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Yes, and here's why. it's not about project productivity, it's about building your company. "A" players hire "A" players. "B" player hire "C" players. "C" Playe

by padwiki 15y ago

Yes, and here's why. it's not about project productivity, it's about building your company. "A" players hire "A" players. "B" player hire "C" players. "C" Players don't want to look bad so they hire "F" players. That being said, I wouldn't pay them 3x in straight salary. Equity and profit sharing is a better motivator.

moocow01 15y ago
I don't know if Ive just seen too much but equity is one of the poorest motivators you can give me. I don't think I'm totally alone in this sentiment in that it seems like many are trending towards cash payment over equity.
- hnwh 15y ago
  Agree.. i'm programming in a pretty demanded field, and am motivated way more when my employer agrees to pay the salary i'm comfortable with, rather than trying to negotiate with worthless equity (exception for when the company is already profitable, several rounds of funding in, and the equity actually has a quantifiable value)
- padwiki 15y ago
  So, if you were an early stage Google or Apple employee you would take salary over stock?
  - moocow01 15y ago
    Yes and I would have lost out. I think what you are missing is that Apple and Google are 2 companies out of a 1000 or more that didn't make it. One top of it, in the beginning stages it is virtually impossible to know if you are in a winner or not... a friend of mine was employee 300 something at Google and thought the company was going to go nowhere. He took the job as a filler job with intentions of jumping to something better when it came along. Equity is very similar to the lottery... a few will win hugely large while the masses will mostly receive nothing. Thats how the system works. Ive taken equity and cash at different times over the years. Its not a scientific breakdown but through experimentation the decision to take cash over equity has been reinforced over and over again. Additionally despite my one very fortunate friend, everyone else I know in the industry is far from struggling financially but generally agrees from their experiences that equity is very much just a lottery ticket. (And even if your company does end up being 'the one', you still risk getting screwed out of your shares.) I'd rather have cash.
    - padwiki 15y ago
      Let me put it another way. Let's say you were flush with cash for some reason. Would you ever invest in an early stage or startup company? Would you ever invest in any company? Or, do you believe it is impossible to know, or at least approximate odds of, any company's chance of success? Let me put it to you yet another way. Which is more likely to go out of business in the next two years, blockbuster or BP? If you say blockbuster, why?
      - moocow01 15y ago
        If I had buckets and buckets of cash I definitely would invest in early stage companies. I'm not saying that early stage companies are shams or are always deemed to fail or that your equity will always be worthless. The problem in my mind is that as an employee you have little to no ability to diversify your equity as an investment. You are all in with one company for usually 4 years or more (which is about 1/10th of your working life). So now in regard to gaging the success of your company and your investment... I think it pretty easy to forecast the coming trends in the technology space. For example I think its pretty easy to foresee that the internet is going to eventually eat traditional cable providers as its great at eliminating the middleman. There are going to be some big winners in this space and there are lots of early stage companies looking to ride this. But who out of them is going to be the big winner or few winners of this space? - your guess is as good as mine. As an employee I have to pick one but as a VC or investor I can invest in the general space knowing that somebody in my portfolio is probably going to win this market. This is the reason I take cash - its not that I don't want to invest in equities, its that I want to have the freedom to put that cash into diversified equities.
        padwiki 15y ago
        This is very illuminating; thank you for sharing your thoughts on the subject. I can see where you are coming from in regards to diversification, although I take a slightly different angle. If I'm taking 75% of the salary I would in a fortune 500 gig, I already consider myself 3/4s diversified. Plus, I can always work 4 startups in 4 years and just take the first cliff worth of stock, which diversifies even more. Granted, it's no mutual fund, but it's not "I'm locked in to one company for 1/10 of my life and if they go under I'm bankrupt". It's a little less money for as long as I choose to work there in exchange for a potential return on investment. If I were go back and look for an equity heavy gig, and I don't plan to, I would look at the entire process as an early stage investor. No, I can't invest in 10 or 20 different companies, but I can be selective and increase my odds. Actually, anyone with my current skillset could walk into any startup in the valley and start working the next day. That is something few, if any, angels could do.

by padwiki 15y ago

moocow01 15y ago

I don't know if Ive just seen too much but equity is one of the poorest motivators you can give me. I don't think I'm totally alone in this sentiment in that it seems like many are trending towards cash payment over equity.

hnwh 15y ago
Agree.. i'm programming in a pretty demanded field, and am motivated way more when my employer agrees to pay the salary i'm comfortable with, rather than trying to negotiate with worthless equity (exception for when the company is already profitable, several rounds of funding in, and the equity actually has a quantifiable value)
padwiki 15y ago
So, if you were an early stage Google or Apple employee you would take salary over stock?
- moocow01 15y ago
  Yes and I would have lost out. I think what you are missing is that Apple and Google are 2 companies out of a 1000 or more that didn't make it. One top of it, in the beginning stages it is virtually impossible to know if you are in a winner or not... a friend of mine was employee 300 something at Google and thought the company was going to go nowhere. He took the job as a filler job with intentions of jumping to something better when it came along. Equity is very similar to the lottery... a few will win hugely large while the masses will mostly receive nothing. Thats how the system works. Ive taken equity and cash at different times over the years. Its not a scientific breakdown but through experimentation the decision to take cash over equity has been reinforced over and over again. Additionally despite my one very fortunate friend, everyone else I know in the industry is far from struggling financially but generally agrees from their experiences that equity is very much just a lottery ticket. (And even if your company does end up being 'the one', you still risk getting screwed out of your shares.) I'd rather have cash.
  - padwiki 15y ago
    Let me put it another way. Let's say you were flush with cash for some reason. Would you ever invest in an early stage or startup company? Would you ever invest in any company? Or, do you believe it is impossible to know, or at least approximate odds of, any company's chance of success? Let me put it to you yet another way. Which is more likely to go out of business in the next two years, blockbuster or BP? If you say blockbuster, why?
    - moocow01 15y ago
      If I had buckets and buckets of cash I definitely would invest in early stage companies. I'm not saying that early stage companies are shams or are always deemed to fail or that your equity will always be worthless. The problem in my mind is that as an employee you have little to no ability to diversify your equity as an investment. You are all in with one company for usually 4 years or more (which is about 1/10th of your working life). So now in regard to gaging the success of your company and your investment... I think it pretty easy to forecast the coming trends in the technology space. For example I think its pretty easy to foresee that the internet is going to eventually eat traditional cable providers as its great at eliminating the middleman. There are going to be some big winners in this space and there are lots of early stage companies looking to ride this. But who out of them is going to be the big winner or few winners of this space? - your guess is as good as mine. As an employee I have to pick one but as a VC or investor I can invest in the general space knowing that somebody in my portfolio is probably going to win this market. This is the reason I take cash - its not that I don't want to invest in equities, its that I want to have the freedom to put that cash into diversified equities.
      - padwiki 15y ago
        This is very illuminating; thank you for sharing your thoughts on the subject. I can see where you are coming from in regards to diversification, although I take a slightly different angle. If I'm taking 75% of the salary I would in a fortune 500 gig, I already consider myself 3/4s diversified. Plus, I can always work 4 startups in 4 years and just take the first cliff worth of stock, which diversifies even more. Granted, it's no mutual fund, but it's not "I'm locked in to one company for 1/10 of my life and if they go under I'm bankrupt". It's a little less money for as long as I choose to work there in exchange for a potential return on investment. If I were go back and look for an equity heavy gig, and I don't plan to, I would look at the entire process as an early stage investor. No, I can't invest in 10 or 20 different companies, but I can be selective and increase my odds. Actually, anyone with my current skillset could walk into any startup in the valley and start working the next day. That is something few, if any, angels could do.