Those are the companies that were actually accepted to Y-Combinator. The Y-Combintor acceptance rate is said to be 3%. So, your odds of success are now more like 3% 7% = 0.2%*
All of this hinges on the assumption:
Y-combinator is a proxy for the start-up population.
Even taking the optimistic Y-Combinator outcome, would you be willing to accept a 7% chance of making $400K?
This is assuming you only get paid in that 1% equity while assuming the 40MM exit. If I got paid a SALARY I can accept + 1%, why wouldn't I take that chance? It is +EV. Compare this to the lottery, which carries a -EV.
I like the general tone of this piece, but how many salaries are below market rate at a startup these days? The fringe benefits are pretty insane right now too.
IMO, the biggest concern for an employee is dilution. Sometimes this happens in non-obvious ways, like on exit what happens to undistributed shares allocated to the employee grant pool?
[+] [-] abbazabba|12 years ago|reply
All of this hinges on the assumption:
Y-combinator is a proxy for the start-up population.
Even taking the optimistic Y-Combinator outcome, would you be willing to accept a 7% chance of making $400K?
This is assuming you only get paid in that 1% equity while assuming the 40MM exit. If I got paid a SALARY I can accept + 1%, why wouldn't I take that chance? It is +EV. Compare this to the lottery, which carries a -EV.
[+] [-] gazarsgo|12 years ago|reply
[+] [-] gazarsgo|12 years ago|reply
IMO, the biggest concern for an employee is dilution. Sometimes this happens in non-obvious ways, like on exit what happens to undistributed shares allocated to the employee grant pool?