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Based on internal data I have from similar companies my guess would be the first 50 employees average about $15-20m each and the next 100 average about $5-10m e

by nugget 4y ago

Based on internal data I have from similar companies my guess would be the first 50 employees average about $15-20m each and the next 100 average about $5-10m each just from their initial 4 year grants, with a lot of variation based on team and seniority. Stripe options have probably grown about 100x in value since the Series B so if you were an engineer who joined around that time, received $100k in RSUs, and left upon fully vesting then you'd be looking at around $10m in value today.

sillysaurusx 4y ago
Stripe employee #130 made $5m (after taxes) from 4 years of options? Is there any data to support that? It sounds mistaken, but exponential curves are hard to reason about. 50 x $15m + 100 x $5m = 1.25B post-tax, so probably north of $1.7B pre tax. Stripe had a post-money valuation of $10B+ in March 2021, so that’s around 15% of the company. I guess that’s in the right ballpark. Hmm. Thank you for the concrete numbers. That’s a nice payoff for four years of work, even if you do have to wait ten years for it. Happy to hear the startup reward structure still makes sense in 2023. In that case, it might be a good idea to join one that seems promising. The payoff is rare, but it’s a lot less rare than the lottery: there have been n YC startups, so the odds are around 10 in n. And I think n is something like 2k to 5k. (Edit: yeah, 4k according to Wikipedia.) 1 in 400 chance of $5m is still pretty low odds, though. But you do learn a lot, and you meet a lot of people that have a higher than average chance of being a future founder, so the benefits still seem to make sense. Interesting.
- kgwgk 4y ago
  > Happy to hear the startup reward structure still makes sense in 2023. At least for people who joined a successful one ten years ago.
- nl 4y ago
  Also worth noting that in today's market a company like Stripe isn't paying significantly below market rates, so there's not huge downside in that regard.
  - bradleyjg 4y ago
    Companies like stripe today or companies like stripe just after its series B?
    - nl 4y ago
      Both. After Series A most should be paying competitive salaries.
      - bradleyjg 4y ago
        Just so I understand correctly, levels.fyi is saying that a Google L5 offer in a HCOL city is around $200k/$100k/$30k right now. If we are very conservative and value the RSUs at 75% that’s still $305k total. Are you saying the cash component of post series A offer should be competitive with $200k, $230k, $305k, or $330k?
        pcthrowaway 4y ago
        I don't know why you didn't just look it up, you were right there. Stripe pays about the same as google if you just consider base+bonus, much more if you consider stock. Of course it's not a fair comparison because google stock is liquid
        bradleyjg 4y ago
        We aren’t talking about stripe, we are talking about just post series A companies. The question is whether it is a no brainer to work for such a company because you get a competitive offer plus lottery tickets. My sense is that this isn’t true. The claim of competitiveness is setting to zero the value of liquid google RSUs. But I’m open to being corrected.
        zamnos 4y ago
        So to answer bradleyjg's question, you're saying $230k. Which is $100k less than the total Google compensation of $330k.
madaxe_again 4y ago
Based on personal experience and friends who have been at unicorns in their early days - the first 50 employees average about $0. The next 100 average about $0. In every case, the stock that the employees holds gets reclassified and diluted until it’s a funky employee-only stock that’s only saleable back to the company at nominal value, but the company isn’t buying. So sure, maybe there’s some kind of nominal value, but actual cash money? $0. I hold 10% of a business valued at £150M. My holding is worth £0 because I can never sell it to anyone.
- sverhagen 4y ago
  Doesn't that mean these the decision makers also don't have liquidity? If so, wouldn't the lack of liquidity not be for them still believing that there's a bigger payday behind the horizon? Still sucks if you want/need the cash now, of course.
  - ethbr0 4y ago
    Without employee power on the board, there's nothing to prevent leadership from issuing themselves a different class of stock. Especially for pre-IPO companies that are beholden to fewer financial regulations. Either you have power, or you have a promise. ... And promises depend on how much you trust your counterparty.
- j-bos 4y ago
  Are these experiences in the US? Asking because I imagine conditions would differ country to country.
  - madaxe_again 4y ago
    US, U.K., EU - I mean, sure, maybe you’ll have better luck in Liberia.
- blitzar 4y ago
  Zuckerberg, Brin, WeWork Guy etc all first 50 employees of unicorns ... you saying that their 100's of billions are actually zero value because they are 100's of billions of funky employee-only stock that’s only saleable back to the company at nominal value? Also why pay $3.5bn of tax on $0 of value? Given how sharp tech is about tax minimization you would think they would have better tax people.

by nugget 4y ago

sillysaurusx 4y ago

Stripe employee #130 made $5m (after taxes) from 4 years of options? Is there any data to support that? It sounds mistaken, but exponential curves are hard to reason about. 50 x $15m + 100 x $5m = 1.25B post-tax, so probably north of $1.7B pre tax. Stripe had a post-money valuation of $10B+ in March 2021, so that’s around 15% of the company. I guess that’s in the right ballpark. Hmm. Thank you for the concrete numbers. That’s a nice payoff for four years of work, even if you do have to wait ten years for it. Happy to hear the startup reward structure still makes sense in 2023. In that case, it might be a good idea to join one that seems promising. The payoff is rare, but it’s a lot less rare than the lottery: there have been n YC startups, so the odds are around 10 in n. And I think n is something like 2k to 5k. (Edit: yeah, 4k according to Wikipedia.) 1 in 400 chance of $5m is still pretty low odds, though. But you do learn a lot, and you meet a lot of people that have a higher than average chance of being a future founder, so the benefits still seem to make sense. Interesting.

kgwgk 4y ago
> Happy to hear the startup reward structure still makes sense in 2023. At least for people who joined a successful one ten years ago.
nl 4y ago
Also worth noting that in today's market a company like Stripe isn't paying significantly below market rates, so there's not huge downside in that regard.
- bradleyjg 4y ago
  Companies like stripe today or companies like stripe just after its series B?
  - nl 4y ago
    Both. After Series A most should be paying competitive salaries.
    - bradleyjg 4y ago
      Just so I understand correctly, levels.fyi is saying that a Google L5 offer in a HCOL city is around $200k/$100k/$30k right now. If we are very conservative and value the RSUs at 75% that’s still $305k total. Are you saying the cash component of post series A offer should be competitive with $200k, $230k, $305k, or $330k?
      - pcthrowaway 4y ago
        I don't know why you didn't just look it up, you were right there. Stripe pays about the same as google if you just consider base+bonus, much more if you consider stock. Of course it's not a fair comparison because google stock is liquid
        bradleyjg 4y ago
        We aren’t talking about stripe, we are talking about just post series A companies. The question is whether it is a no brainer to work for such a company because you get a competitive offer plus lottery tickets. My sense is that this isn’t true. The claim of competitiveness is setting to zero the value of liquid google RSUs. But I’m open to being corrected.
        zamnos 4y ago
        So to answer bradleyjg's question, you're saying $230k. Which is $100k less than the total Google compensation of $330k.

madaxe_again 4y ago

Based on personal experience and friends who have been at unicorns in their early days - the first 50 employees average about $0. The next 100 average about $0. In every case, the stock that the employees holds gets reclassified and diluted until it’s a funky employee-only stock that’s only saleable back to the company at nominal value, but the company isn’t buying. So sure, maybe there’s some kind of nominal value, but actual cash money? $0. I hold 10% of a business valued at £150M. My holding is worth £0 because I can never sell it to anyone.

sverhagen 4y ago
Doesn't that mean these the decision makers also don't have liquidity? If so, wouldn't the lack of liquidity not be for them still believing that there's a bigger payday behind the horizon? Still sucks if you want/need the cash now, of course.
- ethbr0 4y ago
  Without employee power on the board, there's nothing to prevent leadership from issuing themselves a different class of stock. Especially for pre-IPO companies that are beholden to fewer financial regulations. Either you have power, or you have a promise. ... And promises depend on how much you trust your counterparty.
j-bos 4y ago
Are these experiences in the US? Asking because I imagine conditions would differ country to country.
- madaxe_again 4y ago
  US, U.K., EU - I mean, sure, maybe you’ll have better luck in Liberia.
blitzar 4y ago
Zuckerberg, Brin, WeWork Guy etc all first 50 employees of unicorns ... you saying that their 100's of billions are actually zero value because they are 100's of billions of funky employee-only stock that’s only saleable back to the company at nominal value? Also why pay $3.5bn of tax on $0 of value? Given how sharp tech is about tax minimization you would think they would have better tax people.