4 ms·

Ask HN: First Engineer at Seed-Stage Startup – Salary Advice?

• lettergram 8y ago
  IMO "Fair" is in the eye of the beholder. My guess, is if you're asking here - you don't think it's fair. ~$85k in the Bay Area isn't a ton of money. After dilution (post seed) 2% will be much smaller. If you're the only technical found and the only one who could build the product, I personally would ask for more. HOWEVER, if you think someone can do it other than you, you may not command such a deal. Regardless, I always focus just on the base salary. At ~$85k, I'm assuming they aren't covering healthcare, 401k, etc. That's maybe 35% - 50% (with benefits) less than you could get at a larger company. Do you think the companies worth it?
  • RightBack 8y ago
    Thanks for the input! I know fair is such a subjective word. The thing about being hard to replace is we are using a fairly popular stack (rails) that although I have deep product knowledge, it would be possible to find a replacement dev, but at what salary is another question. I actually get subsidized health care which is great, no 401k however. I do think the company will be successful, the magnitude of success is still to be determined, the size of my equity grant would require a pretty large exit for a reasonable payout.
• davismwfl 8y ago
  There is no normal honestly. Experience counts a lot and IMO the amount raised does as well along with your equity stake. Not knowing how much experience you have it is hard to say. You could be fair now or low or frankly high. Obviously for where you live I doubt you are overpaid. I will say this I don't think based on the very limited data that you are paid poorly for an early stage company. If you want to shoot me a personal email with more details (or post here) happy to give you a more detailed opinion. I myself am the CTO for a company that has raised and have been a founder myself a few times so I feel I am a fairly good judge on this stuff most of the time. BTW. There is nothing wrong with asking for a little more as the company hits certain milestones. Just be fair and honest.
  • RightBack 8y ago
    Thanks for the reply, I appreciate the honesty. I have added my experience to my post now. Some more info: We raised a ~$1m seed recently at a $6m post valuation. As I mentioned in my edit, I have ~3 years experience building web apps for startups and have definitely the experience, knowledge and responsibility of a mid-level engineer at a larger tech firm. I do really like working with our team and our product is solid, we're at the stage where the business will either thrive or die in the next 6-12 months.
    • davismwfl 8y ago
      Given all that, you are not being taken advantage of, although I could argue the equity to salary ratio is off, so either a little more salary or more equity. However, with only a $1M raise there isn't a lot of room to give you more salary, and I've seen really small employee equity pools in startups in the past few years so there may not be much there either. If the company had raised $3-5m then yea it isn't rare to see a CTO type in the mid to higher 100's, but then that person usually will have quite a bit more experience than you do. This isn't a knock against you in any way, this is just the realities of startups and business. While it is always fine to ask for a little more when certain events happen, like fundings, I don't think there is much room here for you to get any change. Although you might be able to negotiate $5-10k. You could angle for a bonus at a big milestone in the next 6-9 months, where 5-10k could be negotiated as a one-time bonus if you do well. That's easier on the business because it isn't an on-going operational cost and it can be justified by you doing something that really benefitted the business. Mind you it has to be more than you already promised or why would anyone agree to it. If you want/need to be in the six figures (we all have reasons for what we need/do), find a job at a larger company/startup, no faulting you in that if you have a need/want.
      • RightBack 8y ago
        I can see the approach of negotiating a bonus structure working. I posted the question to get closer to the truth, not boost my ego so I'm thankful for you calling it as it is.
• rboyd 8y ago
  At your stage it's exceedingly likely that 2% is much too low.
  • RightBack 8y ago
    What would be your hunch on a fair % ? also does the fact that I've worked with this deal for almost a year make it difficult for me to ask for more?
• deleted 8y ago
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• howon92 8y ago
  I think you might be getting too little. It's common to get 200k+ in Bay area with your level of experience. That doubles once you become senior (usually 3-6 YOE). So think about how much less you are getting paid by working there and see how much of that delta makes sense for the amount of learning you get. As a first engineer, you have a much bigger scope, unique opportunities, a chance to network, etc. Think about how much that's worth. Sometimes, it might not even be true that you are learning more at a startup and just overworking. So do your own cost-benefit analysis carefully and ask for a raise you think is reasonable bases on the market rate and the amount of unique learning you get from your company.
  • sethammons 8y ago
    1 year "real" experience equates to $200k?
• mchannon 8y ago
  Regarding "thrive or die", the usual case is neither. The usual case is "zombie", continuing along, surviving, but failing to really get ahead. In many ways it's worse than thriving or dying, since at least dying frees you up to get a fresh crack at things. With a company woodpile of $1M to burn and a stake that's currently worth $300k in Powerball tickets (eventually to be $1.2M in Powerball tickets if you keep working there), you could be doing worse. But you're not doing that well. Consider getting a job at a BigCo in the bay from here on out. $185k + stock options that you can actually turn into cash seems very possible. Your current company with only $1M in the pile is not going to be able to move your needle all that far from the vow of poverty you took, not without raising more money or bringing in substantial revenue. In many ways, I would argue it's already failed if you're not in the chips after a year. You've met your cliff, so you can take the money and run, so if somehow the company makes a $100B valuation, keeping your 0.5% on top of a decent salary elsewhere seems substantially less risky than grinding poverty to raise the number past 1%. It's not about what's "fair", it's about what's possible. Your boss will tell you his hands are tied when it comes to bumping you into the six figures. If you don't want to "break up the band", and you want to "see things through", and you can tolerate continued poverty, then I submit to you you don't need to ask for a pay increase. Otherwise, it's not your boss you should be asking, but a competing company. Silicon Valley VC's aren't the only ones selling dollar bills for fifty cents.
  • RightBack 8y ago
    I have considered exercising my options and leaving after the 1 yr mark and headed to a larger co. my distaste for large organizations complicates this slightly. re current valuation of stock options: the math is off by a factor of 10, 2% of 6m is $120k - does this change things in your eyes?
    • aey 8y ago
      If you are planning for sticking around another year, ask for more stock, double it! They can’t double your salary, so you are not missing out on a meaningful opportunity cost of capital. Right now your best bet to increase your grant as high as you can until the A round. After A the options will be too expensive to excersize until a liquidity event.
• pryelluw 8y ago
  A salary is not about fairness. What is the market rate for someone with your skills, experience, and credentials? Look it up. If it turns out you are being underpaid, why should you continue to work at a discount? Also, the stock options are worthless. They are not something to count on as having real value. They are a bet you have taken. Pure speculation.
  • RightBack 8y ago
    Very good point on market rate, one thing I've struggled with is getting accurate salary info for early stage startups, it's pretty easy to find rates for the FAANG companies which are noticeably higher than the rest of the market. Have you any resources you would recommend I look at?
    • pryelluw 8y ago
      I have plenty of experience in the startup world. Here is my take around salaries: - You will be pressured into taking less. That's normal founder hustle. - A founder is the one taking the risk, not you. Thats why stocks are worthless to you. Dont drink the "we are in this together" bs. You are not. If you were, then youd be a co-founder. - You wont find startup salary data. However, it is typically less than an established company. Why? because they cant afford it. Startups have runway, which is how much money they have to try and make it (survive). In contrast, an established company has a budget, which is how much money they have for a period of time (they dont need to survive). - Always ask market rate based on an average of published data. My take is you should be closer to $120k in SF (if not more). - The fact that you are being underpaid just shows how skewed your sense of fairness currently is. They didn't care about fairness when your offer came through. They only cared about how much they can afford to pay you to avoid losing you. You are the one who decided what was fair. You alone. Thats why you have the power to decide it is not fair anymore and move on. - Start shopping around this very moment. Dont think options are scarce. This is a developers market. - You manage two people and have a masters. Dude! You are a technical lead. Open your eyes! Technical leads make more than a regular developer (senior or not). It also makes youna senior dev ...