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"Now you’re kicked to the curb with no/bad equity" - where did this come from? In this situation, in which you've done such a good job that the company has effe

"Now you’re kicked to the curb with no/bad equity" - where did this come from? In this situation, in which you've done such a good job that the company has effectively outgrown your skillset, you almost certainly have equity (it's unlikely this all happened in <1 year) and it's almost certainly good equity. That's one of the reasons this isn't so bad, and to a degree you should be okay with it - you're a part owner of the company, and especially if you were an early exec, you probably have a meaningful amount of equity. If someone else can help grow the value of your equity significantly faster than you can, that's a good thing for you.

dkural 6y ago
If it is not RSUs - and just options, and you have 3 months to decide if to exercise your options with a bunch of $$, when co is years away from IPO... for most, it means walking away from the equity.
- awillen 6y ago
  That's a situation that you should expect to end up in if you join an early stage startup - most people at the series A/B aren't there at the IPO. You can make the choice as to whether to take the risk, or you can seek out a company that will provide you the upfront cash needed to exercise in exchange for a significant portion of the upside if a liquidity event happens.
rabidrat 6y ago
If you are not a founder, you have <5% options (likely <1%) which are not preferred and if you are no longer with the company, they will be diluted with every funding round and restructuring. You will have no control over this. This is "no/bad equity".
- awillen 6y ago
  Of course you're going to be diluted - that'll happen whether you're at the company or not. Obviously you'll get refresher grants if you stay, but in this case if you leave you can go somewhere else and get equity there, so you're not necessarily losing out (and in fact you're diversifying). If you think that dilution means that you have bad equity, you should never join an early stage startup in the first place. Dilution is going to happen, but it's not inherently a bad thing - your piece of the pie is getting smaller, but if it's because the company's growing very quickly, the value of your shares are going up. The percentage of equity you hold isn't what matters - the value is.
  - peteradio 6y ago
    You are making some strong claims when this is very dependent on the exact scenario. My bet would be that you don't want to be replaceable because if you don't hold out to the IPO, the startup (and any new partnership they make) have every incentive to claw back as much money as possible. They could do this even if you stay but when you stay you need to be assertive enough to defend your position. I don't know how well everybody does at asserting their position from a technical role when you aren't in the room where the decision making happens. The only way I'd ever work at a startup with the goal of making a bunch of money based off of those shares is if I absolutely knew they couldn't and wouldn't fuck me over. I have no faith in any person in this world apart from very few. I would rather "grind" for the money i.e. work 8hr days and make it to my money goals quicker than 99% of the outcomes of choosing the startup path. That said, you can get good experience but the most important experience you get is knowing where you stand in any organization.
    - awillen 6y ago
      That's a fair point of view, but to your point, you're not going to work at a startup with the goal of making a bunch of money from shares, so you're probably not the target audience for this post.
      - peteradio 6y ago
        I suppose you might think my comments off topic? I'd make a similar comment on a post titled "The Hardest Part of Investing in a Ponzi scheme or "The Hardest Part of buying a car to work for Uber" or "The Hardest Part of Selling for Amway". The statement itself is a deception, because the answer to the easy question for 99% is don't fucking do it.
peteradio 6y ago
Does your equity grow when you leave the company or does it in fact shrink? This probably depends on the exact structure but I wonder what a survey of startups would say about how most startups behave.
- awillen 6y ago
  If things go well, your percentage ownership shrinks but the value of your equity grows.
Aeolun 6y ago
> If someone else can help grow the value of your equity significantly faster than you can, that's a good thing for you. Only if you care more about money than professional growth.

dkural 6y ago

If it is not RSUs - and just options, and you have 3 months to decide if to exercise your options with a bunch of $$, when co is years away from IPO... for most, it means walking away from the equity.

awillen 6y ago
That's a situation that you should expect to end up in if you join an early stage startup - most people at the series A/B aren't there at the IPO. You can make the choice as to whether to take the risk, or you can seek out a company that will provide you the upfront cash needed to exercise in exchange for a significant portion of the upside if a liquidity event happens.

rabidrat 6y ago

If you are not a founder, you have <5% options (likely <1%) which are not preferred and if you are no longer with the company, they will be diluted with every funding round and restructuring. You will have no control over this. This is "no/bad equity".

awillen 6y ago
Of course you're going to be diluted - that'll happen whether you're at the company or not. Obviously you'll get refresher grants if you stay, but in this case if you leave you can go somewhere else and get equity there, so you're not necessarily losing out (and in fact you're diversifying). If you think that dilution means that you have bad equity, you should never join an early stage startup in the first place. Dilution is going to happen, but it's not inherently a bad thing - your piece of the pie is getting smaller, but if it's because the company's growing very quickly, the value of your shares are going up. The percentage of equity you hold isn't what matters - the value is.
- peteradio 6y ago
  You are making some strong claims when this is very dependent on the exact scenario. My bet would be that you don't want to be replaceable because if you don't hold out to the IPO, the startup (and any new partnership they make) have every incentive to claw back as much money as possible. They could do this even if you stay but when you stay you need to be assertive enough to defend your position. I don't know how well everybody does at asserting their position from a technical role when you aren't in the room where the decision making happens. The only way I'd ever work at a startup with the goal of making a bunch of money based off of those shares is if I absolutely knew they couldn't and wouldn't fuck me over. I have no faith in any person in this world apart from very few. I would rather "grind" for the money i.e. work 8hr days and make it to my money goals quicker than 99% of the outcomes of choosing the startup path. That said, you can get good experience but the most important experience you get is knowing where you stand in any organization.
  - awillen 6y ago
    That's a fair point of view, but to your point, you're not going to work at a startup with the goal of making a bunch of money from shares, so you're probably not the target audience for this post.
    - peteradio 6y ago
      I suppose you might think my comments off topic? I'd make a similar comment on a post titled "The Hardest Part of Investing in a Ponzi scheme or "The Hardest Part of buying a car to work for Uber" or "The Hardest Part of Selling for Amway". The statement itself is a deception, because the answer to the easy question for 99% is don't fucking do it.

peteradio 6y ago

Does your equity grow when you leave the company or does it in fact shrink? This probably depends on the exact structure but I wonder what a survey of startups would say about how most startups behave.

awillen 6y ago
If things go well, your percentage ownership shrinks but the value of your equity grows.

Aeolun 6y ago

> If someone else can help grow the value of your equity significantly faster than you can, that's a good thing for you. Only if you care more about money than professional growth.