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This was how you could get rich. Maybe I'm overly cynical, but I feel that these days VC and founders know all the right tricks to play to remove value from th

This was how you could get rich. Maybe I'm overly cynical, but I feel that these days VC and founders know all the right tricks to play to remove value from the contributors and reallocate it to the investors.

bluefirebrand 5y ago
Yeah, staff does not get big payouts anymore because investors want that money. If you're a founder you might get rich
- argc 5y ago
  What do you mean by big payout in this context?
  - bluefirebrand 5y ago
    Enough to retire early.
    - edmundsauto 5y ago
      I think this is around $2M in the US, using what the FIrE community says. Does that seem reasonable, Or are you thinking about $20M+ payouts? (That’s what I would need to retire now.)
      - bluefirebrand 5y ago
        "retire early" does not necessarily have to mean "retire tomorrow", I guess it depends how old you are. If you're in your 20s or 30s, 2M is probably not "retire tomorrow" money, but it would probably let you retire very early if you managed it and made smart investments with it. Maybe I'm wrong but I don't think many ICs are getting even 50k from startup equity, nevermind 2M. 20M is "retire tomorrow" money for sure. And definitely workers do not get that kind of money from startup equity. Most of what I hear now is companies giving fake "shares" that are ostensibly tied to the value of the company but are not actually shares and do not represent any ownership. If they do give shares it's not enough to pay out big, and they get diluted repeatedly over time.
        dreyfan 5y ago
        > Most of what I hear now is companies giving fake "shares" Yep. It's a thing unfortunately: https://en.wikipedia.org/wiki/Phantom_stock https://en.wikipedia.org/wiki/Phantom_stock
      - antupis 5y ago
        2M is 140k$ yearly with 7% return. You could live very comfortably almost every where.
        nvarsj 5y ago
        If you can manage a consistent 7% return then you should be running a hedge fund.
        antupis 5y ago
        1. you personal savings are more volatile tolerant than big pension funds. SP500 annual avg growth is 10% so you can almost achieve that 7% if you deploy 50/50 split to sp500 index + 30 year t-bonds. 2. It is magnitude more easier to deploy 2 million dollars to market than 2 billion dollars.
        ryandrake 5y ago
        If you can offer me a consistent, risk-free 7% return in perpetuity, I will give you all of my money today.
- yibg 5y ago
  Plenty of staff got rich from the Uber / Airbnb / snowflake etc IPOs though.
  - lelanthran 5y ago
    > Plenty of staff got rich from the Uber / Airbnb / snowflake etc IPOs though. GP said "anymore", so I assume he was talking about newer startups.
    - yibg 5y ago
      A lot of the recent IPOs are pretty big, and while I don’t have insider info I assume at least the early employees did well. Robinhood, snowflake, UiPath, Toast, Roblox, Coinbase etc. we are not short of large tech IPOs.
ryan_lane 5y ago
Nope. You can still get rich from equity, especially by being an early employee. It's all a giant lottery though. The easiest way is to join companies that are obviously doing well and will likely IPO in 2-3 years. This is still a lottery, but one with much higher odds and a lower potential payout. You can make $600k-1m every few years in equity alone by hopping around these companies. If you ever wondered why so many people have ~1-2 years of experience at each company on their resume, this is often why. They join, get a decent chunk of their equity grant (in RSUs), then go to another company to get more equity. Some of these companies will do well, others will do poorly. You end up distributing your risk and ensuring you'll get a decent payout.
- mooreds 5y ago
  How do you get RSUs if the company hasn't IPOed? I thought that RSUs were limited to public companies (since they are essentially grants of stock, not options).
  - dreyfan 5y ago
    You can get RSUs and RSAs from a private company, it's just often undesirable because you pay income tax on the valuation of the shares vested but you can't sell your shares until a liquidity event or IPO.
    - xur17 5y ago
      Some employers will structure these as double trigger RSUs that do not vest until a date passes + a liquidity event occurs to avoid this.
      - sillysaurusx 5y ago
        I had no idea that you can get RSUs this way. Does anyone have any suggestions on what to search for related to this? Part of why I wanted to be a contractor was precisely because I didn’t want to play the startup lottery. But RSUs would give an alternative.
deleted 5y ago
[deleted]

bluefirebrand 5y ago

Yeah, staff does not get big payouts anymore because investors want that money. If you're a founder you might get rich

argc 5y ago
What do you mean by big payout in this context?
- bluefirebrand 5y ago
  Enough to retire early.
  - edmundsauto 5y ago
    I think this is around $2M in the US, using what the FIrE community says. Does that seem reasonable, Or are you thinking about $20M+ payouts? (That’s what I would need to retire now.)
    - bluefirebrand 5y ago
      "retire early" does not necessarily have to mean "retire tomorrow", I guess it depends how old you are. If you're in your 20s or 30s, 2M is probably not "retire tomorrow" money, but it would probably let you retire very early if you managed it and made smart investments with it. Maybe I'm wrong but I don't think many ICs are getting even 50k from startup equity, nevermind 2M. 20M is "retire tomorrow" money for sure. And definitely workers do not get that kind of money from startup equity. Most of what I hear now is companies giving fake "shares" that are ostensibly tied to the value of the company but are not actually shares and do not represent any ownership. If they do give shares it's not enough to pay out big, and they get diluted repeatedly over time.
      - dreyfan 5y ago
        > Most of what I hear now is companies giving fake "shares" Yep. It's a thing unfortunately: https://en.wikipedia.org/wiki/Phantom_stock https://en.wikipedia.org/wiki/Phantom_stock
    - antupis 5y ago
      2M is 140k$ yearly with 7% return. You could live very comfortably almost every where.
      - nvarsj 5y ago
        If you can manage a consistent 7% return then you should be running a hedge fund.
        antupis 5y ago
        1. you personal savings are more volatile tolerant than big pension funds. SP500 annual avg growth is 10% so you can almost achieve that 7% if you deploy 50/50 split to sp500 index + 30 year t-bonds. 2. It is magnitude more easier to deploy 2 million dollars to market than 2 billion dollars.
        ryandrake 5y ago
        If you can offer me a consistent, risk-free 7% return in perpetuity, I will give you all of my money today.
yibg 5y ago
Plenty of staff got rich from the Uber / Airbnb / snowflake etc IPOs though.
- lelanthran 5y ago
  > Plenty of staff got rich from the Uber / Airbnb / snowflake etc IPOs though. GP said "anymore", so I assume he was talking about newer startups.
  - yibg 5y ago
    A lot of the recent IPOs are pretty big, and while I don’t have insider info I assume at least the early employees did well. Robinhood, snowflake, UiPath, Toast, Roblox, Coinbase etc. we are not short of large tech IPOs.

ryan_lane 5y ago

Nope. You can still get rich from equity, especially by being an early employee. It's all a giant lottery though. The easiest way is to join companies that are obviously doing well and will likely IPO in 2-3 years. This is still a lottery, but one with much higher odds and a lower potential payout. You can make $600k-1m every few years in equity alone by hopping around these companies. If you ever wondered why so many people have ~1-2 years of experience at each company on their resume, this is often why. They join, get a decent chunk of their equity grant (in RSUs), then go to another company to get more equity. Some of these companies will do well, others will do poorly. You end up distributing your risk and ensuring you'll get a decent payout.

mooreds 5y ago
How do you get RSUs if the company hasn't IPOed? I thought that RSUs were limited to public companies (since they are essentially grants of stock, not options).
- dreyfan 5y ago
  You can get RSUs and RSAs from a private company, it's just often undesirable because you pay income tax on the valuation of the shares vested but you can't sell your shares until a liquidity event or IPO.
  - xur17 5y ago
    Some employers will structure these as double trigger RSUs that do not vest until a date passes + a liquidity event occurs to avoid this.
    - sillysaurusx 5y ago
      I had no idea that you can get RSUs this way. Does anyone have any suggestions on what to search for related to this? Part of why I wanted to be a contractor was precisely because I didn’t want to play the startup lottery. But RSUs would give an alternative.

deleted 5y ago

[deleted]