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90% of my engineer/designer friends have no clue what every financial/equity question imaginable even look like, and even if they had a list of them, they'd hav
by GuiA 9y ago
90% of my engineer/designer friends have no clue what every financial/equity question imaginable even look like, and even if they had a list of them, they'd have no clue about how to interpret any of the results, or how to tell if the company is feeding you BS.
I mean, I was the first employee at a startup, involved with fund raising, and then founder at a startup, and even I would have a hard time with that.
Not to mention that even if you have a very solid understanding of what things are like when you get hired, it can all change dramatically in subsequent fundraising.
This is just one of many instances where the employee/employer relationship is heavily biased against the employee. And unless clear disclosure requirements understandable by the average worker are put in place, it'll stay that way. As an employee, your options are inscrutable lottery tickets which value can be redefined in many ways at many points in time, and there's not much you can do against that.
- mbesto 9y ago> 90% of my engineer/designer friends have no clue what every financial/equity question imaginable even look like Totally - I've been thinking about actually putting on a "equity master class for engineers looking to join startups" type seminar in the bay area if people are interested.
- dpeck 9y agoNot bay area (though there fairly often) but if you do it please have it recorded and posted somewhere. Would be a great resource.
- mbesto 9y agoSeems like there's some interest for this. If people legitimately want to know more, please let me know here: https://goo.gl/forms/j70V7ew5Dds7AoOt1 https://goo.gl/forms/j70V7ew5Dds7AoOt1 If there's enough interest I'll put something on. PS - By way of background, I work in tech M&A and regularly see cap tables, equity packages, salaries etc. both in and out of SV.
- ykler 9y agoYou mean biased agains the employee? Anyway, I guess the obvious thought is that situations of information asymmetry like this are not really biased against anyone but just lead to worse outcomes for everyone. Startups would prefer to compensate in equity, but the value of their equity is depressed because potential employees can't tell how much it is worth. I suspect the obvious thought is right although maybe it could be bad for employees if they systematically tend to overvalue equity. (And then it would work against even the rare employee who can tell how much it is worth because he or she will have to compete against a bunch of suckers.)
- GuiA 9y ago> You mean biased agains the employee? Yes, thanks for spotting the typo. Fixed.
- pascalxus 9y agoI completely agree. An employee should be optimizing for maximum salary, the equity should just be considered a token reward. If founders and investors really want to align their goals with employees, then start handing out rev share, otherwise, the employee is just deluding themselves.