4 ms·

I'm a former employee and now a founder. As an employee I always had a paycheck and could easily leave any time I wanted. As a founder, I spent a year with no s

I'm a former employee and now a founder. As an employee I always had a paycheck and could easily leave any time I wanted. As a founder, I spent a year with no salary, paying for servers out of pocket, and stuck with the company because we had paying customers who depend on us. As an employee, I risked maybe $10k of salary vs working elsewhere. As a founder I risked ALL OF IT. I'm making a much bigger risk as a founder than as an employee, so yeah, I expect much bigger rewards. I thought my equity and salary were fair as an employee and I think they're fair now as a founder.

sulam 11y ago
A founder who does everything you describe should own a substantial chunk of what they've built. They de-risked the business on their own dime. Many (most?) startups these days however are funded by an angel or early stage fund and the founder has very little risk. A failure for them means a cush stint as an EIR for their VC earning $120K/yr to look at companies while they decide what to do next. I hope _that_ company is giving substantial equity to early employees, because the risk is much more evenly distributed.
- AstroChimpHam 11y ago
  No idea where you got that many-most figure. I hang out with a lot of founders. Don't know any except for repeat founders who get founded pre-product. Not saying it doesn't happen, but it's rare, and finding that Angel to fund you that early is not easy.
  - sulam 11y ago
    We may indeed travel in different circles. Every startup my co-workers have started had cash in the bank before they had product. This may be the Mafia effect -- post IPO we are all at least looking for things to invest in on the side, if not start something ourselves.
Bahamut 11y ago
Employees sometimes take big risks too - I have (naively) given up over $100k/year opportunities on top of salary working at startups, including 60-80 hour work weeks for a year in the trenches coding, and have had nothing to show for it, also being offered a pittance of 0.225% of stock (or similar at other startups). In my case, I probably have given up $200k-250k/year in opportunities in the past 1 1/2 years working at startups, although the past half year was by choice by turning down some high offers for a role that more aligned with my current lifestyle. Now I know better as a software engineer to avoid immature companies like the plague unless they're willing to pay very close to market value. That stock is worth zilch with the way the VC investment game is typically played currently, and founders are fully willing to abuse the naive assumption by those in the trenches that employees will come to riches by working hard and overcoming bad executive/management decisions to save the day. Founders need to be more honest about employee compensation and more willing to compensate more in line with the market if they want true talent. A $160k-180k offer (or typically less at many cheap startups - a YC company tried to go low with a $120k offer in SF within the past year) with uncertain value of stock doesn't really compare favorably to $250k base + performance bonuses + stock options at a Google or Facebook (or $375k cash/immediately vested stock from Netflix, or in one case I turned down, $170k base + various bonuses for typically $350k-400k compensation). The terms are very unfavorable to employees currently, especially the highly skilled ones, who are also more likely to be savvy.
- douche 11y ago
  These numbers that are being thrown around are mind-boggling. I still haven't shifted my thinking out of blue-collar, northern Appalachia mode, where $20/hour for back-breaking skilled labor is considered a really good career. Cost of living must be completely astronomical, or people have really expensive tastes. That kind of salary would be enough, after taxes, for me to work five years, buy a home, cash on the barrelhead, invest the rest, and retire to live off the dividends the rest of my life.
  - phamilton 11y ago
    To support a family of 5, you're looking at $4000/month in housing (PITI on 750k townhouse, 3Bed 2.5Bath, 1500 sqft, 40 minutes from the city). For that to make sense, your take home should ideally over $150k, and that's a bare minimum.

sulam 11y ago

A founder who does everything you describe should own a substantial chunk of what they've built. They de-risked the business on their own dime. Many (most?) startups these days however are funded by an angel or early stage fund and the founder has very little risk. A failure for them means a cush stint as an EIR for their VC earning $120K/yr to look at companies while they decide what to do next. I hope _that_ company is giving substantial equity to early employees, because the risk is much more evenly distributed.

AstroChimpHam 11y ago
No idea where you got that many-most figure. I hang out with a lot of founders. Don't know any except for repeat founders who get founded pre-product. Not saying it doesn't happen, but it's rare, and finding that Angel to fund you that early is not easy.
- sulam 11y ago
  We may indeed travel in different circles. Every startup my co-workers have started had cash in the bank before they had product. This may be the Mafia effect -- post IPO we are all at least looking for things to invest in on the side, if not start something ourselves.

Bahamut 11y ago

Employees sometimes take big risks too - I have (naively) given up over $100k/year opportunities on top of salary working at startups, including 60-80 hour work weeks for a year in the trenches coding, and have had nothing to show for it, also being offered a pittance of 0.225% of stock (or similar at other startups). In my case, I probably have given up $200k-250k/year in opportunities in the past 1 1/2 years working at startups, although the past half year was by choice by turning down some high offers for a role that more aligned with my current lifestyle. Now I know better as a software engineer to avoid immature companies like the plague unless they're willing to pay very close to market value. That stock is worth zilch with the way the VC investment game is typically played currently, and founders are fully willing to abuse the naive assumption by those in the trenches that employees will come to riches by working hard and overcoming bad executive/management decisions to save the day. Founders need to be more honest about employee compensation and more willing to compensate more in line with the market if they want true talent. A $160k-180k offer (or typically less at many cheap startups - a YC company tried to go low with a $120k offer in SF within the past year) with uncertain value of stock doesn't really compare favorably to $250k base + performance bonuses + stock options at a Google or Facebook (or $375k cash/immediately vested stock from Netflix, or in one case I turned down, $170k base + various bonuses for typically $350k-400k compensation). The terms are very unfavorable to employees currently, especially the highly skilled ones, who are also more likely to be savvy.

douche 11y ago
These numbers that are being thrown around are mind-boggling. I still haven't shifted my thinking out of blue-collar, northern Appalachia mode, where $20/hour for back-breaking skilled labor is considered a really good career. Cost of living must be completely astronomical, or people have really expensive tastes. That kind of salary would be enough, after taxes, for me to work five years, buy a home, cash on the barrelhead, invest the rest, and retire to live off the dividends the rest of my life.
- phamilton 11y ago
  To support a family of 5, you're looking at $4000/month in housing (PITI on 750k townhouse, 3Bed 2.5Bath, 1500 sqft, 40 minutes from the city). For that to make sense, your take home should ideally over $150k, and that's a bare minimum.