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I don't think so. Why should employees make up such a large percentage of the money invested in the company? When you take a salary cut of 50K, it's like taki

I don't think so. Why should employees make up such a large percentage of the money invested in the company? When you take a salary cut of 50K, it's like taking that money an investing it right then and there. Why should an employee be investing 50K of their own money into the company every single year? It's bad enough that someone would invest 50K in a single company: one that picked them, not the other way around, with all the information asymmetries that applies, but to add insult to injury: the risk is compounded by the fact that their investing all this money into the very same company they depend on for their paycheck. VCs are much much better equipped to do investing: both in terms of skill sets, experience and information. Employees should not be forced to become angel investors just because they work at a start up. VCs will always have enough money to invest in truely excellent opportunities. It just means, they'll need to invest more. And in this low interest rate world, I don't think the world is starving for cash is it?

austenallred 9y ago
Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening. It's certainly rational in some cases to take the risk of owning a portion of a company instead of taking the same amount of cash and putting it in the S&P 500. You're always investing your time and money, it's just a matter of where. And for what it's worth, if you're getting paid $250k at Apple, you can probably go back at almost any time.
- s73ver_ 9y ago
  "Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening." And that belief is abused, and the employees get fucked over when it comes time for an acquisition, as their shares get dilluted to hell and back.
  - icebraining 9y ago
    Yes, that often happens and it's clearly unethical. What's your point?
    - pascalxus 9y ago
      His point is, that you have to assume that will happen quite often. We're simply not equipped to forsee all the legal and financial risks of having stock options. We've seen too many ways that employees have been taken advantage of. You can't simply "trust" that if the company does well, you'll do well.
      - icebraining 9y ago
        Sure, but who said we should simply "trust" that?
        s73ver_ 9y ago
        That's the implicit suggestion behind the entire options thing. Especially given that almost no individual developer has a bargaining position strong enough to demand the safeguards that would avoid those problems.
        icebraining 9y ago
        Look, people still gets big payouts, even if many get stiffed. One can still rationally take the leap even knowing that the game is rigged.
mywittyname 9y ago
> it's like taking that money an investing it right then and there. I disagree. This is only the case if the options are $50k in cash, or $50k in equity. With startups, the options are $0k in cash or $50k in equity. Startups can wish equity into existence, but they can't magically produce cash.
zeusk 9y ago
> Why should an employee be investing 50K of their own money into the company every single year? It's bad enough that someone would invest 50K in a single company: one that picked them Recruiting and hiring, after new grad level, is a two way street. You have the choice to accept, deny or negotiate an offer.

austenallred 9y ago

Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening. It's certainly rational in some cases to take the risk of owning a portion of a company instead of taking the same amount of cash and putting it in the S&P 500. You're always investing your time and money, it's just a matter of where. And for what it's worth, if you're getting paid $250k at Apple, you can probably go back at almost any time.

s73ver_ 9y ago
"Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening." And that belief is abused, and the employees get fucked over when it comes time for an acquisition, as their shares get dilluted to hell and back.
- icebraining 9y ago
  Yes, that often happens and it's clearly unethical. What's your point?
  - pascalxus 9y ago
    His point is, that you have to assume that will happen quite often. We're simply not equipped to forsee all the legal and financial risks of having stock options. We've seen too many ways that employees have been taken advantage of. You can't simply "trust" that if the company does well, you'll do well.
    - icebraining 9y ago
      Sure, but who said we should simply "trust" that?
      - s73ver_ 9y ago
        That's the implicit suggestion behind the entire options thing. Especially given that almost no individual developer has a bargaining position strong enough to demand the safeguards that would avoid those problems.
        icebraining 9y ago
        Look, people still gets big payouts, even if many get stiffed. One can still rationally take the leap even knowing that the game is rigged.

mywittyname 9y ago

> it's like taking that money an investing it right then and there. I disagree. This is only the case if the options are $50k in cash, or $50k in equity. With startups, the options are $0k in cash or $50k in equity. Startups can wish equity into existence, but they can't magically produce cash.

zeusk 9y ago

> Why should an employee be investing 50K of their own money into the company every single year? It's bad enough that someone would invest 50K in a single company: one that picked them Recruiting and hiring, after new grad level, is a two way street. You have the choice to accept, deny or negotiate an offer.