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So startup employees are wising up to the fact that options won't make them rich, and they're demanding market salaries? I see that as a good thing.
by gamble 16y ago
So startup employees are wising up to the fact that options won't make them rich, and they're demanding market salaries? I see that as a good thing.
- staunch 16y agoIt'd be better if startups responded by giving out more equity to employees.
- gamble 16y agoThere's a pretty hard limit to how many people can own 10%+ of a company. With the average exit around $12 million these days, a smaller share than that isn't going to amount to much after dilution, preferences, and taxes.
- staunch 16y agoA very quick check on CrunchBase of the (155) acquisitions (with known prices) since Jan 09 shows: average price $215M median price $80M. I think the average option pool is larger than 10% as well. In most cases there's plenty of money to go around when a company is successful. At least enough that the first dozen employees should make far more than they could have at a regular job.
- arethuza 16y agoSay the option pool is worth $21.5 million for a $215 million exit (it'll presumably be worth less than this but assume that cancels out that the pool may be larger than 10%). Assume that half the pool is given to the first ten employees - so that's about $1 million each. I know people in the software field who have "regular jobs" and earn ~$200K and have been for many years. So I would perhaps disagree with the assertion that being an employee in a successful startup means that you will make "far more" than is possible in a "regular job". Now this isn't to say that the startup would be a much more interesting experience - but in purely financial terms the rewards of a high earning "regular job" are comparable (and that is ignoring the risk profile of startups).