4 ms·
Agreed - Silicon Valley exists in part because of 500k-5M$ payouts to employees happening all of the time from private options. Not trying to value that is a m
by gonehome 5y ago
Agreed - Silicon Valley exists in part because of 500k-5M$ payouts to employees happening all of the time from private options.
Not trying to value that is a mistake.
- m_ke 5y agoThat's the myth that keeps the whole thing going. For every successful exit that makes employees rich there's a 100 failures and acquihires. You should judge these deals based on expected value.
- SavantIdiot 5y agoExactly! The failure rate of startups hasn't moved out of the 90% range ... ever. https://www.failory.com/blog/startup-failure-rate https://www.failory.com/blog/startup-failure-rate
- tashoecraft 5y agoAnd if you do happen to be part of the 10% that make it odds are you won’t get paid out as much as if you had just gone and worked for a FAANG.
- SavantIdiot 5y agoYeah, and once it starts to boom, the dilution of shares is crazy because the investors start to pile into their pool (which is also your pool if you're an employee). Founders shares are really the only good ones, because that pool doesn't dilute the more money they raise. I'm not sure if this is always true but when I started contracting for startups I hear a lot about this.
- m_ke 5y agoEven the ones that don't fail usually don't work out that well for employees because of liquidation preferences. It only takes one down round or mildly successful acquihire to wipe out employees.
- paxys 5y ago> You should judge these deals based on expected value. Which is what all the comments you are replying to are saying. However the expected value isn't automatically $0 as the article suggests. You can apply a fair bit of your own judgement.
- m_ke 5y agoIt's close enough to 0 to be a rounding error. Even some of the recent unicorn IPOs didn't return enough for employees to offset what they could have made working at FAANG. https://www.teamblind.com/post/IPO-millionaires-Y7ak8UpJ https://www.teamblind.com/post/IPO-millionaires-Y7ak8UpJ
- gonehome 5y agoBefore Facebook was the F in FAANG it was a private company (as were the others obviously). The IPO was only in 2012 - a large number of people became millionaires. The same was true for Snapchat, Asana, Roblox, etc. The same will be true for Stripe, Robinhood, and others. A subset of those people go on to become angel investors themselves. FAANG pays a lot and there are outliers, but most FAANG employees are not clearing >2M. People at Snap made >20M. I’m just suggesting people value it seriously and don’t reflexivity value it at zero - that’s all. I think pretending it’s zero is a mistake and stating this repeatedly on HN is a disservice.
- Jensson 5y agoThey are a big lottery ticket. Lottery tickets doesn't have 0 value but you can't count on them having more than 0 value. Lets say you could choose between 1% chance of getting $20 million and 100% chance of getting $1 million, what would you choose? You'd pick the $1 million every time, since it is really easy to transform $1 million into a bunch of risky investments if you prefer the low probability big pay-out, while the 1% of $20 million isn't worth that much.
- m_ke 5y agoExactly, except these days with the way compensation has shifted at FAANG it's more like 1% vs 100% chance at 5mil in 5 years.