4 ms·

It seems over the past few years the incentives to work at a startup seemed fairly weak if you could easily get a job at Facebook paying a salary maybe 2X what

by xt00 5y ago

It seems over the past few years the incentives to work at a startup seemed fairly weak if you could easily get a job at Facebook paying a salary maybe 2X what the startup would pay.. I could imagine something like what happened here to be an incentive — you start with say 0.1% equity or something but if the company goes public the company reserves enough equity so that everybody can get their existing equity multiplied by number of years with the company or something..

kesselvon 5y ago
It seems like its very rare for anyone outside the immediate founding team to get enough equity to make an exit worthwhile. It's not like back-in-the-day where places like Google gave equity to their chef
- toomuchtodo 5y ago
  Facebook gave their graffiti artist David Choe what turned out to be $200 million worth of equity. From Wikipedia: Although he thought the Facebook business model was "ridiculous and pointless," Choe chose to receive company stock in lieu of cash payment for the original Facebook murals. Luck is a heck of a thing. https://en.wikipedia.org/wiki/David_Choe https://en.wikipedia.org/wiki/David_Choe
actually_a_dog 5y ago
That's interesting, but, what's the definition of "everybody?" Everybody who ever worked at the company? Everybody working at the company on IPO day? Rewarding only those people present on IPO day seems like it just screws early employees, whereas rewarding everybody who ever worked for the company sounds infeasible due to the number of shares you'd have to hold in reserve to do it. Companies aren't IPO'ing in 4 years anymore, and that's a large part of of what's screwing up the calculus here. I don't recall exactly what the median founding date to IPO date is these days, but, IIRC, it's a bit over 10 years. Time value of money means that money in 4 years is worth a lot more than money in 10 years.

by xt00 5y ago

kesselvon 5y ago

It seems like its very rare for anyone outside the immediate founding team to get enough equity to make an exit worthwhile. It's not like back-in-the-day where places like Google gave equity to their chef

toomuchtodo 5y ago
Facebook gave their graffiti artist David Choe what turned out to be $200 million worth of equity. From Wikipedia: Although he thought the Facebook business model was "ridiculous and pointless," Choe chose to receive company stock in lieu of cash payment for the original Facebook murals. Luck is a heck of a thing. https://en.wikipedia.org/wiki/David_Choe https://en.wikipedia.org/wiki/David_Choe

actually_a_dog 5y ago

That's interesting, but, what's the definition of "everybody?" Everybody who ever worked at the company? Everybody working at the company on IPO day? Rewarding only those people present on IPO day seems like it just screws early employees, whereas rewarding everybody who ever worked for the company sounds infeasible due to the number of shares you'd have to hold in reserve to do it. Companies aren't IPO'ing in 4 years anymore, and that's a large part of of what's screwing up the calculus here. I don't recall exactly what the median founding date to IPO date is these days, but, IIRC, it's a bit over 10 years. Time value of money means that money in 4 years is worth a lot more than money in 10 years.