9 times out of 10 the company sells, performs a reduction in force, or goes under before they vest. 1 time out of 1000 the company is worth something and remains operable over a 5 year period.
Rules of thumb for the green engineers:
- Take salary/health insurance over stock in almost all cases.
- At some companies employees who are greener and greedier will fight/sabotage all their peers to get rid of them, is this the type of place you want to be at? Insider fighting is often a big part of why these companies fail.
- Never pay into start up equity. If a company "offers you the chance to buy their stock" after X months/years don't do it and if you do, don't put much in. Have an excuse so no one gets offended like "I am saving for a house" or something. If you're looking at a 5k minimum simply don't do it unless that is peanuts for you.
- Make sure anything offered is in writing and completely understood before joining. Lots of things are said at final stage interviews. If it isn't in writing you are not getting it. Ask questions be annoying.
- Negotiate. Its the only way you can actually get what you want. If the stocks mean nothing to you unless you get them quick, negotiate that. Start ups close doors extremely suddenly every single day.
> If a company "offers you the chance to buy their stock" after X months/years don't do it
This generalizes to a rule of thumb, "Don't accept any deal you didn't go looking for." Same as a trapdoor firewall doesn't accept any incoming connections.
Someone on the street offers to sell you a bridge, say no. You get brightly-colored letters from your credit union selling you car insurance, recycle them. Your friend wants you to buy a bowling alley with him, refuse.
And if they are not worthless in general, they are worthless for you since you will get squeezed out because funders and founders need to take everything since they are the only ones who matter or do any work (/s obviously).
I certainly did. I have options/stocks from 3 different companies, all vested, but zero expectation of seeing any money out of it. One of them recently went belly up and had an exit for peanuts.
I didn't go for big tech but I did pick a job on a YC startup that, while demanding, allowed me to purchase my own house and work on my own stuff in the evenings.
Your options haven’t expired since leaving those startups?
I recently left a job at a startup where I had some options vested. It would be like 6k to exercise them. I was leaning towards leaving em, and now this thread has kinda convinced me
How did you manage to buy a house on your own while making just salary? Usually salary at YC startups doesn’t get past $250k and that’s not enough to afford anything in the bay.
nostradumbasp|1 year ago
Rules of thumb for the green engineers:
- Take salary/health insurance over stock in almost all cases.
- At some companies employees who are greener and greedier will fight/sabotage all their peers to get rid of them, is this the type of place you want to be at? Insider fighting is often a big part of why these companies fail.
- Never pay into start up equity. If a company "offers you the chance to buy their stock" after X months/years don't do it and if you do, don't put much in. Have an excuse so no one gets offended like "I am saving for a house" or something. If you're looking at a 5k minimum simply don't do it unless that is peanuts for you.
- Make sure anything offered is in writing and completely understood before joining. Lots of things are said at final stage interviews. If it isn't in writing you are not getting it. Ask questions be annoying.
- Negotiate. Its the only way you can actually get what you want. If the stocks mean nothing to you unless you get them quick, negotiate that. Start ups close doors extremely suddenly every single day.
01HNNWZ0MV43FF|1 year ago
This generalizes to a rule of thumb, "Don't accept any deal you didn't go looking for." Same as a trapdoor firewall doesn't accept any incoming connections.
Someone on the street offers to sell you a bridge, say no. You get brightly-colored letters from your credit union selling you car insurance, recycle them. Your friend wants you to buy a bowling alley with him, refuse.
It almost always works.
chamomeal|1 year ago
For instance, if I got $5,000 worth of options when the company was “worth” 1 million, is that a safe bet to buy into?
Like surely the founder would be able to sell the company for 1 million dollars instead of crashing and burning… right?
rrr_oh_man|1 year ago
Golden words to live by.
meritage31|1 year ago
Also, if the startup gives you options/stocks without showing up the cap table, they are giving you a numerator and not a denominator.
https://en.wikipedia.org/wiki/Capitalization_table
Never trade real cash for imaginary money unless you have the facts
consp|1 year ago
whstl|1 year ago
I didn't go for big tech but I did pick a job on a YC startup that, while demanding, allowed me to purchase my own house and work on my own stuff in the evenings.
chamomeal|1 year ago
I recently left a job at a startup where I had some options vested. It would be like 6k to exercise them. I was leaning towards leaving em, and now this thread has kinda convinced me
bradlys|1 year ago
schappim|1 year ago
nejsjsjsbsb|1 year ago