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I don't think employee equity is broken - you just really have to pick the right startup, because most startups will have worthless equity. And all of the fixes
by lacker 11y ago
I don't think employee equity is broken - you just really have to pick the right startup, because most startups will have worthless equity. And all of the fixes promoted in blog posts like these are nice, but they pale in comparison to picking the right startup.
- marssaxman 11y agoOr you can just acknowledge the fact that it's basically a lottery and ignore equity altogether, since it never matters unless you're one of the founders, in which case it's your job to create the right startup.
- ryandrake 11y agoAfter decades in this industry, I'm convinced that this is the only rational strategy. Treat equity compensation as "close to zero value" unless it's immediately convertible to cash.
- sskates 11y agoYou make it sound so easy. Professionals at picking the right company (aka venture capitalists) get it wrong the vast majority of the time. Nobody has any guarantees about how things will end up. You really think the 90 day exercise window is fair? It means an employee who just left a company has a huge burden with their vested options- either come up with a lot of cash and take a massive risk or have your equity compensation be worth nothing.
- SeoxyS 11y agoPicking winners is easy: oftentimes they're obvious. e.g. Uber, Slack. VCs have a much harder job: picking undervalued and not-yet-obvious winners. They need to find the winner first, before everyone else also realizes it's a winner
- marssaxman 11y agoThose examples weren't obvious when they were still small enough that employee equity compensation would have meant something.
- optimusclimb 11y agoYou're misinformed about how much equity employees have been getting then (be it in RSUs or ISOs).
- marssaxman 11y agoPerhaps I am and perhaps I'm not, but it's somewhat less than helpful to say so without providing information which might correct my apparently inaccurate understanding.
- optimusclimb 11y agoIf you joined Uber a year ago, it was pretty obvious they were a rocket ship, and you'd easily be set up to make 200-300k a year with bonuses and equity. Hardly chump change, and definitely more than joining the latest YC winter __ "we're 2 stanford MBAs hiring our first engineer to change the way the world does analytics", here's $130k and .0something percent equity to come join us.
- marssaxman 11y agoIs that real equity, or is it equity on the rolling-four-years-vesting plan? Because I've only ever seen the latter offered to anyone but the first couple of employees.
- lacker 11y agoI don't think it's easy at all to pick the right company to join. I'm just saying, it matters way more than everything else.
- 100k 11y agoRestated: Pick the right startup, grit your teeth, work there for the 10+ years it takes to go public, and trust it won't steal your equity, a la Zynga. Even if you do pick the right startup, you should be able to leave to pursue other interests, keeping the equity you earned as part of your compensation. Without a longer exercise window, employees can be trapped.