Disclosure: I worked for various "startup" companies starting in 1991 through 2005. One got bought by a large company and made me some money, but not a life-changing amount. Some others variously went into "zombie" mode. One got bought by a company that simply milks the existing customer base for support revenue. One failed outright.
That said, when the first company was bought, there was a product that the buying company didn't want to continue to support. Some friends of mine made an agreement to take over that product, and started a company to do so. They never grew the customer base that much - it was a niche product. However, they were able to continue to work together as friends, have decent paychecks with 100% company-paid insurance, and after about 15 years, sold out to a company for enough to allow for comfortable (not rich) retirements. This was all on purpose and was discussed frequently by them - "Do we want to grow, or do we want to enjoy what we're doing, have some free time, less stress, and remain friends?"
I've always thought that was a FINE model for a company, if you can pull it off. I always wanted to work there (did some consulting for them), but they could never grow quite enough to hire me. Ah, well. :)
That's the story of the startup I work for as well. It survived long enough to find it's niche product and then stabilized. Everyone had decent pay and great hours. Eventually an exit opportunity came around and we all made some money. Parent org lets us keep maintaining and developing our niche product more or less independently. The more ambitious execs moved up into the parent org, but the rest of us remain friends working at a comfortable job.
Those aren't really startups though, at least according to Paul Graham. Those are more akin to small businesses. A startup is born to scale exponentially.
Reading the comments on this an post and many others about compensation and payouts makes me feel like I'm losing my mind.
I grew up in a lower-middle-class house where both my parents worked for the postal service. Both parents worked strange and/or long hours and they performed very physically demanding work. I can remember several cases of them being out of work because of injuries. We were never poor but we never had extra. Meaning we always had food and cable television but rarely went out to eat or went on vacations.
I took a major liking to computer programming and pursued that as a career since high school. I find it unbelievable that I make a good living off of doing a job that I find really enjoyable and plus I make great money doing it.
My first job out of college I started working for a major manufacturer of PC's and printers and I started off with a higher salary than what my dad was making at the time, $65,000. I thought I was rich and set for life.
Working in the software industry makes me feel like I'm on another planet, I'm just excited to keep getting a paycheck every two weeks and then I read discussions about people chasing lotteries or trying to pull in 250k with bonuses.
I don't think it's bad to maximize your earning potential but the figures and mentality around feel so foreign to me. All that to say it's just a weird experience going from rural Oregon to the software industry and see the massive difference in lifestyle and the relationship people have with work.
You're not losing your mind, same here. I think a lot - particularly on the younger side - have done almost nothing besides software in a serious way. A lot of people have no perspective on how hard life is for a really large chunk of this country. The "go away to southeast asia and live on a beach for 6 months to reset yourself" is the one that makes me feel most out of touch. If/when we have another crunch some people will have very rude wake up calls.
I grew up in rural Oregon as well. (Outside of Roseburg) I made more than both of my parents combined with my first post college job at $65k/yr. (And I was severely underpaid) Now I make closer to $200k but without 2 $200k incomes it feels like poverty in the Bay area. I rent a 400sqft in-law unit and another person rents the 900sqft 1930's 2 bedroom house in the front. We both pay a lot for relatively meager living conditions. We live in a nicer area but it's very suburban. This property is worth close to $2m according to Zillow (and recent sales we have seen). It's not nice or updated or even a large lot (4k sqft).
$2,000,000 for a pretty small house and lot. There's a reason a lot of folks here are chasing money - it's the only way to have a quality of life and lifestyle similar to those outside the bay area.
You're not losing your mind. Your perspective is different, and it might perhaps change over time. From your description of your upbringing it sounds like we have/had a lot in common. I was raised by a single father who made $40k/year at best. I was able to get a "new" computer every 3 years from age 11 on, but that was about it. My clothes were old. My shoes didn't fit well. My school backpack was held together by safety pins. My car in high school was bought for $800 and was almost as old as I was.
My first job was for $75k - 80% more than my father was making at the time. Now I make more money than my entire family at their maximum earnings even adjusted for inflation. This doesn't impress me, give me any comfort or a sense of success.
The drive, for me, for a "fuck-you money" payout is this simple desire: "I don't want anyone to tell me what to do with my time."
I think we grew up in a similar level of a family and our first jobs were also quite similar. My first job was also for a big hardware chip maker for slightly less pay. (not in Silicon Valley) I felt rich and set for life.
I'll say though, the SF Bay Area has a way to make you feel poor. It's not even keeping up with the joneses type stuff with your software engineer peers. It's just normal living expenses. Six figures salaries don't feel rich unless you enter the "2"+ territory. $1xxk doesn't feel much more than the $60k first job outside of the bay I had in the mid-00s, even high $1xxk, especially with a family to raise. After years of living like that, it makes more sense that people want to maximize their earning potential.
You're right on the money here. And I think an engineer can have a pretty solid, fulfilling, well-enough-paying career working for a whole string of failed startups!
The thing is that the rich-poor gap has grown considerably as well. In this era if you don't have at least millions you can hardly get themselves/their family a comfortable life/retirement in a metropolitan area. Nobody feels secure anymore and it's only understandable that everybody wants to pull in as much money as possible while they can. Some works such as Capitalism in the 21st Century talk about this but you should also have felt it yourself.
We are lucky. We live at a lucky time, when the thing we like to do is very lucrative. 30 years ago it was not like this for programmers, and maybe 30 years from now it will also not be like this.
I appreciate that you are satisfied with your income and that the desire for more irks you. However, I think one thing to consider is that capitalism always means that people are making money on top of the cost of your labour.
Maybe the capitalists took a huge risk of investing (employing) you and you feel grateful to leave more money to them. Maybe the capitalists do a lot of work for themselves too and are rewarded appropriately in equity.
But it's not uncommon that labour is just exploited.
#6 Have a crystal ball that can predict the future. Since the success of a startup is often based on unpredictable changes in markets, technology, or world events, even if you follow all of the other steps here to avoid a zombie startup, you may end up in one. And you may avoid a startup that was really onto something.
Okay, so I am being a little satirical. But honestly, if it was so easy to pick winners, VCs would invest in far fewer companies. As an individual trying to pick the winner, you have close to zero probability of being right.
Well if you do your due diligence, look for startups which offer proper equity to employees (which is sadly very rare), you have an advantage over VCs. You get the option to quit or continue working at the company and earn the rest of your invested stock. The trick is to shop around, evaluating each startup while you work for it, until you find one that has hit the jackpot and made your unversed equity very valuable.
Agreed. Until you do not enter a startup, it's hard to know how it actually works.
During interviews and preliminary hiring-talks they may sell the pitch as if everything were wonderful, but potentially, the unfortunate reality could be that things are not that nice.
Rather thin and worthless article, not really deserving of what looks to be on its way to a 100 comment article.
Very first sentence:
> People tend to underestimate the financial opportunity that startups represent for early employees.
um, no, absolutely, emphatically not. This article is written by a person whose job is headhunting for startups. So off the bat, the bias is off the charts.
It's exactly the opposite. People (employee candidates) tend to overestimate the financial opportunity, both in value and likelihood.
> But being good at picking which startup to join as an employee means, in part, being as diligent as an investor.
Diligent sure, but nowhere does the article explain such diligence, and anyway investor diligence is not anything like employee diligence.
All the points have flaws, but one general theme stood out, that they are pushing equity vs salary.
This seems well intentioned, but it strains credulity on a couple fronts:
1. This article is referring to VC backed startups, which generally speaking 9 of 10 die. Are you going to statistically better at picking a winner than a VC (consider also that you aren't diversifying your investment as you only work at 1 startup at a time).
2. While transparency is indeed key, there are levels. It's unlikely any company is going to be so radically transparent as to tell you the details you'd need to actually determine their financial fitness going forward.
Consider that Telltale Games last week managed to both hire a new developer, move them across the country and then call them into a meeting to let them know that they'd be let go along with most of the rest of the company in a massive layoff. That's a lack of transparency as to what is happening _within_ the company.
3. VC backed startups are just inherently volatile. I worked for a YC company that raised between $75-$100 mil (keeping it vague) and they were more or less insane: just weird unforced errors and oddness and Steve Jobs complex. They recently closed as their round failed due to a combination of IP theft, "Trump trade issues" and inability to execute in the face of more advanced competitors.
It's often not just one thing that pushes a startup from "rocket ship" to "zombie", it's everything.
4. Being an early stage employee (non-founder) is a rough spot. Typically you're taking less on salary because of "generous" equity. However, you're also expected to work founder hours. As liquidity events have diminished, so have opportunities to actually cash out.
All that being said, I'd still encourage people to work for a startup, but to do it on their own terms: to learn, to get a new experience, to try and set yourself up to do your own creation. Please just don't rely on picking a rocketship.
> Consider that Telltale Games last week managed to both hire a new developer, move them across the country and then call them into a meeting to let them know that they'd be let go along with most of the rest of the company in a massive layoff. That's a lack of transparency as to what is happening _within_ the company.
Does that mean there are no companies that do better than that, though?
But here in the real world outside of the HN Silicon Valley bubble, most would be statistically better off working for a company with a mostly guaranteed combination of salary+guaranteed stock over a known vesting period that is competitive with the market.
If the company is private, negotiate for a salary that’s competitive with the market.
“Competitive” doesn’t mean that everyone is going to move to SV and work for a FAANG.
Best risk adjusted returns come from late stage startups - Series C or D typically - for VP level roles that get 1% grants ($4-$10m value over 4 years). Highly de-risked.
At year two or three the company will also likely top up the equity if they want you to stay... just negotiate a 10 year exercise window, so you're not writing a check on your way out the door.
For whatever reason, why individual contributor equity grants fall off a cliff after Seed or Series A, the VPs remain relatively constant even as the value of the company goes up 20-50x while risk plummets.
Now that I've got quite a bit of experience behind me, I've started to become very attuned to "savior-seeking": somebody (or a group of people) who underestimated how difficult building a business was going to be and is now underwater, desperate for a lifeline. Although I (sort of) sympathize with the position they're in, I also know that I don't have the magic that they expect, or the 24/7 availability they're going to need, to dig them out of the hole they've put themselves in.
Late comment though I'm not sure if point 2 about awards and press coverage is true. Surely you can't spend all your time on marketing but you still need to gain traction somehow? I would like to see some opinions on this.
It might be more interesting to write a post about how to exit a zombie startup once you've joined one, or how to determine the zombie status from the inside.
You're usually valued and crucial at one. So try to fix it and give them the option of firing you if they don't like it.
Identifying it is when they say things are going to happen but they either don't get done or some shadow of that thing gets halfway done 6 months too late.
Also you may be in because it's a hot idea. If you see other companies pop up with the same idea and they are actually moving and yours isn't, then leave.
First to market is irrelevant if the first people are bozos who can't scale. Everyone will steal their idea and the original innovator will trip over their shoelaces.
Yes, I think that would be the most useful piece of advice (and probably something that inexperienced employees right out of college, tend to be particularly bad at).
They make joining a startup seem like it's supposed to be a get rich quick scheme.
Focusing on how someone can buy shares at low price and sell high kind of only selects for one kind of company -- the VC funded company whose entire goal is either an IPO or an acquisition.
What about the startup that has no plans for acquisitions nor IPO's, and is not in the business of giving out shares to employees, yet can pay their employees great competitive wages with benefits?
Most startups fail. Opting for equity that might be worth more tomorrow at the expense of liquid cash today doesn't sound much different than buying a lottery ticket and hoping you picked the right numbers.
Why not look at the offer at face-value instead? Is there decent pay? How much BS will I have to deal with? Is there opportunity for career advancement (if I care about that)? If I have to leave, will I be more competitive in the marketplace? Will I have a life outside of work?
Seeing a friend of mine go through that rigmarole more than once, my observations are that zombie startups simply aren't nice places to work, it's always crunch time, you're always piling on tech debt, and wiping your ass with the equity grant will serve you better than waiting for it to vest. The culture can turn hostile in an instant, and toxic management hires can come out of nowhere and upset the apple cart just to make their company look good for the mirage of an aquihire.
The founders don't give two shits about your career, mental health, or really anything, just meeting the next milestone.
Worst case: it's a stressful waste of time that doesn't help your career.
Stressful because the company is already in distress. Maybe the employees aren't aware, and maybe even the founders themselves are too naive to be aware, but the founders will be heavily under the gun to find a path to satisfy the hype they've built up. Or they'll check out if they don't even care to get back on the path.
Waste of time because you won't learn anything in a flailing, failing company.
Doesn't help your career because of the lack of learning and growth opportunities within a distressed company. Nobody will be impressed by the entry on your resume. Will likely hurt because of the opportunity cost, even.
I disagree with the author that being an early employee is a solid path to make you wealthy — that only happens when a company experiences sharp growth after you join and finds liquidity at a much higher price than your option price. That happens but is rare. A better benefit is to jump-start your career and get experience you wouldn't be able to get at a BigCo. For that all you need is upward mobility in a well-performing startup. And you won't get that at a distressed company.
Unless you are a founder, look for product-market fit, growth and revenue. Think like an investor. Otherwise you will show up one day and are told, "We have to let everyone go". Or a permanent 50% salary cut with no notice the day before payroll.
Basically you should make the same assumptions you would joining a project as a freelancer/contractor - if you make enough money and don't care about career development and job security and quite possibly difficult atmosphere then why not, a job is a job. But if you're joining with the assumption that you'll be able to develop your career, or that it will be a fun/friendly/familial environment, or that you're deferring making real money until you cash in your equity, it's extremely likely that you'll end up bitter and disappointed a few months/years later.
All of the downside of a startup (long hours, fire fighting, stress... all of which never ends) without the upside (an exit which is the pot of gold at the end of the rainbow that you put up with the rest of it for.) The way to make a zombie startup work for you is in a role where you're getting paid by the hour or deliverable that you can control (i.e. contracting or consulting) and absolutely do not go in as an employee if you have a choice.
These are all great points but they assume you have the financial freedom and the understanding that you'll actually get offers which gives you the freedom to pick the perfect startup for you.
Most of the time, in reality, I've had to pick from one or two while my savings are quickly dwindling.
While it's true that you are unlikely to hit it big as a startup employee, I think the article misses some of the real reasons to not join a zombie startup. I worked at one many years ago and the problem was there was no place to take your career. The stock wasn't going anywhere, compensation was lackluster, the company wasn't going to expand, and thus the only way to get a promotion was to sit there and build personal connections, IE: not based on merit, rather on drinking buddies / nepotism / etc. The career challenges - responsibility, technology, etc were not great. So, it was a good place to be an alumni in terms of connections, but there was no other benefit.
The article makes a couple of references to "public actors":
>"Business angels investing with strong tax incentives, universities or companies filling up their marketing brochures and public actors who aren’t betting their own money at all are a couple examples. So don’t settle for “We’ve raised a Series A”: Ask with whom and look them up.
If you see that the money raised just comes from public actors, ..."
Could someone say what is a "public actor"? I am not familiar with this term.
Let us cut off an underlying assumption of the article - that only rocket ship startups with massive exits are worthwhile places to work. That simply isn't true. A long, slow, stable growth of a bootstrapped company can still give a lucrative exit because there is no dilution. You also can be a multi-millionaire with simple saving and investments, no "exit" needed. Non-funded startups also can produce less stress as you get profitable and nobody is pushing you for a billion dollar exit. You can decide as a group if you want to push for something larger or just enjoy the ride and have more time with your family.
These are not bad things. As was mentioned in a few threads over the past few weeks, nobody lies on their deathbed wishing they had done more work and spent less time with friends and family.
While VC-driven startups can give you a large exit, so can playing the lottery. Don't fool yourself into thinking this is a guaranteed get rich plan. By all means, try it if you have the time and energy and enjoy the work. But if you don't have the passion and energy for VC-funded startups, then admit that to yourself and do something else.
For quite a long time now, the smart advice has been to avoid startups if you are only there for the payoff. You, as an employee, are not a VC who can gamble across many investments. Where 10% success is great because of the power law.
I'm continually surprised that this needs to be repeated, almost biweekly here on HN.
As someone advanced in my career, I enjoy startup life for the startup life. As a noob out of college, I very, very highly recommend startup life as you will never be so risk tolerant again in your life, and you can't get the experience any other way. You can afford to fail and then move on to a bigco if you want stability. Also, you will form bonds and make friends that won't happen at a bigco.
Someone should put together a spreadsheet showing the value of a 1% equity stake at seed and series A for YC companies that have had an exit. (It's not hard.) I guess airbnb hasn't had an exit yet, but we can just use $40bn as a reasonable number.
All the online dilution calculators are targeted to founders, so they can model and make raise decisions at each round. For us, it's a very easy depreciation calculation. Anyway 1% post-A results in .52% post-E using a calculator I found easily that has reasonable defaults for each round. That $200MM of airbnb, really astounding. Do consider it took 13 years to get there. OTOH your 1% would have been good after only 4 years.
Let's say you limit your startup job search to just YC companies. Now you just need to factor in the number of YC companies, the number of employees at Series A and earlier, your likelihood to get 1% (unlikely to impossible), and your likelihood of landing in a successful startup.
YC could make this type of calculator online for anyone but that would discourage employment. Someone here can easily produce it.
Please don't make the mistake of thinking you can pick the winner and therefore your likelihood of success is multiplied. You can't. Even YC (and all other incubators) can't, that's why they spray the money around.
Working for a VC-backed startup is definitely not a guaranteed get-rich-quick scheme, but working for a low wage at a no/slow-growth "startup" is a guaranteed stay-poor scheme.
This is slightly tangential but I always wonder whether this common piece of wisdom is tainted by bias: Nobody lies on their deathbed wishing they had done more work and spent less time with friends and family
As you grow older, your ability to be productive decreases to the point where 'doing work' is impossible. It's no surprise, then, that most people who sit on their deathbed value friends/family over work. However, this doesn't mean 'doing more work' and 'being productive' isn't a respectable and equally fulfilling value to friends/family when you are young.
Yet, this generic piece of wisdom is often used to diminish ppl who value productivity over all else. I'm not saying one is better than the other, but aren't we getting a slightly biased perspective when we mimic values after old people? Values morph over your life, and the values that are best suited for old age aren't necessarily best suited for young age.
> As was mentioned in a few threads over the past few weeks, nobody lies on their deathbed wishing they had done more work and spent less time with friends and family.
I mean, that can be debatable imo. It's an oversimplification.
To think of it simply; Does spending less time with your family now, mean more time in 2 years? Are the now years more valuable than the 2+ years? Is there a risk of 2 years becoming 10? More time now is great, but what if you're worrying about money constantly? etc
There's a ton of decisions that go into big life decisions. Time with family, even if family is everything in your view, is not the only input. Time is meaningless without context.
And the goal of just growing as quickly as possible to the exit event is questionable at best. It leads to many unfortunate side effects that create unsustainable businesses with illusory short term growth, and the overlooking of unethical and illegal behavior in many instances. I don't need to provide examples, there are plenty in the news.
We need to move beyond this old fashioned idea of shareholder primacy, there are more important things to consider than just clawing at an equity stake and optimizing to increase the value of that stake at the expense of everything else.
[+] [-] dullroar|7 years ago|reply
That said, when the first company was bought, there was a product that the buying company didn't want to continue to support. Some friends of mine made an agreement to take over that product, and started a company to do so. They never grew the customer base that much - it was a niche product. However, they were able to continue to work together as friends, have decent paychecks with 100% company-paid insurance, and after about 15 years, sold out to a company for enough to allow for comfortable (not rich) retirements. This was all on purpose and was discussed frequently by them - "Do we want to grow, or do we want to enjoy what we're doing, have some free time, less stress, and remain friends?"
I've always thought that was a FINE model for a company, if you can pull it off. I always wanted to work there (did some consulting for them), but they could never grow quite enough to hire me. Ah, well. :)
[+] [-] kenhwang|7 years ago|reply
[+] [-] sombremesa|7 years ago|reply
[+] [-] tenpoundhammer|7 years ago|reply
I grew up in a lower-middle-class house where both my parents worked for the postal service. Both parents worked strange and/or long hours and they performed very physically demanding work. I can remember several cases of them being out of work because of injuries. We were never poor but we never had extra. Meaning we always had food and cable television but rarely went out to eat or went on vacations.
I took a major liking to computer programming and pursued that as a career since high school. I find it unbelievable that I make a good living off of doing a job that I find really enjoyable and plus I make great money doing it.
My first job out of college I started working for a major manufacturer of PC's and printers and I started off with a higher salary than what my dad was making at the time, $65,000. I thought I was rich and set for life.
Working in the software industry makes me feel like I'm on another planet, I'm just excited to keep getting a paycheck every two weeks and then I read discussions about people chasing lotteries or trying to pull in 250k with bonuses.
I don't think it's bad to maximize your earning potential but the figures and mentality around feel so foreign to me. All that to say it's just a weird experience going from rural Oregon to the software industry and see the massive difference in lifestyle and the relationship people have with work.
[+] [-] throwaway5752|7 years ago|reply
[+] [-] bradlys|7 years ago|reply
$2,000,000 for a pretty small house and lot. There's a reason a lot of folks here are chasing money - it's the only way to have a quality of life and lifestyle similar to those outside the bay area.
[+] [-] kradroy|7 years ago|reply
My first job was for $75k - 80% more than my father was making at the time. Now I make more money than my entire family at their maximum earnings even adjusted for inflation. This doesn't impress me, give me any comfort or a sense of success.
The drive, for me, for a "fuck-you money" payout is this simple desire: "I don't want anyone to tell me what to do with my time."
[+] [-] godot|7 years ago|reply
I'll say though, the SF Bay Area has a way to make you feel poor. It's not even keeping up with the joneses type stuff with your software engineer peers. It's just normal living expenses. Six figures salaries don't feel rich unless you enter the "2"+ territory. $1xxk doesn't feel much more than the $60k first job outside of the bay I had in the mid-00s, even high $1xxk, especially with a family to raise. After years of living like that, it makes more sense that people want to maximize their earning potential.
[+] [-] jpm_sd|7 years ago|reply
[+] [-] SZJX|7 years ago|reply
[+] [-] Maro|7 years ago|reply
[+] [-] whytaka|7 years ago|reply
Maybe the capitalists took a huge risk of investing (employing) you and you feel grateful to leave more money to them. Maybe the capitalists do a lot of work for themselves too and are rewarded appropriately in equity.
But it's not uncommon that labour is just exploited.
[+] [-] ttul|7 years ago|reply
Okay, so I am being a little satirical. But honestly, if it was so easy to pick winners, VCs would invest in far fewer companies. As an individual trying to pick the winner, you have close to zero probability of being right.
[+] [-] ummonk|7 years ago|reply
[+] [-] __exit__|7 years ago|reply
During interviews and preliminary hiring-talks they may sell the pitch as if everything were wonderful, but potentially, the unfortunate reality could be that things are not that nice.
[+] [-] jiveturkey|7 years ago|reply
Very first sentence:
> People tend to underestimate the financial opportunity that startups represent for early employees.
um, no, absolutely, emphatically not. This article is written by a person whose job is headhunting for startups. So off the bat, the bias is off the charts.
It's exactly the opposite. People (employee candidates) tend to overestimate the financial opportunity, both in value and likelihood.
> But being good at picking which startup to join as an employee means, in part, being as diligent as an investor.
Diligent sure, but nowhere does the article explain such diligence, and anyway investor diligence is not anything like employee diligence.
All the points have flaws, but one general theme stood out, that they are pushing equity vs salary.
[+] [-] michaelbuckbee|7 years ago|reply
1. This article is referring to VC backed startups, which generally speaking 9 of 10 die. Are you going to statistically better at picking a winner than a VC (consider also that you aren't diversifying your investment as you only work at 1 startup at a time).
2. While transparency is indeed key, there are levels. It's unlikely any company is going to be so radically transparent as to tell you the details you'd need to actually determine their financial fitness going forward.
Consider that Telltale Games last week managed to both hire a new developer, move them across the country and then call them into a meeting to let them know that they'd be let go along with most of the rest of the company in a massive layoff. That's a lack of transparency as to what is happening _within_ the company.
3. VC backed startups are just inherently volatile. I worked for a YC company that raised between $75-$100 mil (keeping it vague) and they were more or less insane: just weird unforced errors and oddness and Steve Jobs complex. They recently closed as their round failed due to a combination of IP theft, "Trump trade issues" and inability to execute in the face of more advanced competitors. It's often not just one thing that pushes a startup from "rocket ship" to "zombie", it's everything.
4. Being an early stage employee (non-founder) is a rough spot. Typically you're taking less on salary because of "generous" equity. However, you're also expected to work founder hours. As liquidity events have diminished, so have opportunities to actually cash out.
All that being said, I'd still encourage people to work for a startup, but to do it on their own terms: to learn, to get a new experience, to try and set yourself up to do your own creation. Please just don't rely on picking a rocketship.
[+] [-] lmm|7 years ago|reply
Does that mean there are no companies that do better than that, though?
[+] [-] scarface74|7 years ago|reply
If the company is private, negotiate for a salary that’s competitive with the market.
“Competitive” doesn’t mean that everyone is going to move to SV and work for a FAANG.
[+] [-] balls187|7 years ago|reply
1. You like the people, and they like you.
2. You like what the company is doing.
3. You need a job.
[+] [-] mrnobody_67|7 years ago|reply
At year two or three the company will also likely top up the equity if they want you to stay... just negotiate a 10 year exercise window, so you're not writing a check on your way out the door.
For whatever reason, why individual contributor equity grants fall off a cliff after Seed or Series A, the VPs remain relatively constant even as the value of the company goes up 20-50x while risk plummets.
[+] [-] commandlinefan|7 years ago|reply
[+] [-] mlthoughts2018|7 years ago|reply
> “People tend to underestimate the financial opportunity that startups represent for early employees.”
I would laugh if it wasn’t so sad.
[+] [-] SZJX|7 years ago|reply
[+] [-] mooreds|7 years ago|reply
[+] [-] kristopolous|7 years ago|reply
Identifying it is when they say things are going to happen but they either don't get done or some shadow of that thing gets halfway done 6 months too late.
Also you may be in because it's a hot idea. If you see other companies pop up with the same idea and they are actually moving and yours isn't, then leave.
First to market is irrelevant if the first people are bozos who can't scale. Everyone will steal their idea and the original innovator will trip over their shoelaces.
[+] [-] ummonk|7 years ago|reply
[+] [-] mygo|7 years ago|reply
Focusing on how someone can buy shares at low price and sell high kind of only selects for one kind of company -- the VC funded company whose entire goal is either an IPO or an acquisition.
What about the startup that has no plans for acquisitions nor IPO's, and is not in the business of giving out shares to employees, yet can pay their employees great competitive wages with benefits?
Most startups fail. Opting for equity that might be worth more tomorrow at the expense of liquid cash today doesn't sound much different than buying a lottery ticket and hoping you picked the right numbers.
Why not look at the offer at face-value instead? Is there decent pay? How much BS will I have to deal with? Is there opportunity for career advancement (if I care about that)? If I have to leave, will I be more competitive in the marketplace? Will I have a life outside of work?
[+] [-] gdhbcc|7 years ago|reply
I'm currently considering an offer from one that basically ticks every checkmark on the list, so I'd love to know what is bad about it
[+] [-] vinceguidry|7 years ago|reply
The founders don't give two shits about your career, mental health, or really anything, just meeting the next milestone.
[+] [-] jforman|7 years ago|reply
Stressful because the company is already in distress. Maybe the employees aren't aware, and maybe even the founders themselves are too naive to be aware, but the founders will be heavily under the gun to find a path to satisfy the hype they've built up. Or they'll check out if they don't even care to get back on the path.
Waste of time because you won't learn anything in a flailing, failing company.
Doesn't help your career because of the lack of learning and growth opportunities within a distressed company. Nobody will be impressed by the entry on your resume. Will likely hurt because of the opportunity cost, even.
I disagree with the author that being an early employee is a solid path to make you wealthy — that only happens when a company experiences sharp growth after you join and finds liquidity at a much higher price than your option price. That happens but is rare. A better benefit is to jump-start your career and get experience you wouldn't be able to get at a BigCo. For that all you need is upward mobility in a well-performing startup. And you won't get that at a distressed company.
[+] [-] reality_czech|7 years ago|reply
* The only thing the cafeteria serves is BRAAAAAAINS.
* Your noncompete agreement is still valid even after you die.
Aside from that, it's pretty similar to working at Google.
[+] [-] officialchicken|7 years ago|reply
[+] [-] intellectronica|7 years ago|reply
[+] [-] blihp|7 years ago|reply
[+] [-] bambataa|7 years ago|reply
If they’ve been going for X years and they don’t have a lot to show for it then that’s a major red flag for me.
[+] [-] rocky1138|7 years ago|reply
Most of the time, in reality, I've had to pick from one or two while my savings are quickly dwindling.
[+] [-] poulsbohemian|7 years ago|reply
[+] [-] bogomipz|7 years ago|reply
>"Business angels investing with strong tax incentives, universities or companies filling up their marketing brochures and public actors who aren’t betting their own money at all are a couple examples. So don’t settle for “We’ve raised a Series A”: Ask with whom and look them up.
If you see that the money raised just comes from public actors, ..."
Could someone say what is a "public actor"? I am not familiar with this term.
[+] [-] prablenha|7 years ago|reply
[+] [-] codingdave|7 years ago|reply
These are not bad things. As was mentioned in a few threads over the past few weeks, nobody lies on their deathbed wishing they had done more work and spent less time with friends and family.
While VC-driven startups can give you a large exit, so can playing the lottery. Don't fool yourself into thinking this is a guaranteed get rich plan. By all means, try it if you have the time and energy and enjoy the work. But if you don't have the passion and energy for VC-funded startups, then admit that to yourself and do something else.
[+] [-] jiveturkey|7 years ago|reply
I'm continually surprised that this needs to be repeated, almost biweekly here on HN.
As someone advanced in my career, I enjoy startup life for the startup life. As a noob out of college, I very, very highly recommend startup life as you will never be so risk tolerant again in your life, and you can't get the experience any other way. You can afford to fail and then move on to a bigco if you want stability. Also, you will form bonds and make friends that won't happen at a bigco.
Someone should put together a spreadsheet showing the value of a 1% equity stake at seed and series A for YC companies that have had an exit. (It's not hard.) I guess airbnb hasn't had an exit yet, but we can just use $40bn as a reasonable number.
All the online dilution calculators are targeted to founders, so they can model and make raise decisions at each round. For us, it's a very easy depreciation calculation. Anyway 1% post-A results in .52% post-E using a calculator I found easily that has reasonable defaults for each round. That $200MM of airbnb, really astounding. Do consider it took 13 years to get there. OTOH your 1% would have been good after only 4 years.
Let's say you limit your startup job search to just YC companies. Now you just need to factor in the number of YC companies, the number of employees at Series A and earlier, your likelihood to get 1% (unlikely to impossible), and your likelihood of landing in a successful startup.
YC could make this type of calculator online for anyone but that would discourage employment. Someone here can easily produce it.
Please don't make the mistake of thinking you can pick the winner and therefore your likelihood of success is multiplied. You can't. Even YC (and all other incubators) can't, that's why they spray the money around.
[+] [-] intellectronica|7 years ago|reply
[+] [-] smallgovt|7 years ago|reply
As you grow older, your ability to be productive decreases to the point where 'doing work' is impossible. It's no surprise, then, that most people who sit on their deathbed value friends/family over work. However, this doesn't mean 'doing more work' and 'being productive' isn't a respectable and equally fulfilling value to friends/family when you are young.
Yet, this generic piece of wisdom is often used to diminish ppl who value productivity over all else. I'm not saying one is better than the other, but aren't we getting a slightly biased perspective when we mimic values after old people? Values morph over your life, and the values that are best suited for old age aren't necessarily best suited for young age.
[+] [-] ummonk|7 years ago|reply
[+] [-] asdkhadsj|7 years ago|reply
I mean, that can be debatable imo. It's an oversimplification.
To think of it simply; Does spending less time with your family now, mean more time in 2 years? Are the now years more valuable than the 2+ years? Is there a risk of 2 years becoming 10? More time now is great, but what if you're worrying about money constantly? etc
There's a ton of decisions that go into big life decisions. Time with family, even if family is everything in your view, is not the only input. Time is meaningless without context.
[+] [-] crunchlibrarian|7 years ago|reply
We need to move beyond this old fashioned idea of shareholder primacy, there are more important things to consider than just clawing at an equity stake and optimizing to increase the value of that stake at the expense of everything else.
[+] [-] jgh|7 years ago|reply
Edit: www works, https://thefamily.co doesn't...but the link in the post points to the second one.
[+] [-] megamindbrian2|7 years ago|reply