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I joined a startup 5 years ago as a CTO for 10% equity. Fast forward 5 years. We merged with another company and we got 60% out of that merge. So then I moved

I joined a startup 5 years ago as a CTO for 10% equity. Fast forward 5 years. We merged with another company and we got 60% out of that merge. So then I moved to 6% equity. Then we raised $15m in various rounds. My equity is now at about 3%. In our last round we were valued at $20m. Well, all the investors have preferential pay back rights. My equity is fully vested. If we sell for $20m today I will make a grand total of $97,000. If we sell for $30m it would be $397,000 and at $40m it would be $697,000. To bring our valuation from where it is today to $40m will take a few more years and be pretty difficult. So I personally advise you not to join a startup and instead start a small side project and take a large salary at an established company. It's actually easier to make that level of money over 5 years even with a moderately sucessfull side project and large salary.

dojoin 8y ago
I had the opposite experience. I also joined a startup 5 years ago, and I was one of the very early employees. I received 0.5% equity as stock options, and my salary was around $120,000. I stayed for a few years, and now I own around 0.1%. The company is now worth a few billion dollars, so my stock is worth a few million dollars. I have no liquidity yet, but an IPO is certainly on the horizon. I don't feel like I took a pay cut. It was my first real job as a software engineer, and it gave me some good friendships and connections. I can't say I learned a lot, and I didn't grow very much. The work was very boring and there weren't any technical challenges or interesting problems. I just got very burned out with the long hours and pressure. But it was nice to live in the Bay Area for a little while and have the "silicon valley" experience. I got very lucky and might be able to retire in a couple of years, so of course I'm going to say that the risk was worth it. But I do realize that I'm an outlier. My advice: If you can somehow spot a potential unicorn and you'll be one of the first employees, then drop everything and join it. Look for a YC company with some impressive investors, and try to get 0.5% - 2%. But I've noticed that YC has started funding a lot of companies that seem pretty terrible, so you have to be very careful. Don't think of yourself as a employee. You're a VC who invests their time and energy. If the first one doesn't work out, then do it a couple more times. Work on your own side projects and see if any of those take off. The connections can be really valuable, and working at a startup is a great way to find future co-founders.
- dontjoin 8y ago
  Don't take this the wrong way, but you are living in a world of confirmation bias. There are 288 companies in the world with a valuation of > $1b [1]. There is most likely over 100 million companies in the world [2]. With these numbers in mind you will have a 0.000288% chance of joining a unicorn. Except, 50% of all new business fail within five years [3]. So, you will have a 0.000144% chance of joining a unicorn. My company is doing well (approaching $4m revenue). I have already hugely defied the odds. I am one of the sucessfull ones. My return for a 5 year investment will be $600k at best. My story is a VERY common one. Yours is impossibly uncommon. > My advice: If you can somehow spot a potential unicorn and you'll be one of the first employees, then drop everything and join it. The advice you are giving is for people to drop everything for a snowball's chance in hell. [1] https://www.weforum.org/agenda/2016/06/unicorns-do-exist-and-you-can-find-them-in-europe https://www.weforum.org/agenda/2016/06/unicorns-do-exist-and... [2] https://www.quora.com/How-many-companies-exist-in-the-world https://www.quora.com/How-many-companies-exist-in-the-world [3] https://www.inc.com/thomas-koulopoulos/5-of-the-most-surprising-statistics-about-start-ups.html https://www.inc.com/thomas-koulopoulos/5-of-the-most-surpris...

dojoin 8y ago

I had the opposite experience. I also joined a startup 5 years ago, and I was one of the very early employees. I received 0.5% equity as stock options, and my salary was around $120,000. I stayed for a few years, and now I own around 0.1%. The company is now worth a few billion dollars, so my stock is worth a few million dollars. I have no liquidity yet, but an IPO is certainly on the horizon. I don't feel like I took a pay cut. It was my first real job as a software engineer, and it gave me some good friendships and connections. I can't say I learned a lot, and I didn't grow very much. The work was very boring and there weren't any technical challenges or interesting problems. I just got very burned out with the long hours and pressure. But it was nice to live in the Bay Area for a little while and have the "silicon valley" experience. I got very lucky and might be able to retire in a couple of years, so of course I'm going to say that the risk was worth it. But I do realize that I'm an outlier. My advice: If you can somehow spot a potential unicorn and you'll be one of the first employees, then drop everything and join it. Look for a YC company with some impressive investors, and try to get 0.5% - 2%. But I've noticed that YC has started funding a lot of companies that seem pretty terrible, so you have to be very careful. Don't think of yourself as a employee. You're a VC who invests their time and energy. If the first one doesn't work out, then do it a couple more times. Work on your own side projects and see if any of those take off. The connections can be really valuable, and working at a startup is a great way to find future co-founders.

dontjoin 8y ago
Don't take this the wrong way, but you are living in a world of confirmation bias. There are 288 companies in the world with a valuation of > $1b [1]. There is most likely over 100 million companies in the world [2]. With these numbers in mind you will have a 0.000288% chance of joining a unicorn. Except, 50% of all new business fail within five years [3]. So, you will have a 0.000144% chance of joining a unicorn. My company is doing well (approaching $4m revenue). I have already hugely defied the odds. I am one of the sucessfull ones. My return for a 5 year investment will be $600k at best. My story is a VERY common one. Yours is impossibly uncommon. > My advice: If you can somehow spot a potential unicorn and you'll be one of the first employees, then drop everything and join it. The advice you are giving is for people to drop everything for a snowball's chance in hell. [1] https://www.weforum.org/agenda/2016/06/unicorns-do-exist-and-you-can-find-them-in-europe https://www.weforum.org/agenda/2016/06/unicorns-do-exist-and... [2] https://www.quora.com/How-many-companies-exist-in-the-world https://www.quora.com/How-many-companies-exist-in-the-world [3] https://www.inc.com/thomas-koulopoulos/5-of-the-most-surprising-statistics-about-start-ups.html https://www.inc.com/thomas-koulopoulos/5-of-the-most-surpris...