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Even when they’re not worthless, most startup options end up being worth less than the salary that one could’ve gotten at a non-startup. Last time I looked int
by ashtonkem 6y ago
Even when they’re not worthless, most startup options end up being worth less than the salary that one could’ve gotten at a non-startup. Last time I looked into it, and it was a while ago, the median startup option package was exercised for a profit of $30k, not nothing but far less than what one could’ve gotten at a large company like ... Microsoft.
Arguably the existence of several different types of stock options has broken the startup option system, incentivizing founders to play financial games with dilution and debt, and separating their incentive structure from that of their workers. Instead they now get paid with the VCs, which is bad for the workers.
Nothing is worth working like a dog though. That’s always a bad trade.
- BurningFrog 6y ago> the median startup option package was exercised for a profit of $30k That must be one of those cases where "median" and "average" are very different.
- onion2k 6y agoWhich is exactly why you should look at the median.
- BurningFrog 6y agoThe median won't tell you the difference between 20% chance of making $1k and $1M.
- lotsofpulp 6y agoThere are many different kinds of averages. Median average, arithmetic mean average, geometric mean average, mode average. People frequently, and intentionally when it comes to politics, use the word average to muddy the information and evoke whatever emotion they want rather than specify the type of average.
- htrp 6y ago^ This guy stats... In non normally distributed populations, the average is misleading because of skew at either end of the curve.
- fallingknife 6y agoAre you sure that's the median? I would think that they are worth 0 >50% of the time.
- scruple 6y ago> most startup options end up being worth less than the salary that one could’ve gotten at a non-startup I took a lower salary to work at a startup I "believed" in. We were eventually acquired and my options were in the low six-figures when exercised. I worked there for 6 years. If I average the options profit and add it to my base salary, I'd have still been underpaid in the local area for my skills and experience level. And that's to say nothing of what the event did to my taxes that year. > Nothing is worth working like a dog though. That’s always a bad trade. I never worked like a dog for the place in my story, at least. It had a very sane work/life balance.
- ashtonkem 6y ago> I never worked like a dog for the place in my story, at least. It had a very sane work/life balance. For sure not every single startup overworks it’s employees, and not every overworked employee works at a startup. But there is a very common (but not universal!) trend for startup employees to be encouraged to overwork themselves so that their options will be worth more in the long run. Your mileage may vary, as yours did.
- Kranar 6y agoI don't know how common it actually is. You hear about the startups that overwork employees far more than you hear about startups where people have a good work life balance, but there could be many reasons including the big one being that happy people who live well balanced lives don't tend to talk about it.
- solidasparagus 6y agoStartups tend to have poor engineering management (due to lack of time and experience) and that can easily lead to overworking employees.
- hinkley 6y agoIf you include wear and tear in that calculation, then it’s definitely true. A couple years of austerity and socking a bigger salary into investments is less stressful and a surer bet, even if it pays off less some of the time.