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If employees don't like what they're being offered, they should vote with their feet.

by gyardley 17y ago

lallysingh 17y ago
They do, by never talking to startups. Startups suffer without every knowing any better.
- gyardley 17y ago
  Maybe some do, but option grants, like salaries, are subject to supply and demand. The prevailing amounts are what they are because startups can successfully acquire talent at them.
  - JoeAltmaier 17y ago
    Have you tried lately? You can get any number of chumps willing to gamble. How about the really good ones?
    - sokoloff 17y ago
      To me that just means that there's a market rate for equity grants for chumps and a different (higher) market rate for "the really good ones".
  - nostrademons 17y ago
    Given the failure rate of most startups, and the general importance of hiring the right people (it was the #1 piece of advice that John Doerr gave to the Google founders), I'm not sure "successfully" is the right word. A lot of people are viewing the argument in moral terms. I wonder if it was meant as an economic argument: if you give your employees a chance at a big payout if you succeed, perhaps you'll have a better chance at succeeding.
_delirium 17y ago
I think this article is partly arguing that employees should do exactly that, although it's nominally pitched at founders and CEOs. I read it as saying that early employees will not get rich under current compensation packages if the firm is acquired for $50m (the most likely exit), and if they think they will, they're deluding themselves. I think if it were widely known that early employees at startups that get bought do not make particularly significant amounts of money from the exit, it would decrease the number of people willing to work for startups, or at least, they would demand more up-front salary. A lot of people currently think the opposite is true--- based on the example of the rich early Google employees and such, they have a misunderstanding that early employees of a successful startup typically get significant payouts, while that's actually only true for massive IPOs, not for most exits.

If employees don't like what they're being offered, they should vote with their feet.

lallysingh 17y ago

They do, by never talking to startups. Startups suffer without every knowing any better.

gyardley 17y ago
Maybe some do, but option grants, like salaries, are subject to supply and demand. The prevailing amounts are what they are because startups can successfully acquire talent at them.
- JoeAltmaier 17y ago
  Have you tried lately? You can get any number of chumps willing to gamble. How about the really good ones?
  - sokoloff 17y ago
    To me that just means that there's a market rate for equity grants for chumps and a different (higher) market rate for "the really good ones".
- nostrademons 17y ago
  Given the failure rate of most startups, and the general importance of hiring the right people (it was the #1 piece of advice that John Doerr gave to the Google founders), I'm not sure "successfully" is the right word. A lot of people are viewing the argument in moral terms. I wonder if it was meant as an economic argument: if you give your employees a chance at a big payout if you succeed, perhaps you'll have a better chance at succeeding.

_delirium 17y ago

I think this article is partly arguing that employees should do exactly that, although it's nominally pitched at founders and CEOs. I read it as saying that early employees will not get rich under current compensation packages if the firm is acquired for $50m (the most likely exit), and if they think they will, they're deluding themselves. I think if it were widely known that early employees at startups that get bought do not make particularly significant amounts of money from the exit, it would decrease the number of people willing to work for startups, or at least, they would demand more up-front salary. A lot of people currently think the opposite is true--- based on the example of the rich early Google employees and such, they have a misunderstanding that early employees of a successful startup typically get significant payouts, while that's actually only true for massive IPOs, not for most exits.