6 ms·

Budget at least $80k/employee in payroll, benefits, insurance, and misc costs. (you'll have to budget more if you plan on hiring more experienced talent) Comp

by ctide 15y ago

Budget at least $80k/employee in payroll, benefits, insurance, and misc costs. (you'll have to budget more if you plan on hiring more experienced talent) Competent engineers are willing to get hired for what amounts to ~35k / year? .... What?

kapitti 15y ago
Came to post the exact same thing. With 20-30% going to insurance/benefits, taxes, misc costs - that's an amazingly low number....even more so considering they're in SF.
brandall10 15y ago
She did say employee, not engineer. Still low but I'd gather the equity share is good.
pagekalisedown 15y ago
Maybe she staffs up exclusively with H1Bs?
- yid 15y ago
  I realize your comment reflects economic reality, but that really came across as a little dehumanizing.
- davidu 15y ago
  If that were true, she'd preface it with a 1. H1Bs aren't CHEAPER they are way more expensive.
axiom 15y ago
I think their salaries are 60-65k. Insurance/benefits for 20 something developers at a startup consists of ramen and free pizza on Mondays. That's actually a very reasonable salary and keeps out the guys who are looking to collect fat paychecks working 35 hours/week. You want work/life balance and 100k+ per year? fine, go work at Google. If you want the upside that comes with working at a startup you need to be willing to take on some of the risk.
- timr 15y ago
  "That's actually a very reasonable salary and keeps out the guys who are looking to collect fat paychecks working 35 hours/week. You want work/life balance and 100k+ per year? fine, go work at Google. If you want the upside that comes with working at a startup you need to be willing to take on some of the risk." That's just a steaming pile of horseshit. I'm sorry to be so blunt, but I've been in this world for a while now, and nothing infuriates me more than when entrepreneurs try to delude employees (particularly younger employees) into working for far below market in exchange for promises of fairy farts and equity dreams. In a city where a one-bedroom apartment costs >$2,000 a month, $100k isn't a "fat" paycheck. It's right about average. And even if you choose to work below market, the <1% equity stake that most funded startups are going to offer you won't make it worth the opportunity cost in anything less than the most exceptional outcome. You say you're working for $60k a year in San Francisco? Yeah, I hope you're getting a founder-level equity, because you're living with roommates and eating ramen. I suppose the only plus side to this kind of nonsense is that any developer worth her salt will be poached within months by any one of the dozens of local startups that are looking for engineers and willing to pay market wages. Don't fall for it, kids: you deserve to be fairly paid, and get some equity.
  - alnayyir 15y ago
    >Don't fall for it, kids: you deserve to be fairly paid, and get some equity. I did, thanks for spreading the messages.
  - axiom 15y ago
    Funny how virtually zero successful startups have followed your model of paying people 100k+ at the beginning (first 1-2 years, pre-series A, or pre-profitability.) Probably just a coincidence though.
    - deleted 15y ago
      [deleted]
    - donw 15y ago
      Early-stage employees are often compensated with huge amounts of equity. I'm a fairly senior-level guy, and would happily trade a bigger salary for a large equity chunk at a startup, but we're talking a large chunk, bigger than a lot of companies are willing to give to non-founders. Let's say that I usually make $160k/year, and I'm willing to work for half that at a startup for four years, which means that I'm giving up $320k in income. I'm not going to do that for a chance at earning $320k, but I'll definitely do so for a 10% chance at earning $3.2M. Which means that if the company exits four years later at $50MM, I'd need a 6.4% equity stake to make my target. If the company exits for any less than $5M, I've lost money. Naturally, this is a simplified analysis of the situation, but it illustrates an important point. I know of a lot of startups that want to pay their employees peanuts, while at the same time giving them a tiny slice of the pie. None of these companies have been massively successful either, in part due to the best talent having zero interest in committing to a company where they aren't valued.
Aloisius 15y ago
I wish I could pay people that. I'm probably above $100k/employee in SF.
sudonim 15y ago
I found this statement pretty surprising. Maybe in the next step when it gets doubled, that's a more realistic number. $160k/employee? Either that or the only employee is an office admin?
rdl 15y ago
80k per developer is quite reasonable, exclusive of actual salary.
- rdl 15y ago
  (To clarify) 80k/yr total overhead for 18mo per employee, counting facilities, health care, direct and indirect costs, etc. You don't necessarily have to spend it, but I think it would be irresponsible to hire someone on a non-founder basis without having that kind of money available to back it up. If someone's willing to take a subsistence or below market salary, fine, but it should be explicit. I'd also be reluctant to hire any permanent employee without having at least 12mo of salary in the bank to pay him; 6mo might be ok if you disclose this to someone and let him make his own choice. It would suck to have a choice between startup and facebook, take the startup, then get laid off in six months. That is the kind of risk a founder should take, but not regular employees. If you can't cover salary, then contractor status makes more sense I think.
deleted 15y ago
[deleted]

by ctide 15y ago

kapitti 15y ago

Came to post the exact same thing. With 20-30% going to insurance/benefits, taxes, misc costs - that's an amazingly low number....even more so considering they're in SF.

brandall10 15y ago

She did say employee, not engineer. Still low but I'd gather the equity share is good.

pagekalisedown 15y ago

Maybe she staffs up exclusively with H1Bs?

yid 15y ago
I realize your comment reflects economic reality, but that really came across as a little dehumanizing.
davidu 15y ago
If that were true, she'd preface it with a 1. H1Bs aren't CHEAPER they are way more expensive.

axiom 15y ago

I think their salaries are 60-65k. Insurance/benefits for 20 something developers at a startup consists of ramen and free pizza on Mondays. That's actually a very reasonable salary and keeps out the guys who are looking to collect fat paychecks working 35 hours/week. You want work/life balance and 100k+ per year? fine, go work at Google. If you want the upside that comes with working at a startup you need to be willing to take on some of the risk.

timr 15y ago
"That's actually a very reasonable salary and keeps out the guys who are looking to collect fat paychecks working 35 hours/week. You want work/life balance and 100k+ per year? fine, go work at Google. If you want the upside that comes with working at a startup you need to be willing to take on some of the risk." That's just a steaming pile of horseshit. I'm sorry to be so blunt, but I've been in this world for a while now, and nothing infuriates me more than when entrepreneurs try to delude employees (particularly younger employees) into working for far below market in exchange for promises of fairy farts and equity dreams. In a city where a one-bedroom apartment costs >$2,000 a month, $100k isn't a "fat" paycheck. It's right about average. And even if you choose to work below market, the <1% equity stake that most funded startups are going to offer you won't make it worth the opportunity cost in anything less than the most exceptional outcome. You say you're working for $60k a year in San Francisco? Yeah, I hope you're getting a founder-level equity, because you're living with roommates and eating ramen. I suppose the only plus side to this kind of nonsense is that any developer worth her salt will be poached within months by any one of the dozens of local startups that are looking for engineers and willing to pay market wages. Don't fall for it, kids: you deserve to be fairly paid, and get some equity.
- alnayyir 15y ago
  >Don't fall for it, kids: you deserve to be fairly paid, and get some equity. I did, thanks for spreading the messages.
- axiom 15y ago
  Funny how virtually zero successful startups have followed your model of paying people 100k+ at the beginning (first 1-2 years, pre-series A, or pre-profitability.) Probably just a coincidence though.
  - deleted 15y ago
    [deleted]
  - donw 15y ago
    Early-stage employees are often compensated with huge amounts of equity. I'm a fairly senior-level guy, and would happily trade a bigger salary for a large equity chunk at a startup, but we're talking a large chunk, bigger than a lot of companies are willing to give to non-founders. Let's say that I usually make $160k/year, and I'm willing to work for half that at a startup for four years, which means that I'm giving up $320k in income. I'm not going to do that for a chance at earning $320k, but I'll definitely do so for a 10% chance at earning $3.2M. Which means that if the company exits four years later at $50MM, I'd need a 6.4% equity stake to make my target. If the company exits for any less than $5M, I've lost money. Naturally, this is a simplified analysis of the situation, but it illustrates an important point. I know of a lot of startups that want to pay their employees peanuts, while at the same time giving them a tiny slice of the pie. None of these companies have been massively successful either, in part due to the best talent having zero interest in committing to a company where they aren't valued.

Aloisius 15y ago

I wish I could pay people that. I'm probably above $100k/employee in SF.

sudonim 15y ago

I found this statement pretty surprising. Maybe in the next step when it gets doubled, that's a more realistic number. $160k/employee? Either that or the only employee is an office admin?

rdl 15y ago

80k per developer is quite reasonable, exclusive of actual salary.

rdl 15y ago
(To clarify) 80k/yr total overhead for 18mo per employee, counting facilities, health care, direct and indirect costs, etc. You don't necessarily have to spend it, but I think it would be irresponsible to hire someone on a non-founder basis without having that kind of money available to back it up. If someone's willing to take a subsistence or below market salary, fine, but it should be explicit. I'd also be reluctant to hire any permanent employee without having at least 12mo of salary in the bank to pay him; 6mo might be ok if you disclose this to someone and let him make his own choice. It would suck to have a choice between startup and facebook, take the startup, then get laid off in six months. That is the kind of risk a founder should take, but not regular employees. If you can't cover salary, then contractor status makes more sense I think.

deleted 15y ago

[deleted]