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This question I asked when YC company Amplitude went public a little while back: https://news.ycombinator.com/item?id=28700409 https://news.ycombinator.com/item

This question I asked when YC company Amplitude went public a little while back: https://news.ycombinator.com/item?id=28700409 https://news.ycombinator.com/item?id=28700409 It confirmed that these days if a startup is successful the founder gets almost all of the reward, the first handful of engineers get a few million bucks, and the thousand+ people that follow simply get a regular salary. There are only two real paths to wealth in tech nowadays: start your own thing or work for FAANG.

kodah 5y ago
Came here to say this. First engineers and founders usually make most of the pie. Anecdotally, I work for an engineering firm and within 4 years I was able to go from zero savings to a quarter of my retirement. It can be miserable sometimes, but I'd take miserable and retire in my 40s at this point.
Sohcahtoa82 5y ago
I joined a startup a few months ago, and yeah...I don't know what my stock options are potentially worth. I can buy 20,000 shares at $3/share over 4 years. We got a second round of VC funding in Spring with a valuation of $250M. Let's say in 5 years, we go public, I had exercised all my options, and we end up being worth $25B. Would that mean the $60,000 I spent on shares would be worth $6M? Would another round of VC funding affect this? Or is there more information needed that I don't know and might not have access to?
- zeusk 5y ago
  Usually new funding leads to dilution of existing investors, you might want to read the offering of your second round for relevant details.
- s1artibartfast 5y ago
  There is simply no way to tell. It all depends on how many shares there are at the time you sell. VC funding can change this. Do you know how many shares there are today? If there is a 25B valuation and 25B shares at the time of sale, your shares would be worth 20K (and you overpaid). If there is a 25B valuation and 25 million shares, you would be worth 20M
  - Sohcahtoa82 5y ago
    According to the stock options plan document, there are 2.5M shares reserved for issuance for the plan. Of course, that says nothing about total shares.
    - s1artibartfast 5y ago
      This might be helpful: https://carta.com/blog/equity-101-stock-economics/ https://carta.com/blog/equity-101-stock-economics/ If your options were priced at the $250 million valuation, and no dilution occurs, the stock value would be 3$*IPO valuation/$250M. Dilution events are pretty common, even for companies that are revenue positive. I would recommend viewing the options as a potential windfall, but not part of any compensation evaluation or financial planning.

kodah 5y ago

Came here to say this. First engineers and founders usually make most of the pie. Anecdotally, I work for an engineering firm and within 4 years I was able to go from zero savings to a quarter of my retirement. It can be miserable sometimes, but I'd take miserable and retire in my 40s at this point.

Sohcahtoa82 5y ago

I joined a startup a few months ago, and yeah...I don't know what my stock options are potentially worth. I can buy 20,000 shares at $3/share over 4 years. We got a second round of VC funding in Spring with a valuation of $250M. Let's say in 5 years, we go public, I had exercised all my options, and we end up being worth $25B. Would that mean the $60,000 I spent on shares would be worth $6M? Would another round of VC funding affect this? Or is there more information needed that I don't know and might not have access to?

zeusk 5y ago
Usually new funding leads to dilution of existing investors, you might want to read the offering of your second round for relevant details.
s1artibartfast 5y ago
There is simply no way to tell. It all depends on how many shares there are at the time you sell. VC funding can change this. Do you know how many shares there are today? If there is a 25B valuation and 25B shares at the time of sale, your shares would be worth 20K (and you overpaid). If there is a 25B valuation and 25 million shares, you would be worth 20M
- Sohcahtoa82 5y ago
  According to the stock options plan document, there are 2.5M shares reserved for issuance for the plan. Of course, that says nothing about total shares.
  - s1artibartfast 5y ago
    This might be helpful: https://carta.com/blog/equity-101-stock-economics/ https://carta.com/blog/equity-101-stock-economics/ If your options were priced at the $250 million valuation, and no dilution occurs, the stock value would be 3$*IPO valuation/$250M. Dilution events are pretty common, even for companies that are revenue positive. I would recommend viewing the options as a potential windfall, but not part of any compensation evaluation or financial planning.