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Another way (and perhaps the optimal way) to mitigate your risk is to join an existing startup early on, which we're also trying to make easier for hackers to d

by pg 16y ago

Another way (and perhaps the optimal way) to mitigate your risk is to join an existing startup early on, which we're also trying to make easier for hackers to do: http://workatastartup.org http://workatastartup.org As I pointed out in another thread, you can titrate the amount of startupness you want by the age of the company you join.

mcdoh 16y ago
Embiggen your startupness with cromulence!
benmathes 16y ago
The value proposition for not-quite-founders when you compare your market-rate salary vs. a startup-salary + equity tends to drop steeply. I don't have data, but from my own anecdotal experience you'll probably take around a 20-25k per year salary cut for 0.1% - 0.5% in options if you take a position at a series-A to Series-C funded startup. This economic situation is really a kind of hybrid of full-salary and apprenticeship, where you're partially compensated in startup experience. I'm doing it now so I can learn the ropes of an early-stage startup while paying off my student loans. But long term I suspect your EV is better as a founder or cash-compensated so long as you properly invest your cash compensation. <only-marginally-realistic rant> Even better is to be one of those VP's who come in during Series C at an already-successful company and somehow make a market-salary and get 10%+ in equity. You know, the fuckers in suits who come in and do nothing. </only-marginally-realistic rant>
- pg 16y ago
  Risk and reward tend to be correlated, at least in efficient markets. And since there are so many startups to choose from, all desperate to get programmers, there's a reasonable hope of getting market price for your risk. The startups presenting at Workatastartup range from established companies 5 years old to startups from the most recent YC cycle that are currently run by single founders and are looking for people to be de facto cofounders, in every sense including equity.
  - benmathes 16y ago
    Fundamentally I think startups overvalue the risk of coming up with a product vision and undervalue the risk of executing on that vision. It's arguable harder and more risky to go from "lets make a social network" to the entire product that is Facebook, and a majority of the people that bridge that gap get relatively shafted on equity. As to your point about joining a post-YC company, employees #1-#5 are generally defacto cofounders and are often given similar equity. I'm not disputing that. I'm talking more about (roughly) employees #6 -> #30. At that point you have a product vision, but no concrete product. Since the major work of a startup is discovering the details of what to build, a majority of the work isn't done yet, and the real risk hasn't been mediated. However, a majority of the equity has already been passed around. The risk and reward are certainly correlated. To say for certain you'd need a rather complex economic analysis that factors in opportunity costs to really say what the monetary sweet-spot is on the founder<->enterprise-employee spectrum. My suspicion is that the startup talent market isn't very efficient; As an industry we haven't really found a good way to judge technical skill other than working alongside someone for months. This hurdle means all the good jobs come via social connections. All the good positions are taken by the founder's network, and all the great devs already have a good gig.
    - abstractbill 16y ago
      I'm talking more about (roughly) employees #6 -> #30. At that point you have a product vision, but no concrete product. I don't think this is true, at least not for consumer internet startups. If you can't build a concrete product in this space with 5 people, you probably can't build one at all.
      - frederickcook 16y ago
        In addition, it'd be quite irresponsible to start scaling your hiring without that concrete product (proven, repeatable, scalable sales process).
        benmathes 16y ago
randomwalker 16y ago
Pedantic note: I've seen you use the word titrate before in the same context. It doesn't mean what you seem to think it means: http://dictionary.reference.com/browse/titrate http://dictionary.reference.com/browse/titrate Perhaps you're using it in a metaphorical sense. But I've never seen anyone else use it that way.
- prodigal_erik 16y ago
  It's also used in medicine, meaning to vary the dosage of a medication until you get the desired effects.

by pg 16y ago

mcdoh 16y ago

Embiggen your startupness with cromulence!

benmathes 16y ago

The value proposition for not-quite-founders when you compare your market-rate salary vs. a startup-salary + equity tends to drop steeply. I don't have data, but from my own anecdotal experience you'll probably take around a 20-25k per year salary cut for 0.1% - 0.5% in options if you take a position at a series-A to Series-C funded startup. This economic situation is really a kind of hybrid of full-salary and apprenticeship, where you're partially compensated in startup experience. I'm doing it now so I can learn the ropes of an early-stage startup while paying off my student loans. But long term I suspect your EV is better as a founder or cash-compensated so long as you properly invest your cash compensation. <only-marginally-realistic rant> Even better is to be one of those VP's who come in during Series C at an already-successful company and somehow make a market-salary and get 10%+ in equity. You know, the fuckers in suits who come in and do nothing. </only-marginally-realistic rant>

pg 16y ago
Risk and reward tend to be correlated, at least in efficient markets. And since there are so many startups to choose from, all desperate to get programmers, there's a reasonable hope of getting market price for your risk. The startups presenting at Workatastartup range from established companies 5 years old to startups from the most recent YC cycle that are currently run by single founders and are looking for people to be de facto cofounders, in every sense including equity.
- benmathes 16y ago
  Fundamentally I think startups overvalue the risk of coming up with a product vision and undervalue the risk of executing on that vision. It's arguable harder and more risky to go from "lets make a social network" to the entire product that is Facebook, and a majority of the people that bridge that gap get relatively shafted on equity. As to your point about joining a post-YC company, employees #1-#5 are generally defacto cofounders and are often given similar equity. I'm not disputing that. I'm talking more about (roughly) employees #6 -> #30. At that point you have a product vision, but no concrete product. Since the major work of a startup is discovering the details of what to build, a majority of the work isn't done yet, and the real risk hasn't been mediated. However, a majority of the equity has already been passed around. The risk and reward are certainly correlated. To say for certain you'd need a rather complex economic analysis that factors in opportunity costs to really say what the monetary sweet-spot is on the founder<->enterprise-employee spectrum. My suspicion is that the startup talent market isn't very efficient; As an industry we haven't really found a good way to judge technical skill other than working alongside someone for months. This hurdle means all the good jobs come via social connections. All the good positions are taken by the founder's network, and all the great devs already have a good gig.
  - abstractbill 16y ago
    I'm talking more about (roughly) employees #6 -> #30. At that point you have a product vision, but no concrete product. I don't think this is true, at least not for consumer internet startups. If you can't build a concrete product in this space with 5 people, you probably can't build one at all.
    - frederickcook 16y ago
      In addition, it'd be quite irresponsible to start scaling your hiring without that concrete product (proven, repeatable, scalable sales process).
      - benmathes 16y ago

randomwalker 16y ago

Pedantic note: I've seen you use the word titrate before in the same context. It doesn't mean what you seem to think it means: http://dictionary.reference.com/browse/titrate http://dictionary.reference.com/browse/titrate Perhaps you're using it in a metaphorical sense. But I've never seen anyone else use it that way.

prodigal_erik 16y ago
It's also used in medicine, meaning to vary the dosage of a medication until you get the desired effects.