to take some of that money and redirect it to your investors instead, that is up to you."
I was a bit taken aback. Obviously I wasn't about to take a cut of my employees' future comp and give it to investors.
Instead we ended up going to Cloudflare, but not as an acquisition. Cloudflare told us very honestly that they couldn't justify buying the IP, but they would be willing to acquire the company for $0 to wind it down for us. I decided to just take the job offers but keep the company independent as an open source side project, thinking maybe I'd revive it eventually. Turned out to be a mistake as some guy who was mad we didn't hire him sued Sandstorm six months later, and that was then my problem instead of Cloudflare's, oops. Should have sold for $0.
(Once it became clear to the plaintiff('s lawyer) that we weren't going to settle, they stopped pushing the case forward, but didn't drop it, so it just sat in limbo for 5 years before the judge finally threw it out it 2022. Meanwhile I couldn't dissolve the company and had to keep filing taxes for it. Ugh... lessons learned.)
Re: Windsurf employee #2: I was given a payout of only 1% what my shares where worth
#100https://x.com/ahmaurya/status/1948491614160122308 Garry Tan posted "sounds like a tweet that cost $20M" which he later deleted. Smells like a strong bias against employees in favor of management and founders.
Could you expand what's going on there?