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Not a bad idea about charging more and then just angel investing. Although then you have to be a competitive angel investor in order to get into the best deals,

Not a bad idea about charging more and then just angel investing. Although then you have to be a competitive angel investor in order to get into the best deals, essentially taking on a new angel investor job in addition to consulting. Have you successfully got stock as part of your consulting compensation and if so, why do you think you succeeded even though it's a really tough sell? For the $50k angel investment, I'm guessing that you mean because its preferred stock with no vesting?

patio11 11y ago
Never asked for stock from clients; very happy with that decision. I wrote up the reasons for angel stock being better than employee stock on Twitter and, as I am on a phone right now, cannot conveniently paste it. Can someone please link that conversation here?
- tvmalsv 11y ago
  Here it is: https://twitter.com/patio11/status/660953729940635648 https://twitter.com/patio11/status/660953729940635648
- anonconsulter 11y ago
  According to http://www.kalzumeus.com/2015/05/01/talking-about-money/ http://www.kalzumeus.com/2015/05/01/talking-about-money/ you are asking for ~$30k/week when consulting. I just read some of your year-in-briefs, and it seems like the most you ever made consulting was $150k in 2012. Is that correct? How much income are you making per year consulting? Because I'd want to make much more than $150k in order for it to be worth it. The numbers I'm going through right now show that, even if I can make a lot of income consulting, if I just join the right startup I could earn stock options worth effectively more than I'd ever be able to make consulting (assuming I don't get stock consulting).
  - shoo 11y ago
    perhaps that's a reasonable analysis, but you are working from the assumption that you're able to "just join the right startup". i doubt that it is realistic to think that you have much control over it turning out to be "right" or not. if you are able to earn $150k / year from consulting in a relatively small fraction of your time (incl. the overhead of networking, etc), that frees you up to use the remainder of your time on other activities, perhaps profitable or something else you value. some ideas: start your own startup, start your own small business, focus your energy on building a diversified investment portfolio, buy and renovate a house to sell, plan and run a series of workshops, start your own hobby farm, spend more time with people whose company you enjoy.
  - tptacek 11y ago
    Most people who make more than 150k annually consulting do it by managing a team of consultants. An important reason we're always telling people to raise their rates is that --- unless your rates are way too low --- a sole practitioner can almost never extrapolate their rate to figure out what their annual take-home will be.
    - JoeAltmaier 11y ago
      I'm not so sure. Not this guy anyway. Our partnership makes quite a bit more than that, and its just us chickens doing the work. And we stay as busy as we care to. Caveat: we each have decades of expertise in our field.
      - tptacek 11y ago
        Well, let's just say that I speak for my own 10+ years co-running Matasano, plus Patrick (my current cofounder), plus everyone I know personally who has run a contracting firm, including a few besides Patrick that also had nosebleed rates. Generally, unless you have a team, if you're finding that you can multiply your hourly rate by 2000 and get within shouting distance of your annual gross, that means you're not charging enough. There are a lot of good things that come from jacking your rates up, beyond just being able to make the same amount of money while doing far less work.
        JoeAltmaier 11y ago
        I must be running a public service then. We find it easy to stay 100% busy, and 2000 X rate is well north of the number this thread started with. No need to up the rate; maybe the market would support it. Working less sounds attractive though!
        tptacek 11y ago
        If you back out your hourly rate, is it within $100 of an effective hourly rate you think you could get (maybe with some hustling) as a full time engineer somewhere?
- barry-cotter 11y ago
  First example: vesting. The thing represented to the employee as "ownership" is actually "ownership contingent on you being here in 4 years"

patio11 11y ago

Never asked for stock from clients; very happy with that decision. I wrote up the reasons for angel stock being better than employee stock on Twitter and, as I am on a phone right now, cannot conveniently paste it. Can someone please link that conversation here?

tvmalsv 11y ago
Here it is: https://twitter.com/patio11/status/660953729940635648 https://twitter.com/patio11/status/660953729940635648
anonconsulter 11y ago
According to http://www.kalzumeus.com/2015/05/01/talking-about-money/ http://www.kalzumeus.com/2015/05/01/talking-about-money/ you are asking for ~$30k/week when consulting. I just read some of your year-in-briefs, and it seems like the most you ever made consulting was $150k in 2012. Is that correct? How much income are you making per year consulting? Because I'd want to make much more than $150k in order for it to be worth it. The numbers I'm going through right now show that, even if I can make a lot of income consulting, if I just join the right startup I could earn stock options worth effectively more than I'd ever be able to make consulting (assuming I don't get stock consulting).
- shoo 11y ago
  perhaps that's a reasonable analysis, but you are working from the assumption that you're able to "just join the right startup". i doubt that it is realistic to think that you have much control over it turning out to be "right" or not. if you are able to earn $150k / year from consulting in a relatively small fraction of your time (incl. the overhead of networking, etc), that frees you up to use the remainder of your time on other activities, perhaps profitable or something else you value. some ideas: start your own startup, start your own small business, focus your energy on building a diversified investment portfolio, buy and renovate a house to sell, plan and run a series of workshops, start your own hobby farm, spend more time with people whose company you enjoy.
- tptacek 11y ago
  Most people who make more than 150k annually consulting do it by managing a team of consultants. An important reason we're always telling people to raise their rates is that --- unless your rates are way too low --- a sole practitioner can almost never extrapolate their rate to figure out what their annual take-home will be.
  - JoeAltmaier 11y ago
    I'm not so sure. Not this guy anyway. Our partnership makes quite a bit more than that, and its just us chickens doing the work. And we stay as busy as we care to. Caveat: we each have decades of expertise in our field.
    - tptacek 11y ago
      Well, let's just say that I speak for my own 10+ years co-running Matasano, plus Patrick (my current cofounder), plus everyone I know personally who has run a contracting firm, including a few besides Patrick that also had nosebleed rates. Generally, unless you have a team, if you're finding that you can multiply your hourly rate by 2000 and get within shouting distance of your annual gross, that means you're not charging enough. There are a lot of good things that come from jacking your rates up, beyond just being able to make the same amount of money while doing far less work.
      - JoeAltmaier 11y ago
        I must be running a public service then. We find it easy to stay 100% busy, and 2000 X rate is well north of the number this thread started with. No need to up the rate; maybe the market would support it. Working less sounds attractive though!
        tptacek 11y ago
        If you back out your hourly rate, is it within $100 of an effective hourly rate you think you could get (maybe with some hustling) as a full time engineer somewhere?
barry-cotter 11y ago
First example: vesting. The thing represented to the employee as "ownership" is actually "ownership contingent on you being here in 4 years"