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After having worked at four startups, including two as CTO, I have zero remaining equity or financial upside from any of the startup equity. This is the bitter
by _yf4k 3y ago
After having worked at four startups, including two as CTO, I have zero remaining equity or financial upside from any of the startup equity. This is the bitter take away, your equity will most likely amount to nothing unless the company is on a clear path to IPO/ acquisition or a promise of share buy back during the time you're at the company. This is a higher bar than simple profitability.
The reason you work at a startup is because you
1. seek to start a company in the future and want to index on the mistakes of the startup you work at
2. want to grow in responsibility/ leadership because you're bored at BigTech
3. want to learn more and apply the learnings, hopefully also experiencing the exhilaration that comes from hockey stick growth
The advice to my younger self would be to ignore startup equity if you're an employee for all practical purposes. The only concrete indicator that equity signals is the trust your founders have in you.
- alexawarrior2 3y agoAmen brother/sister. Was founder, co-founder, early employee, or investor in eleven startups, ten of which went out of business or were bought with no net equity earnings for myself, one of them had a $250m exit from which I netted $130k, after seven years. It's not that retirement-level-net-earnings startups never happen, just that they happen only about 1 out of every 1000 times on average according to my research. The exception being, every additional $1m of net worth you have before you found increases your odds of success, up to around 50% success rate with a net worth over $10m (going towards HNWI territory). So being middle class your startup investments are lottery-level, but if you're already rich they're more of a calculated investment. tl;dr only capitalists - the existing 1% - have an odds-on shot at startup success
- satvikpendem 3y ago> only capitalists - the existing 1% - have an odds-on shot at startup success By the VC definition of "startup," which is not universal. This is why I advocate for bootstrapping on the side until the revenue exceeds your salary. Pieter Levels famously did so and many others are also generating $10k or $20k+ MRR and living well. They can always sell that cashflowing asset for a 5x multiple and enter the HNWI territory, or they can simply keep the company on the backburner while they do other stuff.
- gghffguhvc 3y agoThe multiple is very growth dependent amongst other factors.
- 62951413 3y ago4. You'd like to work on advanced technology without a "PhD from CMU". Think CockroachDB, Druid/Imply, StarTree/Trino, ClickHouse (Hadoop/Cloudera a long time ago, Spark/Databricks when it was much smaller).
- Eridrus 3y agoYou don't need an advanced degree to work on these technologies at big tech either.