4 ms·

This can be applied to everything why bother making an informed decision about choice of University or Spouse or anything else. Your explanation is a self full

This can be applied to everything why bother making an informed decision about choice of University or Spouse or anything else. Your explanation is a self fullfiling prophecy disguised as if it was some wise advice. In reality employees can and should make informed decisions, this advice is equivalent of covering ears and screaming bla bla bla. Power is given to those who demand it. If you start with assumption of being treated like meek, you are simply setting yourself up for a defeat.

lmm 10y ago
If you walk into a casino you're going to lose money. I don't even know the rules of any of the games and I can tell you that. Some situations are so tilted in favour of one side or the other that it's not worth trying to compete on that playing field. Valuing the options at zero and demanding adequate salary without them is the opposite of meekness.
- aub3bhat 10y ago
  Rather than loudly proclaiming your ignorance about casions and options, you should introspect. I know several people who successfully negotiated better terms. Demanding "adequate" salary and valueing options at "zero" are two seperate tasks. You assume latter (options not valued at 0) implies former (salary not adequate) its a statement about your risk averse world view, not a statememt of fact. As far as meekness, loudly proclaiming that you are valuing options at zero is great way of letting your co workers and others know of your level of interest in the success of company. At which point if not meek you would surely come across as contemptuous, lest the company suceed and your coworkers end up better off than you.
  - throwaway729 10y ago
    > I know several people... And for every person you know there are dozens of stories about people who didn't even come close to recouping their salary differential. And those are just the "successful" startups that had some sort of exit. So the risk is (obviously) real. > its a statement about your risk averse world view, not a statememt of fact. No, it's a (true) statistical statement that you're misrepresenting as a categorical one. > loudly proclaiming that you are valuing options at zero is great way of letting your co workers and others know of your level of interest in the success of company Does the VC who's investing in a profile of N other companies also not have much interest in the success of the company? I mean, if they REALLY believed in the success of the company, then why aren't they just throwing all N at the company? The only difference between the VC and the employee is that the employee is providing a limited resource (time) that can't be split among N bets, while the VC has enough cash to afford to make risky bets. So it's entirely possible that the company has an negative expected value for an employee and also a positive expected value for the VC (and founder, but for different reasons).
    - etatoby 10y ago
      > So it's entirely possible that the company has an negative expected value for an employee and also a positive expected value for the VC Which is exactly the scenario the article is warning about: share dilution, refinancing, and all those other strange terms, often rendering the employees' options worthless over time (but not the VC's of course)
  - lmm 10y ago
    > As far as meekness, loudly proclaiming that you are valuing options at zero is great way of letting your co workers and others know of your level of interest in the success of company. At which point if not meek you would surely come across as contemptuous, lest the company suceed and your coworkers end up better off than you. You don't have to be contemptuous to be confident in your own worth and realistic about how much you can influence the company's chances. By working for a company you are already long that company; you should be looking to diversify. The people who "drink the kool-aid" and get extremely personally devoted to their company are not exactly respected, IME.
  - deleted 10y ago
    [deleted]
developer2 10y ago
The point is that the majority of regular employees are never going to get options that are worth a damn thing. When most companies are run by founders who don't even have access to priority shares because all the equity is locked up with investors, you can bet developers and even executive employees (CTO, CFO, et al) sure as hell aren't going to receive anything worth its weight in air. Yes, it's important to try and understand your stake and whatever choices may actually be available to you. It's also important to realize that you are likely part of the 99% of employees who have been handed a worthless piece of paper, which just might convert into something valuable under a very specific and extremely unlikely set of circumstances. On top of everything is the fact that not all financial advisers are equally knowledgeable or caring about their profession. Given the same documents to review, some will be overly optimistic or just plain incompetent while others will actually be able to explain just what you have lined up. How many stories of "I was advised X, so I spent money, and now I'm broke and losing my home" stories do we need to read to understand this? Your salary is your compensation, and you base all financial decisions solely on that income. You figure out your cash-out options, and when the time comes that you convert to hard cash, now you have more money. Until then, keep your dreams of a windfall with you at night under your covers. It's foolish to plan out your life expecting to yes, win the lottery.
marssaxman 10y ago
Au contraire; it's a rule of thumb distilling 20+ years of industry experiences and observations into a simple bit of advice. If I'd followed this advice throughout my career, I'd be happier and considerably wealthier today. Chasing the big stock payout has always been the wrong choice for me. You do whatever you like. If this stuff is interesting, go learn about it! There's nothing wrong with that. But all I've discovered, the more I've learned about the world of VC and options and equity compensation, is that it's a rich man's game and I've been wasting my time trying to play.

lmm 10y ago

If you walk into a casino you're going to lose money. I don't even know the rules of any of the games and I can tell you that. Some situations are so tilted in favour of one side or the other that it's not worth trying to compete on that playing field. Valuing the options at zero and demanding adequate salary without them is the opposite of meekness.

aub3bhat 10y ago
Rather than loudly proclaiming your ignorance about casions and options, you should introspect. I know several people who successfully negotiated better terms. Demanding "adequate" salary and valueing options at "zero" are two seperate tasks. You assume latter (options not valued at 0) implies former (salary not adequate) its a statement about your risk averse world view, not a statememt of fact. As far as meekness, loudly proclaiming that you are valuing options at zero is great way of letting your co workers and others know of your level of interest in the success of company. At which point if not meek you would surely come across as contemptuous, lest the company suceed and your coworkers end up better off than you.
- throwaway729 10y ago
  > I know several people... And for every person you know there are dozens of stories about people who didn't even come close to recouping their salary differential. And those are just the "successful" startups that had some sort of exit. So the risk is (obviously) real. > its a statement about your risk averse world view, not a statememt of fact. No, it's a (true) statistical statement that you're misrepresenting as a categorical one. > loudly proclaiming that you are valuing options at zero is great way of letting your co workers and others know of your level of interest in the success of company Does the VC who's investing in a profile of N other companies also not have much interest in the success of the company? I mean, if they REALLY believed in the success of the company, then why aren't they just throwing all N at the company? The only difference between the VC and the employee is that the employee is providing a limited resource (time) that can't be split among N bets, while the VC has enough cash to afford to make risky bets. So it's entirely possible that the company has an negative expected value for an employee and also a positive expected value for the VC (and founder, but for different reasons).
  - etatoby 10y ago
    > So it's entirely possible that the company has an negative expected value for an employee and also a positive expected value for the VC Which is exactly the scenario the article is warning about: share dilution, refinancing, and all those other strange terms, often rendering the employees' options worthless over time (but not the VC's of course)
- lmm 10y ago
  > As far as meekness, loudly proclaiming that you are valuing options at zero is great way of letting your co workers and others know of your level of interest in the success of company. At which point if not meek you would surely come across as contemptuous, lest the company suceed and your coworkers end up better off than you. You don't have to be contemptuous to be confident in your own worth and realistic about how much you can influence the company's chances. By working for a company you are already long that company; you should be looking to diversify. The people who "drink the kool-aid" and get extremely personally devoted to their company are not exactly respected, IME.
- deleted 10y ago
  [deleted]

developer2 10y ago

The point is that the majority of regular employees are never going to get options that are worth a damn thing. When most companies are run by founders who don't even have access to priority shares because all the equity is locked up with investors, you can bet developers and even executive employees (CTO, CFO, et al) sure as hell aren't going to receive anything worth its weight in air. Yes, it's important to try and understand your stake and whatever choices may actually be available to you. It's also important to realize that you are likely part of the 99% of employees who have been handed a worthless piece of paper, which just might convert into something valuable under a very specific and extremely unlikely set of circumstances. On top of everything is the fact that not all financial advisers are equally knowledgeable or caring about their profession. Given the same documents to review, some will be overly optimistic or just plain incompetent while others will actually be able to explain just what you have lined up. How many stories of "I was advised X, so I spent money, and now I'm broke and losing my home" stories do we need to read to understand this? Your salary is your compensation, and you base all financial decisions solely on that income. You figure out your cash-out options, and when the time comes that you convert to hard cash, now you have more money. Until then, keep your dreams of a windfall with you at night under your covers. It's foolish to plan out your life expecting to yes, win the lottery.

marssaxman 10y ago

Au contraire; it's a rule of thumb distilling 20+ years of industry experiences and observations into a simple bit of advice. If I'd followed this advice throughout my career, I'd be happier and considerably wealthier today. Chasing the big stock payout has always been the wrong choice for me. You do whatever you like. If this stuff is interesting, go learn about it! There's nothing wrong with that. But all I've discovered, the more I've learned about the world of VC and options and equity compensation, is that it's a rich man's game and I've been wasting my time trying to play.