So she did what every HN thread on the matter says, with good reason : focus on your actual job and salary, not on equity that may or may not have some value some day.
Dont get me wrong it appears the reason she ended up with none is not ok, but would that thread have been made if wework had ended up being one of those "failed" startup and those equities never gain any value?
Would she have preferred to get equity but a lower salary (either at that moment, or on further yearly negotiation) if wework had ultimately failed? Or if like here she left long before she could use it?
Don't think about what could have been with such things, equity as a lowly employee at a tech startup is very much like playing the lottery. If you're not directly invested in it such prefer the hard cash of your salary and don't let survivor bias make you regret that one time things could have been.
At the end of the day, the startup world is about creating opportunity where there was none before. It gets nasty, and even nastier when you realize the only personal recourse you will ever have for being in that world and not getting the opportunity despite doing the work is to go make your own opportunity, with even more work.
If it's crushing your soul to be there, then you really don't belong. That's the long and the short of it.
I personally look at the world of business as a necessary evil, that what makes business evil makes startups especially evil. But no less necessary because of it.
I don't think any attempts to make startups less evil will do anything but just make it more evil. The attempts will fool people into believing that evil has been conquered, when it's just been painted over with lip service.
HN threads focus on equity/salary tradeoffs, particularly for people joining a startup. This situation - where nobody was getting a salary 'cut' or negotiating a split, but where a startup was issuing equity to existing employees, is not what HN discusses, and her decision was not the same. Heck, her decision wasn't really a decision because a crummy company made it for her.
If you are joining a startup, you should be there to get equity. This is the main financial reason to join a startup. If you prefer cash, join a established company.
I think if the options are clear and up front, with the "exchange rate" between equity and salary laid out, what you said holds true. I think the tweeter is generally dissatisfied with how little transparency there was.
I think there’s a genuine problem with the way that compensation has evolved though. This is in the 2nd or 3rd thread tweet, she says perfectly upfront that she was 23 and had no idea. That is far from unique, I talk to all kinds of people commonly who have the same tales of their early career. And I don’t think it’s particularly healthy to have complex compensation structures where workers are unprepared to actually make intentional informed decisions. That is ripe for abuse and deserves some sunshine.
It's very common for young people to not understand financial matters like options grants. That doesn't mean it's okay to benefit from their ignorance, especially as the company is now making a large number of people very wealthy.
IMO it's a matter of doing the decent thing over the legal thing. Certainly if I was making a zillion bucks like the boss of WeWork I would find a way to pay the early employees who missed out.
I think it's common for young people to not understand: your employer is not on your side.
You are making a legal contract which your employer is trying to extract a maximum amount of profit from, while passing on risk, and has more experience and understanding of how to negotiate to that effect.
> That doesn't mean it's okay to benefit from their ignorance
Seems to me that a startup offering real pay is not taking advantage of anyone.
The shady way of doing things is to say "Hey, I'll offer you these options instead of real pay, and they will be worth X in a few years time". Then during work: "Hey, can you work a bit more, it's your money on the line too". That is how you take advantage of people.
You cannot be angry not winning the lottery when you didn't pay for the ticket.
> It's very common for young people to not understand financial matters like options grants. That doesn't mean it's okay to benefit from their ignorance, especially as the company is now making a large number of people very wealthy.
You have it backwards. If the person doesn't understand financial matters like options, a company could exploit that by offering them these complicated products in lieu of cash.
> It's very common for young people to not understand financial matters like options grants
Do you have any recommendations for learning more about that?
I recently started working full-time at a tech company and I feel like I also have too little understanding of those things.
> It's very common for young people to not understand financial matters like options grants. That doesn't mean it's okay to benefit from their ignorance,
Is that one reason for a sketchy company to prefer to hire new grads?
Someone please explain this to me: You apply for a job, you accept the job, and you work to perform your duties as is expected of you. Options are a perk that some companies offer. How is it acceptable in any way to believe you are owed something more than what was agreed upon? Personally I’m getting really tired of reading stuff like this where people see what others have and immediately feel they are owed the same or more.
I think it's the contrast between what she got vs what others got. The initial terms of employment don't have anything to do with it.
At some point wework decides to grant options to some of their 120 employees -- basically a form of bonus. From her perspective, she's been working just as hard, productively and creatively as many other people who were granted the bonus, and had been there longer than most.
The terms of the initial employment offer aren't really relevant since it sounds like various other people who weren't guaranteed options nevertheless received them (people couldn't have been guaranteed options under a plan that didn't exist when they hired).
I did not read the article (WeWork is a joke of an overhyped company in most respects anyway, not sure why anyone bought into it to begin with) but it really depends does it not? You apply and accept but if you, for instance, find out later your colleagues get more for the same work or you take risks (coming from the EU, being able to lose your job at any moment is such a risk), that should be compensated with money or, if you like that kind of thing, options.
If she accepted and it is still a competitive salary for the position then you are right. But if that changed or somehow there is risk that is compensated at other corps (in options or money) then it would be a valid complaint.
You seem to imply in this case it is just whining or FOMO or something while being compensated properly. I think there are kind of cases worth reading about where it is actually simply unfair.
The way I read it - she was being not-so-subtly hinted to search for another job.
No way in hell the management wouldn't realize how refusing a 4-year old employee any options would look on her end. Zero is zero. It's like leaving a 1c tip at a restaurant. So this was most certainly done on purpose.
Or more likely management didn’t care whether she looked for new employment.
I’ve been through three of four of these situations and every time there is a list of positions that management deems important enough to grant options. It was always clear how not being on that list is perceived and that people might quit and some consideration was made to not risk losing some they considered important enough.
I bet it wasn’t the author’s title but the author. The COO knew who she was and didn’t think she was important enough to grant options. Saying it was because she had the wrong title seems like a coward move.
I never felt good being on or off the list or making the list. I think it’s better to award some amount to all early staff. One of the myths and legends of tech that I loved hearing as a kid was the Microsoft secretary who is not a millionaire.
Options grants like this describe the character of a company. I don’t think it’s impossible to work in an org like this, but it should be a factor in choosing to stay or choosing to join.
She wrote in the thread that people received 1000, 2000 shares. They are trading at about 35$ now. Who knows, they could skyrocket a few years from now and be worth millions, but at the moment they are worth a good amount of money but not a life changing one. Nothing to be sad about.
I worked for a startup many years ago (so they called themselves but being a phone operator before virtual ones they had to start big, 2k people and more.) They offered me options but I asked for more salary and less options. It turned to be the right decision because they got close to the IPO but never really did it.
Are you entitled to equity in a startup for being there early on? How is being "naive" and accepting a contract an argument for being mistreated? Am I being too skeptical?
Her personal story aside, which I can imagine must feel a bit bitter, I am of the opinion that equity should only ever be given to employees who have a crucial and direct impact on the success of a business. If I join as a COO into an early startup then I take risks, play a crucial role in it's evolution and therefore deserve some equity to incentivise the best performance I can do. However, if I'm an account, even if I'm employee no 2 I would never expect equity. Doing accounts is not crucial and has nothing to do with the actual startup itself. If they pay a normal salary for an accountant then any accountant could just take that job and replace me. Why should the business owners who must have taken huge risks themselves ever give a piece of their hard earned cake to an accountant? Doesn't make sense, they get a fair salary for their work and that is all they deserve.
So there's always two sides to everything. Not everyone always deserves what others have. That's a common misconception today where everyone looks for reasons to claim how they've been treated unfairly.
EDIT:
Before more people jump at my throat, I want to clarify that I am not talking about not compensating employees well because of a stupid reason like they can get replaced or something. That's not at all what I'm saying and I thought that was pretty clear. EVERYONE should get a great salary and great work/life perks, BUT when it comes specifically to giving away OWNERSHIP of one's business, then IMHO just being a great employee is not reason enough. I just don't think that everyone should own some % of a company just for rocking up every day and being nice to their colleagues. That's all.. if you disagree with that, then fair enough, but then say that, and don't try to teach me that people should get compensated well, because I never said otherwise.
This comment is so horribly wrong that it's hard to know where to start.
1. "Doing accounts is not crucial". Um, yes it is. Doing accounts is very, very important. They are a way of understanding the truth of your business, keeping your cash under control, satisfying legal obligations.
2. "If they pay a normal salary for an accountant then any accountant could just take that job and replace me". People are not interchangeable. A good accountant (one who is competent at their job) is your table stakes, after that you have to consider how well that person works with others and how they contribute to the culture of the company. A start up is not about the visionaries or engineers it's about an entire team that makes a company grow and work well together. Viewing an accountant is not contributing to the company culture is not just plain dumb.
3. Also, accounting is way more than just filling in a spreadsheet. When you look at the effect of AR and AP on the business you quickly realize that this stuff matters.
4. Everyone in a startup could go somewhere else. And everyone is taking some level of risk (e.g. they could have gone to a more stable company that provided better long term job prospects). Everyone deserves to participate in the risk/reward.
So, reward people that you want to stick around at the company. Give everyone some equity, given everyone some upside. A business owner who sees someone like an accountant as a drone doing a job for pay is missing out on the larger picture of building a healthy company for the staff and getting the best from that person.
A startup is a huge risk regardless, so if I take a job at at a startup I want to be compensated for the risk. Even if I’m cleaning it fetching coffee. That doesn’t have to be equity but pay needs to be better than if I took the same job at the megacorp across the street, because the risk of suddenly being without a job when the company goes bankrupt is much smaller.
Work of almost all employees is “crucial” and “has to do with the actual startup itself” at an early stage. My experience with companies that don’t realise this is that they rapidly deteriorate because of a poor perception of value within the business.
Setting that aside, all employees at a startup take additional risk. Startup work is frequently harder, more complex, more time- and life- consuming than BigCo work, and runs a higher risk of suddenly coming to a stop when funding runs out.
If I am going to come and work for your startup, I will need one of a couple of things:
- The same pay and conditions I will get at a more established employer, including the expectation of value added, or
- A higher salary to compensate for the additional work and risk of a startup, or
- Equity to compensate for your inability to pay a higher salary, or
- In a very rare case, the fact that you are working in a particular field, area, or cause, for which I’m willing to accept lower rewards in order to participate.
Employment should as much as possible be a transactional process. Offer money in exchange for work and risk; if you can’t offer money, offer something else to compensate. Equity is a reasonable tool for cash-strapped startups.
Interesting view. Would you see engineers similar to accountants? Aren't they just as replaceable, not providing much value besides implementing ideas and specifications? Its just the founder that matters if I understood your comment correctly.
I think a startup is so much more then you are trying to make it to be.
The fundamental power dynamic of equity is always difficult for employees. Non C-level employees practically never have the negotiating power to demand equity. However, I've seen several occasions where founders have constantly promised their staff equity (whilst underpaying them) and never followed through. Dangling equity is a great tool for dick head founders.
If its true that everyone else at the company got options but her thats pretty upsetting. If she was reporting directly to the COO and they had a good working relationship then that person should have fought for an exercise grant or eliminated the position.
I fail to see her point. There’s always lack of transparency in equity allocation. If there exist a startup with a transparent cap table, that’s surely exceptional.
Equity is like a superpower in negotiation with employees. Because it is zero sum among them, it neutralizes collective bargaining—the most effective form of negotiation they have.
So it’s not as black and white as, she should have done this or that differently, or someone should have made this or that disclosure or even helped her out. Equity is pretty magical in how it makes people misbehave and turn on each other.
And feeling mad that she got a raw deal is the right emotion here.
For what it's worth for her peace-of-mind, I really doubt they would have given her options if she had made a push.
Essentially, the decision had already been made. It's not impossible that they could have been convinced to change their minds, but it would have required some new or unexpected leverage to make it happen. (They would have already factored in that she could have become disgruntled or quit.)
Well, pessimistically it might not matter much either way. The employees with stock currently will likely be subject to a six month lock-up period after the IPO date. And it’s quite likely that the house of cards that is WeWork won’t survive that much scrutiny as a public company, and the price might be so low by the time anyone below the executive level can sell.
Add to that dilution when owners can print more shares for investors and different types of shares (aka preferreds) when a common employee often gets nothing because all the money go to preferreds.
I understand this person is upset and likely bitter, but claiming that she remained "naive" about options after 4 years in a startup, when they started granting them (tweet #15), looks rather odd to me. There's gotta be more to the story than written.
I think she does come off as entitled. I also think she has every right to feel that way. #17 is really early. I'd go so far as to say she deserved it.
It feels like ops people are generally under-appreciated in tech.
[+] [-] nolok|6 years ago|reply
Dont get me wrong it appears the reason she ended up with none is not ok, but would that thread have been made if wework had ended up being one of those "failed" startup and those equities never gain any value?
Would she have preferred to get equity but a lower salary (either at that moment, or on further yearly negotiation) if wework had ultimately failed? Or if like here she left long before she could use it?
Don't think about what could have been with such things, equity as a lowly employee at a tech startup is very much like playing the lottery. If you're not directly invested in it such prefer the hard cash of your salary and don't let survivor bias make you regret that one time things could have been.
[+] [-] vinceguidry|6 years ago|reply
If it's crushing your soul to be there, then you really don't belong. That's the long and the short of it.
I personally look at the world of business as a necessary evil, that what makes business evil makes startups especially evil. But no less necessary because of it.
I don't think any attempts to make startups less evil will do anything but just make it more evil. The attempts will fool people into believing that evil has been conquered, when it's just been painted over with lip service.
[+] [-] tmcw|6 years ago|reply
[+] [-] psadri|6 years ago|reply
[+] [-] sooheon|6 years ago|reply
[+] [-] awinder|6 years ago|reply
[+] [-] lordnacho|6 years ago|reply
IMO it's a matter of doing the decent thing over the legal thing. Certainly if I was making a zillion bucks like the boss of WeWork I would find a way to pay the early employees who missed out.
[+] [-] learnstats2|6 years ago|reply
You are making a legal contract which your employer is trying to extract a maximum amount of profit from, while passing on risk, and has more experience and understanding of how to negotiate to that effect.
[+] [-] koonsolo|6 years ago|reply
Seems to me that a startup offering real pay is not taking advantage of anyone.
The shady way of doing things is to say "Hey, I'll offer you these options instead of real pay, and they will be worth X in a few years time". Then during work: "Hey, can you work a bit more, it's your money on the line too". That is how you take advantage of people.
You cannot be angry not winning the lottery when you didn't pay for the ticket.
[+] [-] bko|6 years ago|reply
You have it backwards. If the person doesn't understand financial matters like options, a company could exploit that by offering them these complicated products in lieu of cash.
[+] [-] em12a8|6 years ago|reply
Do you have any recommendations for learning more about that? I recently started working full-time at a tech company and I feel like I also have too little understanding of those things.
[+] [-] neilv|6 years ago|reply
Is that one reason for a sketchy company to prefer to hire new grads?
[+] [-] codeddesign|6 years ago|reply
[+] [-] jmull|6 years ago|reply
At some point wework decides to grant options to some of their 120 employees -- basically a form of bonus. From her perspective, she's been working just as hard, productively and creatively as many other people who were granted the bonus, and had been there longer than most.
The terms of the initial employment offer aren't really relevant since it sounds like various other people who weren't guaranteed options nevertheless received them (people couldn't have been guaranteed options under a plan that didn't exist when they hired).
[+] [-] tluyben2|6 years ago|reply
If she accepted and it is still a competitive salary for the position then you are right. But if that changed or somehow there is risk that is compensated at other corps (in options or money) then it would be a valid complaint.
You seem to imply in this case it is just whining or FOMO or something while being compensated properly. I think there are kind of cases worth reading about where it is actually simply unfair.
[+] [-] huhtenberg|6 years ago|reply
No way in hell the management wouldn't realize how refusing a 4-year old employee any options would look on her end. Zero is zero. It's like leaving a 1c tip at a restaurant. So this was most certainly done on purpose.
[+] [-] prepend|6 years ago|reply
I’ve been through three of four of these situations and every time there is a list of positions that management deems important enough to grant options. It was always clear how not being on that list is perceived and that people might quit and some consideration was made to not risk losing some they considered important enough.
I bet it wasn’t the author’s title but the author. The COO knew who she was and didn’t think she was important enough to grant options. Saying it was because she had the wrong title seems like a coward move.
I never felt good being on or off the list or making the list. I think it’s better to award some amount to all early staff. One of the myths and legends of tech that I loved hearing as a kid was the Microsoft secretary who is not a millionaire.
Options grants like this describe the character of a company. I don’t think it’s impossible to work in an org like this, but it should be a factor in choosing to stay or choosing to join.
[+] [-] np_tedious|6 years ago|reply
2010 - WeWork is founded
2011 (Nov) - author joins
2013 ("mid") - has equity discussion
2013 (Oct) - author leaves
She was an employee of slightly under 2 years, and it seems she did leave shortly after this equity related convo with her boss.
[+] [-] the_gipsy|6 years ago|reply
[+] [-] pmontra|6 years ago|reply
I worked for a startup many years ago (so they called themselves but being a phone operator before virtual ones they had to start big, 2k people and more.) They offered me options but I asked for more salary and less options. It turned to be the right decision because they got close to the IPO but never really did it.
[+] [-] mclightning|6 years ago|reply
[+] [-] dustinmoris|6 years ago|reply
So there's always two sides to everything. Not everyone always deserves what others have. That's a common misconception today where everyone looks for reasons to claim how they've been treated unfairly.
EDIT:
Before more people jump at my throat, I want to clarify that I am not talking about not compensating employees well because of a stupid reason like they can get replaced or something. That's not at all what I'm saying and I thought that was pretty clear. EVERYONE should get a great salary and great work/life perks, BUT when it comes specifically to giving away OWNERSHIP of one's business, then IMHO just being a great employee is not reason enough. I just don't think that everyone should own some % of a company just for rocking up every day and being nice to their colleagues. That's all.. if you disagree with that, then fair enough, but then say that, and don't try to teach me that people should get compensated well, because I never said otherwise.
[+] [-] jgrahamc|6 years ago|reply
1. "Doing accounts is not crucial". Um, yes it is. Doing accounts is very, very important. They are a way of understanding the truth of your business, keeping your cash under control, satisfying legal obligations.
2. "If they pay a normal salary for an accountant then any accountant could just take that job and replace me". People are not interchangeable. A good accountant (one who is competent at their job) is your table stakes, after that you have to consider how well that person works with others and how they contribute to the culture of the company. A start up is not about the visionaries or engineers it's about an entire team that makes a company grow and work well together. Viewing an accountant is not contributing to the company culture is not just plain dumb.
3. Also, accounting is way more than just filling in a spreadsheet. When you look at the effect of AR and AP on the business you quickly realize that this stuff matters.
4. Everyone in a startup could go somewhere else. And everyone is taking some level of risk (e.g. they could have gone to a more stable company that provided better long term job prospects). Everyone deserves to participate in the risk/reward.
So, reward people that you want to stick around at the company. Give everyone some equity, given everyone some upside. A business owner who sees someone like an accountant as a drone doing a job for pay is missing out on the larger picture of building a healthy company for the staff and getting the best from that person.
[+] [-] alkonaut|6 years ago|reply
[+] [-] matthewmacleod|6 years ago|reply
Work of almost all employees is “crucial” and “has to do with the actual startup itself” at an early stage. My experience with companies that don’t realise this is that they rapidly deteriorate because of a poor perception of value within the business.
Setting that aside, all employees at a startup take additional risk. Startup work is frequently harder, more complex, more time- and life- consuming than BigCo work, and runs a higher risk of suddenly coming to a stop when funding runs out.
If I am going to come and work for your startup, I will need one of a couple of things:
- The same pay and conditions I will get at a more established employer, including the expectation of value added, or
- A higher salary to compensate for the additional work and risk of a startup, or
- Equity to compensate for your inability to pay a higher salary, or
- In a very rare case, the fact that you are working in a particular field, area, or cause, for which I’m willing to accept lower rewards in order to participate.
Employment should as much as possible be a transactional process. Offer money in exchange for work and risk; if you can’t offer money, offer something else to compensate. Equity is a reasonable tool for cash-strapped startups.
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] kerng|6 years ago|reply
I think a startup is so much more then you are trying to make it to be.
[+] [-] Traster|6 years ago|reply
[+] [-] thinkingkong|6 years ago|reply
[+] [-] avip|6 years ago|reply
[+] [-] doctorpangloss|6 years ago|reply
So it’s not as black and white as, she should have done this or that differently, or someone should have made this or that disclosure or even helped her out. Equity is pretty magical in how it makes people misbehave and turn on each other.
And feeling mad that she got a raw deal is the right emotion here.
[+] [-] jmull|6 years ago|reply
For what it's worth for her peace-of-mind, I really doubt they would have given her options if she had made a push.
Essentially, the decision had already been made. It's not impossible that they could have been convinced to change their minds, but it would have required some new or unexpected leverage to make it happen. (They would have already factored in that she could have become disgruntled or quit.)
It certainly doesn't seem fair, though.
[+] [-] nextstep|6 years ago|reply
[+] [-] bro45|6 years ago|reply
[+] [-] bobongo|6 years ago|reply
[+] [-] eps|6 years ago|reply
[+] [-] Proven|6 years ago|reply
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[+] [-] xenihn|6 years ago|reply
I think she does come off as entitled. I also think she has every right to feel that way. #17 is really early. I'd go so far as to say she deserved it.
It feels like ops people are generally under-appreciated in tech.