3 ms·

Most startups pay early-stage people primarily in equity. You sound like you're not from the US, but that's mostly how it works here. Startups are also founded

Most startups pay early-stage people primarily in equity. You sound like you're not from the US, but that's mostly how it works here. Startups are also founded mostly by younger people, who have much lower salaries and cost of living requirements. It might work differently elsewhere, in which case my argument doesn't apply, but I was talking specifically about the US startup industry.

lsc 17y ago
I'm saying that you can look at the engineers working for equity as investors; they are. Your Engineers getting tired of eating ramen and leaving for real jobs is a lot like investors not giving you the next round of funding. Also, even mediocre engineers in their mid 20s are going to be making $85K or better plus benefits here in the sf bay area. add in benefits and you start approaching the lower end of what I suggested; and all other things being equal, you are going to have a hard time if all your Engineers are mediocre.
- apsec112 17y ago
  "I'm saying that you can look at the engineers working for equity as investors; they are." Not in the barrier-to-entry sense, which is the one I was discussing. It's a lot harder to get a VC to invest in you than to get some guy you know from college to help you write a piece of software. "Your Engineers getting tired of eating ramen and leaving for real jobs is a lot like investors not giving you the next round of funding." Hence vesting. "Also, even mediocre engineers in their mid 20s are going to be making $85K or better plus benefits here in the sf bay area." I know several full-time software engineers in the Bay Area who are 25 and making that much, but they're all a). extremely smart and b). have degrees from top universities, so I really don't think "mediocre" people make that much. Still, you're right that top people are reasonably expensive if you pay them in cash rather than equity.
  - lsc 17y ago
    "Hence vesting." Your equity only acts as an incentive to stay as long as it looks like you have a chance of winning. Just like investors will eventually stop throwing good money after bad if you don't meet your numbers, your Engineers will start looking for paying work. Getting good people who have other options to work for free for any period of time is no mean feat. Personally, I've gone the other direction; I hire inexperienced people and train, but that only works because I am experienced myself. (of course, I've never seriously tried to get VC, so I have no clue how difficult that is.) My point is just that as long as you have your Engineers, you can cover infrastructure with beer money (at least, until you get really huge.) which I guess was your point, too, what with saying the barrier to entry is low. I'm just saying; keeping a few really good engineers happy without money is not as easy as it sounds. And, it's not as hard as you think for Engineers to come up with money. I spent almost $60,000 on servers last year.
lsc 17y ago
Out of curiosity, why do I sound foreign?

lsc 17y ago

I'm saying that you can look at the engineers working for equity as investors; they are. Your Engineers getting tired of eating ramen and leaving for real jobs is a lot like investors not giving you the next round of funding. Also, even mediocre engineers in their mid 20s are going to be making $85K or better plus benefits here in the sf bay area. add in benefits and you start approaching the lower end of what I suggested; and all other things being equal, you are going to have a hard time if all your Engineers are mediocre.

apsec112 17y ago
"I'm saying that you can look at the engineers working for equity as investors; they are." Not in the barrier-to-entry sense, which is the one I was discussing. It's a lot harder to get a VC to invest in you than to get some guy you know from college to help you write a piece of software. "Your Engineers getting tired of eating ramen and leaving for real jobs is a lot like investors not giving you the next round of funding." Hence vesting. "Also, even mediocre engineers in their mid 20s are going to be making $85K or better plus benefits here in the sf bay area." I know several full-time software engineers in the Bay Area who are 25 and making that much, but they're all a). extremely smart and b). have degrees from top universities, so I really don't think "mediocre" people make that much. Still, you're right that top people are reasonably expensive if you pay them in cash rather than equity.
- lsc 17y ago
  "Hence vesting." Your equity only acts as an incentive to stay as long as it looks like you have a chance of winning. Just like investors will eventually stop throwing good money after bad if you don't meet your numbers, your Engineers will start looking for paying work. Getting good people who have other options to work for free for any period of time is no mean feat. Personally, I've gone the other direction; I hire inexperienced people and train, but that only works because I am experienced myself. (of course, I've never seriously tried to get VC, so I have no clue how difficult that is.) My point is just that as long as you have your Engineers, you can cover infrastructure with beer money (at least, until you get really huge.) which I guess was your point, too, what with saying the barrier to entry is low. I'm just saying; keeping a few really good engineers happy without money is not as easy as it sounds. And, it's not as hard as you think for Engineers to come up with money. I spent almost $60,000 on servers last year.

lsc 17y ago

Out of curiosity, why do I sound foreign?