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If he's 22 and is earning slightly -more- than market value ... why is a lack of equity an awful deal? I could have made more per hour delivering pizza than I

by mst 18y ago

If he's 22 and is earning slightly -more- than market value ... why is a lack of equity an awful deal? I could have made more per hour delivering pizza than I did in my first technical job as a fresh grad, but it was fun, it paid my rent, I learned stuff and it put the experience on my CV to get a better job when I got bored of it - and management there well knew that that was my plan, and had no problem at all with that. There's no employee equity at Shadowcat (the company I co-founded) either. Myself and the other founder hold one share each, which pay no dividends, and which we never intend to sell - they exist to give us the authority to build the company we want to work for for the forseeable future, the way we think it should be built. There's more than one way to do things; not all of them are wrong.

abstractbill 18y ago
It's not a bad deal compared to delivering pizza. It is a crappy deal compared to most developer positions though. Putting "I worked at a startup you've never heard of" on your resume isn't a good thing, unless you can say you were a founder. He should either be getting paid a lot more than market, or he should have equity, to compensate for this.
- cstejerean 18y ago
  Depends on where you want to work next. Generally having a wide range of interesting things you've done that you can discuss during an interview for every position on your resume is far more important than the companies you worked for.
prospero 18y ago
As the company's only technical hire, there's an expectation that he would be exceptional regardless of his age. There's also a question of how much he has to offer to the founders, and how much the founders have to offer him. If these two biz dev guys can make the company successful no matter what the quality of the product, then he's not very valuable. If that's not true, though, then his work has a very direct impact on the value of the company, which generally means that he would have equity. The former case seems unlikely, so it seems like he's getting a raw deal.
dcurtis 18y ago
The reason equity grants are so popular at startups is because they work. When employees own a physical piece of the work they are creating, and when they have a definite vested interest in making things to the best of their ability, you (as the founder) get a good culture and hardworking people. That ends up increasing the value your own equity in the company. Without equity grants, you have to give employees monetary incentives. Those are usually capped and generally don't have much upside. They're also almost impossible to calculate on a single-person basis. Equity has essentially an unlimited upside and its worth is easily measured. Why don't you give your employees equity?
- mst 18y ago
  No dividend. Not intended to be sold. The company is held only by the founders so we can control its progress and ensure it becomes the company we envisaged. Our employees believe in that dream. Since there's no monetary value to having equity, they don't care that they don't have any. They do, however, make more than I do. As for "well give it out anyway, they could always sell it" I refer to the point of "becomes the company we envisaged" and what happened to craigslist. I never said our model was common. I never said it was wise for the majority of companies, or even viable. But it -does- work for us.

by mst 18y ago

abstractbill 18y ago

It's not a bad deal compared to delivering pizza. It is a crappy deal compared to most developer positions though. Putting "I worked at a startup you've never heard of" on your resume isn't a good thing, unless you can say you were a founder. He should either be getting paid a lot more than market, or he should have equity, to compensate for this.

cstejerean 18y ago
Depends on where you want to work next. Generally having a wide range of interesting things you've done that you can discuss during an interview for every position on your resume is far more important than the companies you worked for.

prospero 18y ago

As the company's only technical hire, there's an expectation that he would be exceptional regardless of his age. There's also a question of how much he has to offer to the founders, and how much the founders have to offer him. If these two biz dev guys can make the company successful no matter what the quality of the product, then he's not very valuable. If that's not true, though, then his work has a very direct impact on the value of the company, which generally means that he would have equity. The former case seems unlikely, so it seems like he's getting a raw deal.

dcurtis 18y ago

The reason equity grants are so popular at startups is because they work. When employees own a physical piece of the work they are creating, and when they have a definite vested interest in making things to the best of their ability, you (as the founder) get a good culture and hardworking people. That ends up increasing the value your own equity in the company. Without equity grants, you have to give employees monetary incentives. Those are usually capped and generally don't have much upside. They're also almost impossible to calculate on a single-person basis. Equity has essentially an unlimited upside and its worth is easily measured. Why don't you give your employees equity?

mst 18y ago
No dividend. Not intended to be sold. The company is held only by the founders so we can control its progress and ensure it becomes the company we envisaged. Our employees believe in that dream. Since there's no monetary value to having equity, they don't care that they don't have any. They do, however, make more than I do. As for "well give it out anyway, they could always sell it" I refer to the point of "becomes the company we envisaged" and what happened to craigslist. I never said our model was common. I never said it was wise for the majority of companies, or even viable. But it -does- work for us.