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> Getting paid in lottery tickets is _not_ sound investment strategy. Anecdotally, I know someone personally who was an early employee at multiple startups at

> Getting paid in lottery tickets is _not_ sound investment strategy. Anecdotally, I know someone personally who was an early employee at multiple startups at all IPO'd. Some of those IPOs happened years after he had already left. He's now a millionaire many times over because he had the acumen to pick winners, and that's specifically what he was looking for when he made his choice on where to work. This is obviously not general investment advice, because you have to have an eye for picking winners. But he certainly recognized that 1) he had an opportunity to get equity for cheap and 2) he knew more than the general market and took full advantage of that fact. He even diversified by working somewhere until his options vested, then moving on, while not waiting for exit. My point still holds: if you don't tolerate risk and want to get paid in cash, don't work at a startup. Your moralizing and demonizing of startup compensation seems misplaced here -- the #1 biggest reason they pay in equity and options is because they are short on cash and long on equity. Founders spend a lot of time trying to raise cash from investors, so turning employees into de facto investors is a cheap and convenient solution.

logfromblammo 10y ago
> ...turning employees into de facto investors is a cheap and convenient solution. And also unethical, in my opinion. If startups treated their investors like investors, and their employees like employees, they would be able to hire people without needing to look at risk tolerance as a hiring qualification. Perhaps coincidentally, young, single people have a much higher risk tolerance than older people with families. If avoiding the appearance of age discrimination is at all important They would even fare better if they refrained from treating employee-investors as a lower class of investor, that can be diluted to oblivion while the higher classes of investor still get paid. Your anecdotal acquaintance sounds like an investor first, who just happened to be able to get hired as an employee. If you job hop while collecting discount equity opportunities, and leave before the success of the company is ultimately determined, how much of that value comes from the work you do, rather than your evaluation of the company and your co-workers? I presume that if the initial evaluation was off, he'd scarper for greener pastures in the middle of the night without waiting for anything to vest? You can't do that in most of the US. Away from the west coast and the Boston-to-DC corridor, there may only be one or two startups in town that need tech employees, if any. If you're in a college town, there may be few dozen, built around somebody's thesis work. If you don't like the local job scene, you have to move your entire household somewhere else. The startups follow the expectations of the investors, and the investors are looking at the coastal unicorns. I just get sick of all the cargo-culting of SV startup culture, y'know? It only works there because it's there, and I'm not even sure that "works" is the right word to use.

logfromblammo 10y ago

> ...turning employees into de facto investors is a cheap and convenient solution. And also unethical, in my opinion. If startups treated their investors like investors, and their employees like employees, they would be able to hire people without needing to look at risk tolerance as a hiring qualification. Perhaps coincidentally, young, single people have a much higher risk tolerance than older people with families. If avoiding the appearance of age discrimination is at all important They would even fare better if they refrained from treating employee-investors as a lower class of investor, that can be diluted to oblivion while the higher classes of investor still get paid. Your anecdotal acquaintance sounds like an investor first, who just happened to be able to get hired as an employee. If you job hop while collecting discount equity opportunities, and leave before the success of the company is ultimately determined, how much of that value comes from the work you do, rather than your evaluation of the company and your co-workers? I presume that if the initial evaluation was off, he'd scarper for greener pastures in the middle of the night without waiting for anything to vest? You can't do that in most of the US. Away from the west coast and the Boston-to-DC corridor, there may only be one or two startups in town that need tech employees, if any. If you're in a college town, there may be few dozen, built around somebody's thesis work. If you don't like the local job scene, you have to move your entire household somewhere else. The startups follow the expectations of the investors, and the investors are looking at the coastal unicorns. I just get sick of all the cargo-culting of SV startup culture, y'know? It only works there because it's there, and I'm not even sure that "works" is the right word to use.