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- Founders/management get defensive because they don't think they are so small that they cannot be trusted to pay you on time and when you ask for data it impl

- Founders/management get defensive because they don't think they are so small that they cannot be trusted to pay you on time and when you ask for data it implies you don't trust their word that can taken as insulting/lack-of-confidence in them. - The other common reason is those numbers are confidential not just from employees, a competitor or investor who is evaluating a competitor could use it against you, so founders worry about that stuff, you may not take the offer and mention it to next company you talk to etc. - Few tech employees have the financial know-how to read financials, especially of startups . Most early stage investors rarely go through the actual books in any detail. - Measures like churn, CAC, ARR, MRR are the go-to metrics . The actual book numbers basis cash flow can be very bad although company is in decent health, this is why banks will not loan early-stage startups money unlike small businesses as startup numbers are not simply good enough by traditional metrics. - In small enough companies exposing the books to new employee will give rough idea of who is earning how much including the founders, and what else company is spending money on, keeping the information asymmetry can be seen as beneficial by founders.

urthor 5y ago
The flipside is that most startups fail. 90% of startups have terrible numbers on the metrics like churn, CAC,ARR, MRR. Because most startups fail. So as a startup founder, unless you are ONLY looking for financially illiterate employees who are willing to get snowed, you need to show and tell. Often I think the employer doesn't realise that me, the software engineer, might not have the financial know how. But my buddy from college with a masters in finance, THEY do. I'm running the numbers past them.
- manquer 5y ago
  The upside to employees is very limited , that is the point of the post. the upside will be low unless you join very early stage and get decent amount of equity or join as a founding engineer or the company you join becomes valued at 10s of billions which is of course rare otherwise there is very little upside. Almost always FANNG level companies will pay you close or better what you would make best case in most startups with much less risk and far better work life balance. The reasons I have found people are most happy with are non financial, like can’t join big tech/ great dev but poor leet coder, learning opportunities, much more senior role , switch skills, less red tape to get things done, stepping stone to starting your own etc. You can’t quantify that , for some it is worth the risk and the paycuts , for others it isn’t. Most startup recruiters or founders probably won’t pitch that picture to prospective employees, independent of their ability to pay you economics is going to be favorable in big tech any day compared to most startups .
  - urthor 5y ago
    I guess this brings up another idea. The nature of the business is, employer's rarely ever have to hire an employee who knows how to negotiate, knows when to walk away from a deal, and knows their market price. Most employees you've ever worked with are not quite that clever. Most employers vastly prefer employing this slightly dim type of employee, because they cost a lot less money and ask for a much simpler quid pro quo. I find capitalism extremely exploitative like that. At least with unions you have a hustling union boss advocating for the union employee so employees don't get ripped off too much. Now it seems like the vast majority of people I work with are tired parents in their 30s and 40s, who are working a job they don't love for not all that much money. Because they don't have the resources, socioeconomic and otherwise, to bargain and argue their corner.
  - urthor 5y ago
    > the upside will be low unless you join very early stage and get decent amount of equity or join as a founding engineer or the company you join becomes valued at 10s of billions which is of course rare otherwise there is very little upside. Startups often have very, very mission critical technical problems. The first 20 engineers will be solving some really important technical problems. And they'll need high speed & high quality, since what they do will probably directly manifest in the ole bank account. Even outside of engineering. A rule of thumb running a startup is you should overpay for your first 30 employees. Get smart people who are future leadership candidates. If/when you expand to a 500 person company. Out of those 30, chances are quite a few will manage upwards of 30 people as their reports and child reports. I'm sure there's a million different variations on this story. By no means is it universal. But the "early employees are solving life or death business problems, and will transition to being leaders and force multipliers of large numbers of new hires" definitely happens.
    - manquer 5y ago
      > The first 20 engineers will be solving some really important technical problems. And they'll need high speed & high quality, since what they do will probably directly manifest in the ole bank account. I don’t know, many startups are solving business problems, tech is sometimes just fancy versions of CRUD apps.
perfopt 5y ago
All good reasons. But an engineer/employee considering moving from a stable publicly traded company to a startup is justified in asking for the data. I am evaluating options now and one of the reasons I am not so keen on offers from startups (even ones with multiple series of funding) is that they expect me to take the risk without sharing adequate information.
- manquer 5y ago
  Employees have valid reasons to ask, just explaining why it is not common to get a good clear answer from founders . Not saying it is justified . Having said that, if risk is a major concern most startups are not the perhapsright place to work. They are designed to fail quickly than become unsuccessful or low growth businesses, employees or founders do get short end of the stick frequently.
  - perfopt 5y ago
    Yes I am aware most startups fail. Risk appetite for each person is different. For anyone considering a start up an assessment of the degree of risk and rewards is essential. So if a startup does not offer me enough information to make that decision I will pass on the offer.
cowvin 5y ago
Isn't it normal to have some doubts about what a total stranger tells you?

urthor 5y ago

The flipside is that most startups fail. 90% of startups have terrible numbers on the metrics like churn, CAC,ARR, MRR. Because most startups fail. So as a startup founder, unless you are ONLY looking for financially illiterate employees who are willing to get snowed, you need to show and tell. Often I think the employer doesn't realise that me, the software engineer, might not have the financial know how. But my buddy from college with a masters in finance, THEY do. I'm running the numbers past them.

manquer 5y ago
The upside to employees is very limited , that is the point of the post. the upside will be low unless you join very early stage and get decent amount of equity or join as a founding engineer or the company you join becomes valued at 10s of billions which is of course rare otherwise there is very little upside. Almost always FANNG level companies will pay you close or better what you would make best case in most startups with much less risk and far better work life balance. The reasons I have found people are most happy with are non financial, like can’t join big tech/ great dev but poor leet coder, learning opportunities, much more senior role , switch skills, less red tape to get things done, stepping stone to starting your own etc. You can’t quantify that , for some it is worth the risk and the paycuts , for others it isn’t. Most startup recruiters or founders probably won’t pitch that picture to prospective employees, independent of their ability to pay you economics is going to be favorable in big tech any day compared to most startups .
- urthor 5y ago
  I guess this brings up another idea. The nature of the business is, employer's rarely ever have to hire an employee who knows how to negotiate, knows when to walk away from a deal, and knows their market price. Most employees you've ever worked with are not quite that clever. Most employers vastly prefer employing this slightly dim type of employee, because they cost a lot less money and ask for a much simpler quid pro quo. I find capitalism extremely exploitative like that. At least with unions you have a hustling union boss advocating for the union employee so employees don't get ripped off too much. Now it seems like the vast majority of people I work with are tired parents in their 30s and 40s, who are working a job they don't love for not all that much money. Because they don't have the resources, socioeconomic and otherwise, to bargain and argue their corner.
- urthor 5y ago
  > the upside will be low unless you join very early stage and get decent amount of equity or join as a founding engineer or the company you join becomes valued at 10s of billions which is of course rare otherwise there is very little upside. Startups often have very, very mission critical technical problems. The first 20 engineers will be solving some really important technical problems. And they'll need high speed & high quality, since what they do will probably directly manifest in the ole bank account. Even outside of engineering. A rule of thumb running a startup is you should overpay for your first 30 employees. Get smart people who are future leadership candidates. If/when you expand to a 500 person company. Out of those 30, chances are quite a few will manage upwards of 30 people as their reports and child reports. I'm sure there's a million different variations on this story. By no means is it universal. But the "early employees are solving life or death business problems, and will transition to being leaders and force multipliers of large numbers of new hires" definitely happens.
  - manquer 5y ago
    > The first 20 engineers will be solving some really important technical problems. And they'll need high speed & high quality, since what they do will probably directly manifest in the ole bank account. I don’t know, many startups are solving business problems, tech is sometimes just fancy versions of CRUD apps.

perfopt 5y ago

All good reasons. But an engineer/employee considering moving from a stable publicly traded company to a startup is justified in asking for the data. I am evaluating options now and one of the reasons I am not so keen on offers from startups (even ones with multiple series of funding) is that they expect me to take the risk without sharing adequate information.

manquer 5y ago
Employees have valid reasons to ask, just explaining why it is not common to get a good clear answer from founders . Not saying it is justified . Having said that, if risk is a major concern most startups are not the perhapsright place to work. They are designed to fail quickly than become unsuccessful or low growth businesses, employees or founders do get short end of the stick frequently.
- perfopt 5y ago
  Yes I am aware most startups fail. Risk appetite for each person is different. For anyone considering a start up an assessment of the degree of risk and rewards is essential. So if a startup does not offer me enough information to make that decision I will pass on the offer.

cowvin 5y ago

Isn't it normal to have some doubts about what a total stranger tells you?