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Ask HN: Fired at 51 weeks by prominent startup?

90 points by VestingBurn 10y ago

I was fired at 51 weeks by a somewhat prominent startup. For the first time, I went on unemployment while finding my next opportunity. The startup contested unemployment however they were overruled by the judge. I went on unemployment for the health insurance as I have a young child. I fear associating my name with this incident however I also think I should warn my fellow engineers. The options were clawed back. How would you handle being fired without cause at 51 weeks? Would you share it publicly?

late2part 10y ago
I would handle it publicly if I felt I was treated unfairly in a way that suggests the company is inherently biased. I don't understand your use of 'clawed back.' Commonly stock options don't vest until the first year - were your options really clawed back or were they unvested at termination? Why were you fired? It's plausible you can make a statement anonymously, while your employer would know who it is, most hiring managers in the future wouldn't know it was you, or of the issue. There's nothing wrong with going on unemployment when you're terminated. You directly or indirectly pay for that unemployment insurance.
- smoyer 10y ago
  I was also wondering how long your probation period was.
- btym 10y ago
  >I don't understand your use of 'clawed back.' Commonly stock options don't vest until the first year - were your options really clawed back or were they unvested at termination? I believe they're saying that they had less than a week til their options would vest, but the company pulled the rug out from under them.
  - late2part 10y ago
    Words have very specific meanings. Most employee equity contracts require 1 year of service before vesting. If the company played dirty and terminated him at 51 weeks to avoid granting the options, that's not cool but it's within the scope of the agreement. Clawback in this context has a specific meaning - http://www.investopedia.com/terms/c/clawback.asp http://www.investopedia.com/terms/c/clawback.asp. See also http://www.nytimes.com/2016/09/28/business/dealbook/wells-fargo-john-stumpf-compensation.html http://www.nytimes.com/2016/09/28/business/dealbook/wells-fa... Clawback is taking back something given. Since quite likely the options were never vested or transferred, they weren't clawed back.
    - VestingBurn 10y ago
      Yes, I misused the term. Their actions were within the scope of the agreement.
akg_67 10y ago
Don't say anything about the company publicly. Hire an employment lawyer, let him/her go after the company. Assuming your first batch of options were going to vest at one year anniversary, firing at 51 weeks seems suspicious. Once lawyer has extracted what s/he can from the company and settlement doesn't prevent you from further pursuing, send complaints to department of labor and state attorney general. While DOL and AG office most probably will not do anything, The complaints will go on file at both offices. If the company is pulling similar stunts with other employees and DOL/AG office sees series of similar complaints, they may go after the company. Privately bad-mouth the company to your network (not intentionally), word gets around and will warn others. Make sure you never work for another company connected to founders and senior executives of this company. Unethical management and investors at the top attract unethical people and breed unethical culture, they will never change their behavior.
- M_Grey 10y ago
  I would consider whether or not my record and life could stand up to the kind of public scrutiny that might bring, and be very very honest about it. If I had any skeletons, or even just a bone or two in my closet? I'd chalk it up to rough experience.
  - jacquesm 10y ago
    Why, it's not like you will be on trial, the company is the one engaging in misbehavior here. What skeletons or bones could there be?
    - M_Grey 10y ago
      In a perfect world only the person on trial is subject to that kind of scrutiny, but in reality that's often not how it works. If you can crush someone in the public sphere, that's what happens. I.E. The "Cosby" defense.
      - nugget 10y ago
        Give us a break. There's a world of difference between Cosby (rape accusations) and a tech worker who was fired at 51 weeks (1 week ahead of a vesting date), which almost everybody can read between the lines on (was likely a marginal fit and the company dropped the ball/took a long time deciding whether to keep them or not). The company might respond with ''they sucked, and deserved to be fired'' but that's hardly being ''crushed'' in the public sphere.
pavlov 10y ago
Would it make sense to share your experience on Glassdoor? That's probably the most widely read forum if you want to warn others of this company.
- greenyoda 10y ago
  If he mentioned on Glassdoor that he was fired after 51 weeks, that would pretty much be making a public statement that the company could attribute to him (unless they did this to many other people). If he ever wants to sue the company, the first thing a lawyer would tell him is to not make any public statements.
  - 35bge57dtjku 10y ago
    He doesn't have to specify 51 weeks on glassdoor.
brudgers 10y ago
That sucks. My random advice from the internet is that there's almost certainly nothing to be gained by turning a termination into news on the internet. The experience is sunk cost. Rationalizing a marginal action as righteous is still rationalizing. And, unless you have forty four hundred followers on Twitter, the primary damage is likely to be to yourself...the company probably outguns you on social media and when it comes to employment networking. Besides, if you had forty four hundred followers on Twitter, there would have been a tweetstorm when it happened. Anyway, success is very often the best form of revenge on asshats. Good luck.
anon543210 10y ago
This actually happened to me as well. I was released about one month prior to my shares vesting, but they didn't contest my unemployment. Still its a real bs thing to do. I wish I could say something publicly and let others know about the mess that place was but I decided against it. They also made me sign papers prior to getting my final check and vacation pay that said I wouldn't take any action against them.
- late2part 10y ago
  Almost certainly they didn't make you. The law says they have to pay you when they terminate you. https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/californiapaymentoffinalwages.aspx https://www.shrm.org/resourcesandtools/tools-and-samples/hr-... They likely offered you an inducement (severance pay) in exchange for you agreeing to a contract that precludes disparagement or other action. If they did coerce or force you into signing, the contract is null and void and you should see an attorney. Were you offered any severance above and beyond your due wages?
  - VestingBurn 10y ago
    This was my experience too. I took the vacation pay but passed on signing the non-disparagement paperwork. The later paperwork was offered with a couple of weeks of pay incentive.
  - anon543210 10y ago
    >They likely offered you an inducement (severance pay) in exchange for you agreeing to a contract that precludes disparagement or other action. Yes this was the case.
- mgarfias 10y ago
  Pretty sure (IANAL) that is coercion. And a coerced signature is void.
- xenadu02 10y ago
  California law requires them to pay your final paycheck and cash out vacation pay on your last day of employment. They don't have any option. They coerced you into signing and gave you nothing in exchange. You can probably get the agreement voided on that basis, depends on having a good lawyer and sympathetic judge.
justin66 10y ago
Ask an unemployment lawyer to get as much from them possible. Ask that lawyer about the risks of talking publicly. The people here are not paid to worry about your well being...
- devin 10y ago
  > Ask an unemployment lawyer to get as much from them possible. I don't recall the source, but I remember overhearing advice about when to sue. The advice I heard was "Before you hire a lawyer, count to 1,000 twice." > The people here are not paid to worry about your well being... No, they are not.
jacquesm 10y ago
Check your contract for acceleration clauses in case you've been fired without cause you might still have a chance. Regardless of whether or not they are in this contract this is something that you should always insist on when signing up with a start-up. Have your lawyer that you pay check your paperwork before signing to make sure it is fair, don't be pressured and don't take 'this is standard stuff' as a reason to sign it without review. Yes, it will cost you some money but it may save you much more.
- phest 10y ago
  How likely is a startup to allow that type of clause for a non executive? I thought sacking people at will was part of the business appeal of places like California.
  - jacquesm 10y ago
    If they don't allow a clause like that that would be a pretty good reason not to put your signature at the bottom of the paper.
    - devin 10y ago
      That's not the question that was asked. The question was: how likely is it?
lien 10y ago
I would sue the company. most definitely. There's no need to make a scene publicly, but if you were let go without much warning, you would be able to win. CA protects workers and a good lawyer would be able to find a good cause for this.
lien 10y ago
I would sue the company. most definitely. There's no need to make a scene publicly, but if you were let go without much warning, you would be able to win. CA protects workers and a good lawyer would be able to find a good cause for this.
twostorytower 10y ago
First off, I'm sorry this happened to you. That's a really sucky thing for a company to do to somebody. That said, you're not in a good place right now. Don't make any rash decisions in that state of mind. It's really not in your best interest to take this public. At the end of the day, the company didn't do anything illegal. You most likely signed a standard 4 year/1 year cliff vesting schedule, and it did what it was designed to do. What they did was immoral and wrong, but not illegal. Sure, you can still sue (unlikely you'd win but they may settle to avoid a costly legal battle). And if you think a year of your options are going to be really valuable, it may be worth discussing with a lawyer if you're willing to foot the bill. My best advice - focus on finding a new job right now. Land somewhere with a great track record for employee well-being so you don't run into this in the future. Get settled into that first. There's no benefit to making a big deal about this right this second. Bring yourself to a good place, then explore your options.
- Gibbon1 10y ago
  > It's really not in your best interest to take this public. Of course not, the threat of taking it public is one of the clubs the nice employment lawyer is going to us to extract a settlement from them.
- VestingBurn 10y ago
  Thanks -- this actually happened end of February. I decided to wait until I was in a good place before asking.
sulam 10y ago
This is rude move in several ways. First of all, at several prominent companies where I've worked both as a manager and an individual contributor, you would let the person cliff their year if they made it that far. If you were so bad a fit that it was worth firing you in the first year, they could have fired you in the first six months just as easily. Which leads me to another way this is rude: when I'm looking at an employment record and I see someone was somewhere 6 months or less, I don't think much of it. Clearly something didn't work out, even if it wasn't mutual. When I see someone having been there one year, I assume there's one of two options: either the employee just wanted to cliff their shares and then move on or the company let them vest and then fired them. Either one of these does not reflect well on the employee. To let you stay 51 weeks and fire you without options is a double whammy -- I'm going to have the same negative reaction and you have no upside. :/ When you look for your next job, you may want to emphasize that you were at UnicornCo for less than a year to avoid this bias or at least offset it some. That will obviously require you to have a reasonable explanation for why there wasn't a good fit, but you were going to need that anyway. Forgot to add: contesting your unemployment at a reasonably sized company is really unheard of. Even when someone is fired, unless they are fired for cause (like, they stole stuff, harassed someone, etc) you're going to give them unemployment. If I'm interviewing you, this detail will make me want to dig further into your story. Take that as you will.
- nharada 10y ago
  This is not related directly to OP, but I'm interested to hear opinions from others: Do you really look poorly on someone who quits after a year instead of 6 or 18 months? If so, how far after that year before you don't think poorly of the move anymore? A few months? A year?
  - romanhn 10y ago
    I asked a similar question here: https://news.ycombinator.com/item?id=12233155 https://news.ycombinator.com/item?id=12233155. As a hiring manager, my short answer is - yes. If there's a bunch of short stints, I won't consider a resume no matter how relevant the experience. If there's proof that you can last at one place for 2+ years, the rest can usually be explained early on and likely won't impact the rest of the process too much.
nstj 10y ago
Lawyer.
fleitz 10y ago
Name the company, don't name yourself.
- scott_karana 10y ago
  The company could still name them... Not sure why you're getting downvoted, though :(
- VestingBurn 10y ago
  How does one do this without looking like a heckler on the side of the road that nobody is going to pay attention to?
  - fleitz 10y ago
    glass door, etc.
smegel 10y ago
> The startup contested unemployment What does this even mean?? (non-American here).
- 35bge57dtjku 10y ago
  Companies have to pay some or all of your unemployment, so it's in their interest to say you were fired for a reason bad enough that you shouldn't get unemployment. If they are found to be right, you don't get the unemployment benefits.
- VestingBurn 10y ago
  When you file for unemployment, an employee from the government contacts you and the employer. The employer can claim you were fired for a reason. Then the claim is automatically denied unless you contest it. When you contest it, you appear before a local judge. It's just you, the judge, and the other party (in this case, my manager). They present their argument and you present yours. In this case, they really tried to throw tons of things at me (some I had contradicting evidence in non-work email however I had no idea they would make such wild claims). The judge forced them to narrow it down to the top 3-4. For these items, the judge heard one side and then the other. Then we had closing arguments. Apparently, many people who are denied unemployment do not contest it. But in my experience, it was very straight forward. I did not need a lawyer. I stayed calm and presented my side. The very next day I received a letter informing me that I had won and by the wording it was clear the judge sided completely with me. Of course, that was just for unemployment however it was a very satisfactory experience.
sfifs 10y ago
See a good employment lawyer. Unless you were fired for unethical practices, harassment, theft types of reasons, almost certainly a contention for wrongful termination can be made in a case like this. Your employer has taken a ridiculous risk.
vabmit 10y ago
A lot of people said hire a lawyer. I think that's wrong. I would just move on and find another job and forget about this start-up. My guess would be that either you had bad luck and got involved with a bad founding team or that there were performance issues/issues with your working relationships/personality. Either way just moving on is the mature thing to do. I would never hire anyone who mentioned the word "lawyer" over a firing (let alone actually sued a company) that's just too much of a risk for a small company/start-up. Talking to other engineers at the company to "warn them", or better yet, gain an understanding of why you were let go would probably be helpful in your own career development. When I've had to fire a technical person, I've always gone over the matter with their co-workers to make sure there is coverage and not a skills gap with out the person. If you do sue, your name will most likely show up in public court filings. That could end your career with start-ups unless the start-up turns out to be a total publicly visible disaster. The economic damage to your reputation will likely outweigh any awards from the court (if you even win the case)... especially after you pay your legal team. Were your options really "clawed back" (meaning recouping compensation that has already been given) or did they just not vest? Unless you mean founder equity or RSUs instead of options, I can't see how you would have had them after 51 weeks. Usually, people vest like 25% of their promised equity compensation after 1 year (the "cliff") and then a small percentage each additional month until they fully vest after 4 (or sometimes 5) years.
mattbgates 10y ago
Sometimes it is a blessing in disguise, but go ahead and share it publicly if you wish, especially if you were fired for reasons unjustified but there is also the chance that the startup simply let go of the people they thought were the least valuable asset to their company. Similar situation happened to me. I say it might be a blessing in disguise because... I worked for a software company that designed kiosks for solar panels and I worked on the design of the software, how it looked, special requests, etc. Anyways, in the interview, they said they were hiring me to help catch them up.. they had about 150 clients they had to cold call to get information from them, assets, etc. -- these clients had already paid their money, but hadn't received kiosks or software. Anyways, to make a long story short, about a year later, I had knocked them down to about 30 clients left. Meanwhile, our competition was also growing, and these companies were developing in HTML5, whereas we were still building in flash-based software, with an in-house developer working on it upgrading us, but the actual update never seemed to come. Anyways, it seemed that because that company refused to update their software, we lost out to our competition, or we were starting to lose. I was called into an office, where human resources told me they had to let me go. So they gave me the choice: If I didn't file for unemployment, they would give me a 3-week severance pay. Fortunately for me, I was working a second job, so I actually couldn't file for unemployment, so that helped me out and was like getting paid for doing nothing for 3 weeks. Awesome how some things worked out, though in the first week was rough, I was certainly devastated.. nothing can prepare you for the moment you get laid off... and you go over so many scenarios in your head, "What did I do wrong? What could I have done better? What email did I forget to send? What assignment did I miss? Was it that one time I was 10 minutes late coming back from lunch? Was it that one day that I was running late to work because I overslept?" You go over everything because honestly, you just don't really know. I had later found out they were struggling badly, financially, and I was the most expendable, so they let me go. I was lucky because I also kept in touch with my former co-workers, who all were not being paid on time, who were still showing up to work, not knowing if they were going to get paid or not, and some of them had to take the company to smalls claims court to get what they were owed. The company soon went under and I think they managed to stay in business by keeping three employees, simply for maintenance issues for existing clients. So lucky to be let go first.. as everyone else would soon have to struggle, whereas I had a nice free ride for 3 weeks of making money by doing nothing, but accepting the fact that they laid me off. Did I write about this company? Sure did but there was and is still no reason to mention their name or be mad at them. Tough world of competition out there and they lost. Do I expect anything from it? Absolutely not. Life goes on and you find other companies. Startups are either successful.. or they aren't. And I am sure no startup wants to fire or lay off their employees, but sometimes, the startup is just failing, and they feel horrible themselves, wanting to have been successful, but realizing the reality of the situation. Life goes on.. the second job I was working at the time.. became my primary job, and I still hold the position over 4 years later, as a very satisfied employee who loves his job. Look to it as a learning process, an experience, and keep moving on til you find the job or come up with your own that will set you up for however long you need.
kogir 10y ago
Most startup options amount to nothing. What happened to you is reprehensible, but be careful to ensure you don't spend more money pursuing this than you're likely to gain. Remember that options are just the privilege to exchange real money that has value now for restricted private stock you can't easily sell and will very likely be worthless. Obviously you know more about the company having worked there - just be careful indignation and a sense of justice don't prevent you from making the optimal financial decision.
- VestingBurn 10y ago
  Well said. Thanks.
1_listerine_pls 10y ago
The reason?
paulcole 10y ago
You're the guy who got fired. Why would anyone listen to you? Just because it wasn't for cause doesn't mean they just didn't get fed up with you sucking and decide to get you out ASAP. This is how people will perceive this.
- VestingBurn 10y ago
  I don't disagree. It's interesting seeing this angle on it though: https://zachholman.com/posts/fired/ https://zachholman.com/posts/fired/ But again, I don't disagree with you. There is a lot of grey around in being fired and people tend to believe authority over non-authority (for good or bad, that seems to be the case).
debacle 10y ago
Assuming this is in CA, you have a lot of tools and protections available to you as an employee.
- VestingBurn 10y ago
  I hope that is true but so far, what I've found is that due to CA being an "at will" state, you can be fired at any time for any reason. That is what makes the 1 year option cliff daunting in CA. I think some startups view it as we can get away with anything in that first year due to the threat of termination before the options vest. I tend not to put so much weight on options but it is an interesting issue. But to get back to your post, was there anything in particular you were thinking of? I'm just not sure what to look for or if this is more the kind of thing it is hard to know about without being in employment law.
JSeymourATL 10y ago
> How would you handle being fired without cause... Get up... dust-yourself-off, and Move On! The knee-jerk lawyer-up advice is asinine. The only guys who win that game are attorneys. Are you prepared to spend $5-10K+ in 'modest' legal fees so you can to go to war with a former employer? Do you really trust the courts will right the wrong you perceive? It totally sucks being fired! The biggest bruise is to your ego and immediate cash-flow. Best to put that time/money/energy into connecting with a new, potentially more rewarding job.
- VestingBurn 10y ago
  Maybe... It depends on how effective the lawyer is on brokering some sort of compensation without going public or involving the courts. In many issues, both parties would rather avoid the court system however it seems to require a lawyer to get to the negotiating table. I suspect this is on the minds of many replying with the advice to go to a lawyer.
- venkasub 10y ago
  I would agree. Shit happens; deal with it without wasting more resources on it. [BUT, If you can afford the legal fees and more importantly -- the TIME -- go for it, but do not go with the idea of vendetta in mind, but rightful compensation.] I somehow like the idea of 'Let Go', though easier said than done, this will make you realize many things in life and prepare you for the Future than continue to lurk in the Past. (Or is it the Buddha in me talking!!)
cjhanks 10y ago
If you were at 3D robotics, forget it. Might be coincidence.
rajacombinator 10y ago
This is why vesting cliffs are BS. (And I say that from a founder perspective.) Sorry you got screwed.

hiringmanager 10y ago
Your profile says you want to hire people, but your comment here says you are prejudiced. You're operating from the 1950s veiwpoint which is really a cultural hold over from the great depression- that employees should be desperate to find a job and companies should be free to screen them out for any arbitrary reasons. Let me guess, you make them write code on a white board too. If you have a one year cliff you are providing a huge financial incentive for your employees to leave after a year, by shifting the risk onto them. Maybe that's why you don't have enough people already?
- maxlybbert 10y ago
  It's not necessarily a case of expecting candidates to be grateful for even being considered. Avoiding a bad hire is surprisingly important.
- romanhn 10y ago
  Way to build up an imaginary strawman to argue against. I never claimed any of the things from your comment, I don't make anyone write code on a whiteboard, and I don't have trouble hiring either. If I'm going to invest into onboarding an employee, training them, providing opportunities for growth, etc. I'm not sure why you find it so disagreeable that I would prefer that they stick around as long as possible. Both parties are free to discontinue the relationship when the fit is no longer there, and that's fine by me. I'm indeed prejudiced against cowboy coders that want to jump from team to team, focus on picking up new tech for their resumes and do their best to avoid any maintenance work. Maybe that's just me, though...
  - hiringmanager 10y ago
    >I'm indeed prejudiced against cowboy coders that want to jump from team to team, focus on picking up new tech for their resumes and do their best to avoid any maintenance work. Being at a company for a year doesn't tell you someone is like that. This is why I called it a prejudice. Being at a company for a year can also indicate that the person is quality enough to be choosy about where they work and not to stick around when management proves themselves incompetent. Most statups fail. Most startups management is very poor. The best software developers realize that they are making an investment by working for a startup. Thus staying around past the first year is a judgement call on the future of the company.
- meowface 10y ago
  It's completely reasonable to want potential employees who are likely to stay at your company for more than a year. If someone's entire experience is leaving places after less than a year, either they are bad employees who are fired or quit due to performance issues, or they never intend to stick around long anywhere. For some kinds of work, that's fine, but I think most companies of all kinds would prefer employees who will stay with them for at least a year. It's totally valid for someone to want to hop companies and favor that lifestyle. But it's also valid for companies to favor people who don't want to hop.
  - sfrailsdev 10y ago
    I think what isn't being mentioned is that sometimes the company changes beneath your feet. Apps get sold and teams get aquihired, friends get let go or leave, roles get redefined; company priorities shift.
    - hiringmanager 10y ago
      And companies turn out to be poorly run. With the 4 year vesting schedule, employees are incentivized to leave after a year to diversify their holdings.

cure 10y ago

When I look at resumes, I don't like to see a series of short (less than 18 months, say) stints. It can happen once or twice, no problem - sometimes things just don't work out. If the resume shows three or more short stints, especially in a row, it's a red flag. I might still phone screen the candidate if their experience looks relevant and the resume is otherwise impressive, but I'm going to ask about the short positions, and the answer matters a lot.

hiringmanager 10y ago
This is silly. What you think these are "bad" employees and the company is figuring it out in the 14th month? Or are you stuck in the 1950s era idea of loyalty and these employees are not "loyal"-- yet are you considering whether you're giving them a reason to be loyal?
flukus 10y ago
Your avoiding hiring people that get frustrated in crappy environments and rewarding the ones that put with it them or don't know any better.
- romanhn 10y ago
  Note that he's talking about a series of short stints, not just one or two. If every environment is lousy and warrants immediate exit, perhaps the problem is not entirely with the environments. Chronic complaining without a bias for action is not exactly a positive trait as far as interviewing is concerned.
  - flukus 10y ago
    > If every environment is lousy and warrants immediate exit, perhaps the problem is not entirely with the environments Most are like that IME. This is compounded by the fact that these are the companies most frequently hiring. You've probably seen comments along the lines of 90% of candidates failing fizzbuzz? Remember those candidates work somewhere.
    - romanhn 10y ago
      Don't believe that FizzBuzz trope - there certainly are candidates that can't code their way out of a wet paper bag, but they are hardly the majority. I'll also point out that 90% of companies could care less about time/space complexity, optimized algorithms and data structures more complex than a hash table. Business apps are everywhere and don't require a fancy CS degree - some folks thrive in these environments, for others it's personal hell. I guess what I'm getting at is that the onus for company/team/culture fit is on both the interviewer and the interviewee. Bad luck aside, there's no excuse for running into irreparably lousy workplaces time and time again.
      - flukus 10y ago
        > Don't believe that FizzBuzz trope Don't believe it? It's not something I'm just parroting, it's something I've seen for myself, from people with more than a decade of experience. > I guess what I'm getting at is that the onus for company/team/culture fit is on both the interviewer and the interviewee. As an interviewee you don't have access to the single most important piece of information to make that assessment, the source code. When this changes then me and a lot of others will stop ending up at crappy companies.
  - Bahamut 10y ago
    Except most companies are lousy dev shops. Bad practices are endemic at many, and good practices are not practiced a lot. Engineering is often ignored in favor of quick wins. There are a lot of reasons for quality developers to be dissatisfied with shops out there. To take myself as an example, in my almost 4 year career, I am in my 5th developer job. I have changed jobs every 10 months or so, excepting one job lasting 3 months due to asinine expectations, and my current one that I am 15 months into and counting. The first two I left for better compensation & more responsibility. I wasn't one for inaction at my jobs either - I was one who would be a driver of change and better practices. At two of the jobs I was promoted to lead developer, including my current one where I am a hybrid between tech lead & engineering manager. I have interviewed many candidates over the past two years - I have found that candidates who are able to explain their positions well and are open to considering alternative possibilities tend to be passionate ones who care about what they do, which is a characteristic that is a positive if you want to improve the state of engineering at the company. Short durations often tend to mean that they care more than anyone else at the company, and management/executives are too difficult to fight as they have more power to countermand attempts to make things better if it doesn't align with misguided judgment. I would recommend you rethink your evaluation skills, speaking as one who it sounds like you'd chase away from being interested because such biases would become obvious over the course of interviewing. I am a respected expert in my domain with significant open source work in it & major open source project stewardship. My company has been rewarded with my finding other high quality developers, as well as me being a strong advocate - all due to the simple choice of having good processes and listening to employees & trusting their professional opinion. It's not surprise that the company has risen into Fortune's top 50 small companies to work for.
- cure 10y ago
  Not exactly; like I said that can happen once or twice. But if it happens 3 times or more in a row, something else is likely going on. And that's a red flag for me when hiring; I don't want to invest in a person only to have them leave very shortly after. That's just a waste of time.
whostolemyhat 10y ago
Less than 18 months is about the length of time to work somewhere, get a crap raise after an annual review, have a look around and realise you could be better-paid for the same work somewhere else. Why would you stay at a company where you're being under-paid?

hiringmanager 10y ago

You seem to imply that an employee being somewhere for one year is a bad sign. That seems like a prejudice. Sure, staying somewhere only 6 months can be a lack of fit. Staying somewhere a year, though, doesn't mean anything negative. Especially with startups. The startup could have pivoted. The employee could have felt that it was a good fit, then the startup pivoted and they gave the company an additional 6 months. The employee might have done great, but the statup founders chose to hire form outside rather than promote within (Showing a lack of loyalty to their own employees, and to the ones who took the greater risk by being there earlier.) Also, you should never look down on an employee who chooses to leave after one year even if you know they are doing it because of the cliff. The option structure of four years of vesting with a 1 year cliff is employee hostile (And startups should not be doing this because it incentivizes your employees to leave.) The first years and even months of a startup are most critical. Therefore, vesting should start nearly immediately, at most a 90 day cliff. Secondly, the startup cargo culture is set up in a way that does not have a level playing field for founders and early employees. Founders often get RSUs which are 3X as valuable per share as startup options. An employee on a 4 year option plan should quit every company after that first year cliff. In that way, after four years they have options in four companies... rather than all their eggs in one basket. RSUs solve this problem by giving them real skin in the game rather than a lottery ticket that is subject to all kinds of founder shenanigans down the line. Franky, all employees should be getting series-A preferred as it is silly that a Venture Capitalist an put in $10k of 10k shares and get preferences while an employee who gives up $70k in salary gets $70k options that he has to spend another $20k to exercise and even then only gets common. Why is a VCs money more valuable, dollar for dollar than an employees? It's not because the VC is really going to help the company execute in any significant way-- yet the employee is. And the delta between market price and salary you're paying employees is a real financial investment on the employees part (another reason you should not have vesting cliffs.) Given that we have this cargo culture where things are not thought out from first principles and everyone emulates what other startups did we have not only job titles from the 1950s (eg: 21 year old "CEOs" of 4 person companies) but we have option plans that have not changed since the 1970s!) The right thing for an employee to do in the market where companies are not giving them real skin in the game is to move every year, so that they diversify their lottery tickets. It's the only smart move. And that's just looking at options. When you consider the only time most engineers ever get a raise is when they leave to go work elsewhere, from a salary perspective they should leave each year too.

VestingBurn 10y ago
I think you nailed the biggest issue with being an engineer in startup land. The interests just aren't aligned.
sulam 10y ago
It sure isn't a positive sign. Also, I think you are confused about startup options. I've never seen a founder get RSUs, there are strong tax reasons to prefer options -- primarily that you can lower your tax payments from regular income to long term capital gains. You can also convert some portion of them to non-qualified options which can be positive for the founder if they leave. Regarding preferred vs common, again it is in the employee's interest from a tax perspective to receive common shares. The value of preferred to an investor is that it typically has some incentive structure for the founders to grow the value of the company. It also tends to set a minimum bar for an exit. If these hold true, the value of their shares is the same as common, but common was much cheaper. This is important for things like early exercise and whether or not your shares remain above water. The math in your example which implies preferred shares are somehow cheaper than common must have some unstated elements, perhaps the passage of time? Preferred shares are always more expensive, typically 3X or so, at any given time. Finally the last point I'd like you to consider wraps up the remaining themes in your response. Founder "games" that dilute employees are typically unpleasant for the founder as well and are the result of having to take investment under less than favorable conditions. When this happens investors and company leadership want to incent people who are still present, not people who put a year in and left. Also your desire to start earning shares right away vs cliffing seems internally consistent with what seems like your desire to use your time the way an investor uses their money -- i.e. spread it around liberally to hedge your bets. That's fine for you to want, but if I'm a founder, I am all-in on this one thing, and I am looking for employees who are also all-in, or as close as I can get to that in the marketplace. Of course the market usually resolves somewhere in between -- I get employees who stay at least a year, preferably more like two or three and (if we are doing really well) sometimes longer. Meanwhile it takes more like 10 years on average to achieve a reasonable exit, so in the time I am slogging away, they can get meaningful exposure to 2-4 other companies. This is worse than what a VC gets in the same amount of time but the VC brings liquid capital to the picture, among other things. The current climate devalues money, but it's still necessary to remain in business in any meaningful way and the value of six months of a new engineer's time is usually far lower than what you are imagining. There are of course exceptions -- you can be a true mercenary and consult to startups in exchange for stock and an hourly rate, but you need very strong experience to make this appealing to the startup and of course your base will generally not be the same as an employee taking the equivalent role. My wife has done this, and it's workable but not awesome long term in my opinion. And then there is the extremely light weight version of this, which is to advise startups in exchange for equity. You have to bring commensurately more to the table for this to be appealing to the startup, and you likely won't see any cash out of it for a long time (in fact the times I have done this I will end up spending money on the company in the form of investing and at least early exercising my shares). Long story short, feel free to bargain for whatever you want, just realize that achieving alignment on terms will require some give on both sides, and be sure not to over play your hand -- it is hard to hire engineers, but not impossible! And honestly one year cliffs are not the place to negotiate, because the company is unlikely to give on that. Go the consultant route if you really want to be a mercenary -- and if you find a rocket ship you can always sign on as an employee. One last thing -- being an employee has paid for my house and my kid's education. The stock you get isn't always meaningful, but it can be!