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In this particular scenario I'd be the second employee, not counting the two founders as employees. I did similar math as you said and I didn't find the number

In this particular scenario I'd be the second employee, not counting the two founders as employees. I did similar math as you said and I didn't find the numbers fair. I figured how much would I be losing per year at the current valuation and my pay cut seemed more than what the investors got for the last round. I wish there was more public information about startup salaries at various stages of employment, while the company is still a tiny company. Finding information about FANG salaries is so easy but startup salaries is tough.

qqqwerty 5y ago
Yeah, something to consider is that FAANG salaries are an outlier. There is a bimodal distribution in tech salaries. Outside of tier 1 unicorns, no one comes close to FAANG salary. So when evaluating your options, using FAANG salaries as a comparison might not be the most fair benchmark. For example if you work in biotech, even as a programmer, you are probably looking at a salary about half of what a FAANG will pay. This holds true for a lot of other industries. In general, I agree though. Early employees should either be compensated better or given more equity. In many cases, they have a more direct influence on the product than the founders, because the founders are focused on fundraising, sales, and hiring. And they also can have an outsized impact on company culture. If it was up to me, the first few hires would be getting 2-5% depending on experience, and I would even consider giving them a title of co-founder.
- novok 5y ago
  But negotiations are based on BATNA, and most of the better engineers you actually want to hire can also get hired at FANG. So even if 'FANG is an outlier', it doesn't matter because they set the standard. You have to be willing to do things that FANG is not, like real remote, employees that cannot immigrate (ex: no degree in developing nation) or no leet coding.

qqqwerty 5y ago

Yeah, something to consider is that FAANG salaries are an outlier. There is a bimodal distribution in tech salaries. Outside of tier 1 unicorns, no one comes close to FAANG salary. So when evaluating your options, using FAANG salaries as a comparison might not be the most fair benchmark. For example if you work in biotech, even as a programmer, you are probably looking at a salary about half of what a FAANG will pay. This holds true for a lot of other industries. In general, I agree though. Early employees should either be compensated better or given more equity. In many cases, they have a more direct influence on the product than the founders, because the founders are focused on fundraising, sales, and hiring. And they also can have an outsized impact on company culture. If it was up to me, the first few hires would be getting 2-5% depending on experience, and I would even consider giving them a title of co-founder.

novok 5y ago
But negotiations are based on BATNA, and most of the better engineers you actually want to hire can also get hired at FANG. So even if 'FANG is an outlier', it doesn't matter because they set the standard. You have to be willing to do things that FANG is not, like real remote, employees that cannot immigrate (ex: no degree in developing nation) or no leet coding.