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I think this is a really good argument as why graduated corporate taxes really need to be increased in the US. I'd be curious how productive you felt at each p

by munk-a 7y ago

I think this is a really good argument as why graduated corporate taxes really need to be increased in the US. I'd be curious how productive you felt at each position and if you think the FAANG job is more difficult and stressful. I'd like to think that no matter which of these paths we chose - the more stressful and risky life or the more secure and corporate FAANG one - we'd all have a chance to live a decent life. I really enjoy working at a small company and we make a notable impact on society, but the money will never approach FAANG levels.

fatnoah 7y ago
> I'd be curious how productive you felt at each position I definitely felt "more productive" at startups since my work felt like it had a bigger impact to the company. > and if you think the FAANG job is more difficult and stressful. So far, it feels no more difficult and is stressful in a different way. With a startup, there's the stress of worrying about the company going under. At the FAANG, there's the stress of performing at a high enough level to justify the compensation.
walshemj 7y ago
I think you need to reform employee stock options - in the UK there are far less possibilities to screw employees over stock options.
- munk-a 7y ago
  Absolutely, stock options in the US are super strange, they can be performance tied and for non-qualified shares. The thing I'd actually like to see is a better default governance for companies - companies are wholly owned by founders and I think there is just something fundamentally wrong with treating all employees as contractors by default until it's decided to grant them options or actual ownership. A bunch of people gather together and build a thing - why is the first person to the table the person who takes home all the profit? Sure employees are technically signing away their rights by agreeing to work without being compensated with a portion of their work, but it'd be really hard to actually pursue proportional ownership in the current labour market.
  - dcow 7y ago
    This. There is really no reason a founder deserves as much equity as they generally give themselves (I know the investors also have a say in what an acceptable cap table looks like so it’s not just on founders). If early stage startup founders split equity more evenly I think the numbers would start to make more sense. Maybe like 10% founder, 5% first 5, 2.5% next 5, and then 15% equity pool as you grow from 10 to 50. And that still leaves you with half your company left to raise capital with. Then there’s advisors and execs. You can enter into an A stage startup as an exec or an advisor and generally expect ~1% equity post dilution. This easily eclipses all but the first few early employees who have been working their asses off with much less comp for a much longer time. Maybe really good execs and advisors are game changers but I haven’t seen it play out in practice. More often than not success of the early few hides failure of the new leadership to do anything remotely resembling what they’re paid so preciously to do. So in the current market the only valuable part of working at a small gig becomes the alignment of risk profiles and consequential networking, and the do or die environment that accompanies an 18 month runway. I think these are good experiences for anybody to have at some point in their career. But since most people are rational they look at the numbers and it just doesn’t add up.
    - manigandham 7y ago
      "deserve" doesn't really mean anything. As for why founders get the most equity, it comes down to the most risk. They have the most to lose and are usually are paid last compared to employees who get cash and benefits. It's easy to claim the profits and yet ignore all the risks and losses incurred by founders. I've yet to see someone who thinks otherwise actually go out and start a company. Perhaps it's because the calculus changes when it's your business and livelihood on the line.
      - dcow 7y ago
        “Deserve“ absolutely means exactly what it means. I’m talking about the equity distribution sub-10 here. What sub-10 employees are getting any more benefits than their founder(s)? Maybe marginally more cash but it’s all still below market so it doesn’t really matter. But most founders I’ve encountered are actually paying themselves more than their early employees because they have to in order to maintain their lifestyle in big city. But they also have remarkably disproportional slices of equity. If a founder is investing large sums of their own cash it’s because they have that luxury. And I don’t think that’s actually very common. More often a founder drops some sweat and cash to incorporate and then maybe isn’t getting paid much while they pitch for seed capital but they’re doing so because they can’t afford to take no salary for very long. Even if you occasionally do see founders who’ve “killed” themselves for their cause, most of the founders I’ve encountered actually come out of cushy jobs where they essentially moonlit as a founder until they met someone willing to blow a few MM their way. In my opinion this type of story does not justify such disproportional equity distribution. At this point I honestly think telling founders that they take on so much risk and should retain such a large portion of their company because they did all the hard work is a somewhat subversive tactic used by investors who want to retain control over their investments. It’s a lot easier to reason with a single founder than 5 large equity holders. I think founders deserve a lot. I don’t think the typical founder deserves 10 times the equity of sub-10 employees. I think you’d see more people willing to join early stage companies if the attitude around equity shifted.
jorblumesea 7y ago
I really think the issue is that many startups don't offer alternative compensation and don't play to their strengths. You can be compensated in other ways, but often I've found much of the work at startups can be no more interesting than their Big N counterparts. Your career growth might also be similar. In theory, for startups, you sacrifice pay for other facets. The reality is quite different. The work might be similar but you're paid 50-75% of your peers. That was my experience in startup land, at least. Few good challenges or career growth and half of what I felt like I was worth.
- dd36 7y ago
  I’m intrigued by your idea of alternative compensation. Care to expand? Are you thinking like bonuses for growth? Deferred bonuses?
  - Hermitian909 7y ago
    Not OP but I've been thinking about this as cofounder of a "hard tech" company. If we live long enough that we're in a position to hire real talent we can't compete on total yearly comp. The business just won't be able to afford a 500k a year engineer for years. However right now FAANG companies generally do not offer either the following: - Reduced work weeks - Remote work I've talked to several staff and principle engineers who've told me that for the right company they'd take a massive paycut to work remotely 3-4 days a week. I've had the opportunity to work a 3 day week while making enough to support myself and I have to say, it's incredibly freeing. I don't think this is a sensible offering for anything below a Staff engineer, but it could be a promising path to get truly top talent.
    - discordance 7y ago
      I work at one of the FAANGMs and my group of about 700 engineers are all allowed to be 100% remote if they want to be. It’s actually promoted by our leadership.
      - mlvljr 7y ago
someguydave 7y ago
No it’s a good argument for eliminating corporate tax- no matter what the level it hits entrepreneurs the hardest.
- jasonsamoa 7y ago
  This. In my experience, the burden of taxes and regulations are most felt by new entrepreneurs and smaller organizations.

by munk-a 7y ago

fatnoah 7y ago

> I'd be curious how productive you felt at each position I definitely felt "more productive" at startups since my work felt like it had a bigger impact to the company. > and if you think the FAANG job is more difficult and stressful. So far, it feels no more difficult and is stressful in a different way. With a startup, there's the stress of worrying about the company going under. At the FAANG, there's the stress of performing at a high enough level to justify the compensation.

walshemj 7y ago

I think you need to reform employee stock options - in the UK there are far less possibilities to screw employees over stock options.

munk-a 7y ago
Absolutely, stock options in the US are super strange, they can be performance tied and for non-qualified shares. The thing I'd actually like to see is a better default governance for companies - companies are wholly owned by founders and I think there is just something fundamentally wrong with treating all employees as contractors by default until it's decided to grant them options or actual ownership. A bunch of people gather together and build a thing - why is the first person to the table the person who takes home all the profit? Sure employees are technically signing away their rights by agreeing to work without being compensated with a portion of their work, but it'd be really hard to actually pursue proportional ownership in the current labour market.
- dcow 7y ago
  This. There is really no reason a founder deserves as much equity as they generally give themselves (I know the investors also have a say in what an acceptable cap table looks like so it’s not just on founders). If early stage startup founders split equity more evenly I think the numbers would start to make more sense. Maybe like 10% founder, 5% first 5, 2.5% next 5, and then 15% equity pool as you grow from 10 to 50. And that still leaves you with half your company left to raise capital with. Then there’s advisors and execs. You can enter into an A stage startup as an exec or an advisor and generally expect ~1% equity post dilution. This easily eclipses all but the first few early employees who have been working their asses off with much less comp for a much longer time. Maybe really good execs and advisors are game changers but I haven’t seen it play out in practice. More often than not success of the early few hides failure of the new leadership to do anything remotely resembling what they’re paid so preciously to do. So in the current market the only valuable part of working at a small gig becomes the alignment of risk profiles and consequential networking, and the do or die environment that accompanies an 18 month runway. I think these are good experiences for anybody to have at some point in their career. But since most people are rational they look at the numbers and it just doesn’t add up.
  - manigandham 7y ago
    "deserve" doesn't really mean anything. As for why founders get the most equity, it comes down to the most risk. They have the most to lose and are usually are paid last compared to employees who get cash and benefits. It's easy to claim the profits and yet ignore all the risks and losses incurred by founders. I've yet to see someone who thinks otherwise actually go out and start a company. Perhaps it's because the calculus changes when it's your business and livelihood on the line.
    - dcow 7y ago
      “Deserve“ absolutely means exactly what it means. I’m talking about the equity distribution sub-10 here. What sub-10 employees are getting any more benefits than their founder(s)? Maybe marginally more cash but it’s all still below market so it doesn’t really matter. But most founders I’ve encountered are actually paying themselves more than their early employees because they have to in order to maintain their lifestyle in big city. But they also have remarkably disproportional slices of equity. If a founder is investing large sums of their own cash it’s because they have that luxury. And I don’t think that’s actually very common. More often a founder drops some sweat and cash to incorporate and then maybe isn’t getting paid much while they pitch for seed capital but they’re doing so because they can’t afford to take no salary for very long. Even if you occasionally do see founders who’ve “killed” themselves for their cause, most of the founders I’ve encountered actually come out of cushy jobs where they essentially moonlit as a founder until they met someone willing to blow a few MM their way. In my opinion this type of story does not justify such disproportional equity distribution. At this point I honestly think telling founders that they take on so much risk and should retain such a large portion of their company because they did all the hard work is a somewhat subversive tactic used by investors who want to retain control over their investments. It’s a lot easier to reason with a single founder than 5 large equity holders. I think founders deserve a lot. I don’t think the typical founder deserves 10 times the equity of sub-10 employees. I think you’d see more people willing to join early stage companies if the attitude around equity shifted.

jorblumesea 7y ago

I really think the issue is that many startups don't offer alternative compensation and don't play to their strengths. You can be compensated in other ways, but often I've found much of the work at startups can be no more interesting than their Big N counterparts. Your career growth might also be similar. In theory, for startups, you sacrifice pay for other facets. The reality is quite different. The work might be similar but you're paid 50-75% of your peers. That was my experience in startup land, at least. Few good challenges or career growth and half of what I felt like I was worth.

dd36 7y ago
I’m intrigued by your idea of alternative compensation. Care to expand? Are you thinking like bonuses for growth? Deferred bonuses?
- Hermitian909 7y ago
  Not OP but I've been thinking about this as cofounder of a "hard tech" company. If we live long enough that we're in a position to hire real talent we can't compete on total yearly comp. The business just won't be able to afford a 500k a year engineer for years. However right now FAANG companies generally do not offer either the following: - Reduced work weeks - Remote work I've talked to several staff and principle engineers who've told me that for the right company they'd take a massive paycut to work remotely 3-4 days a week. I've had the opportunity to work a 3 day week while making enough to support myself and I have to say, it's incredibly freeing. I don't think this is a sensible offering for anything below a Staff engineer, but it could be a promising path to get truly top talent.
  - discordance 7y ago
    I work at one of the FAANGMs and my group of about 700 engineers are all allowed to be 100% remote if they want to be. It’s actually promoted by our leadership.
    - mlvljr 7y ago

someguydave 7y ago

No it’s a good argument for eliminating corporate tax- no matter what the level it hits entrepreneurs the hardest.

jasonsamoa 7y ago
This. In my experience, the burden of taxes and regulations are most felt by new entrepreneurs and smaller organizations.