6 ms·

This is the model, you can see a lot of early stage founders looking for a "founding engineer" which is really just an excuse to pay founder salaries for 1% of

• xandrius 2y ago
  What if they give 1-2% and good market rate salary (~200k/y) to a founding engineer? Is that still a bad deal?
  • halgir 2y ago
    If the salary is market rate for that person, I suppose it's by definition a fair deal. I've seen startups hire "founding xyz" two years after they started. Looks to be a vanity title in many cases.
    • dchftcs 2y ago
      Total comp needs to be market rate, not just salary. And non-preferred shares should be valued lower than preferred stock. Lumping non-preferred shares with prefereed shares is one of the bigger lies startups tell employees.
  • jonathankoren 2y ago
    Yes. Because you’re literally the same as the founder, but getting waaaay less equity. First employee is always a sucker
    • xandrius 2y ago
      But you're getting paid a good salary for many while they probably might not. Also I'd be sleeping well at night as I can jump ship the second I'm not happy, my reputation won't be tarnished by that. So I am not sure it's that easy. Of course, the idea is to keep the same work/life balance one would have at a more established company.
      • jonathankoren 2y ago
        It is that easy. Employee 1 is getting paid below market. That’s why they offer 0.9% equity. Meanwhile, the founders are also getting paid. No one is working for free. One of the first things VCs tell you is to make yourself comfortable so you can concentrate on the company. That’s literally one of the reasons why VCs tell founders to sell equity early, to make up for lost income, while Employees 1+ has to ride the rocket into the ground. It’s Baby’s First Labor Exploitation.
  • nevir 2y ago
    Having been in this exact position multiple times now (once quite successful, others not), you should probably consider it a wash. Unless the company hits unicorn AND your shares become liquid (secondaries don't count—you generally won't be able to sell enough shares to make a meaningful dent), you'd make just as much or more at a FAANG firm with way less risk. Of course, I say this while not at a FAANG firm, because I prefer startup type work.
    • xandrius 2y ago
      Yeah but I don't think it's fair to compare salaries to FAANG firms, as they are extreme outliers (and not really good companies). So you would get paid like at another company but get equity on top and it's not a good deal? How comes?
      • jjav 2y ago
        > So you would get paid like at another company but get equity on top and it's not a good deal? How comes? If it were truly market rate (total comp not just base salary) then sure, it's a good deal. How likely are you to find that in an early startup? It must be pretty close to zero percent chance. But if you find it, sure, it's good. You'll still work harder and be more stressed but it'll be a different learning experience which is always nice.
        • eschneider 2y ago
          A lot of it comes down to management/team quality. Do you want to spend an awful lot of time with these folks? Do you think you'll learn from each other? Do these folks seem to know what they're doing and are the building a product that interests you? If you can say yes to most (all?) of those questions, then all-in-all, it's probably a wash. If not, run.
      • zaptheimpaler 2y ago
        Depends on the options available to the candidate. Typically someone joining a startup very early probably has the skill to get FAANG salaries with less stress and more free time. There are also hundreds or thousands of mid size companies that pay very well nowadays, its not just FAANG.
  • petesergeant 2y ago
    Market salary with stock upside plus the chance to level up a job title has potential to be a great deal
    • xandrius 2y ago
      Yeah, that's my thought too. Many companies give ~$200/y for way less upward mobility, impact and voice, and without any equity. Maybe you'd lose our on some tiny perk/benefit but that's not always the case. So I'm not seeing what's wrong with this deal with the only caveat that the engineer has the experience not to overwork/burn out.
      • lumost 2y ago
        It depends on the role and company, if you want to get paid 200k per year for the opportunity to do X - then sure. In practice, you may end up doing basic work at a lower quality than a large firm. Such experience doesn't translate the up-leveled title to a more standard position.
      • geepeeyoudata 2y ago
        >> So I'm not seeing what's wrong with this deal with the only caveat that the engineer has the experience not to overwork/burn out. The startup can go bankrupt any moment, thats a big deal. You get crappy perks, often poor benefits.
        • cruffle_duffle 2y ago
          And at a large corp you can get laid off just as easily. Any business can toss you out at a moments notice. It's not unique to startups. At least with a startup you are going into it knowing that you have a higher probability of thing going south financially. With a big company, you might not get any warning at all.
    • closeparen 2y ago
      Leveling up seems like a good reason for someone who’s stagnating at a bigger company. My experience is startup people want to recruit their most respected former colleagues, who by virtue of being respected are also getting promoted in place. Titles obviously don’t transfer back to big companies, we had plenty of ex-cofounders and CTOs hired into the same junior roles as anyone else who could LeetCode.
  • extr 2y ago
    I was recently faced with this exact offer at seed stage vs a series B with a similar salary. YMMV but what I found when I ran the numbers is the series B offer had a lottery ticket with a similar risk/reward profile to the seed stage. Of course I got less total equity, but it was way more likely to ever actually materialize. Plus being employee 80 at a Series B is a lot easier.
  • geepeeyoudata 2y ago
    >> What if they give 1-2% and good market rate salary (~200k/y) to a founding engineer? Is that still a bad deal? OR....you could just become a founding engineer by actually founding and keep 90% of the equity. You can get that salary with an equity raise, its worth not being the low-person on the totem pole.
    • xandrius 2y ago
      That's forgetting what a founder actually has to do and worry about.
      • blitzar 2y ago
        Advertise for a founding CEO and offer them 1-2%.
• matthewsinclair 2y ago
  This reminds me of how I have seen a few asks lately for roles where a company is looking for a CTO for their “AI startup”. How an “AI startup” (whatever that might actually mean) can _start up_ without a CTO is beyond me, and raises some very big red flags about what that company might be up to.
  • rimeice 2y ago
    Founding “CTO” might be more suited to a “Head of Research” role as the company grows beyond a few engineers.
  • dcow 2y ago
    It’s not necessarily a red flag. Sometimes the founder/CEO is technical and decides to solo it with hired engineers until not having a real CTO is a flight risk, or until they’re too busy to be contributing code anymore, or both.
    • matthewsinclair 2y ago
      That is fair, assuming the CEO is technical, or technical _enough_. However, I see a lot of non-tech CEOs trying this on and in those cases, it is a red flag for me.
      • p1esk 2y ago
        With cofounders it’s fairly typical for one to be technical and the other business savvy.
  • captaincaveman 2y ago
    Mostly someone has a Phd and convinced people to give them money to 'change the world', then need someone who has actually built things beyond a script in a python notebook.
    • matthewsinclair 2y ago
      Gosh. So much this! The difference between the "average" PhD graduate in data science and the "average" software engineer with genuine experience delivering production software that people use at scale is quite something. I have nothing against data scientists, but in the same way that I wouldn't get a software engineer to build a complex model (above a certain level of complexity), neither would I get a data scientist to build a production app (above a certain level of scale). Both of these things are specialist activities that require a lot of experience, wisdom, and nuance to get right. Being good at one does not (necessarily) mean you will be good at the other.
• extr 2y ago
  I recently applied to a seed stage YC company that was offering me 1.5% equity for a founding eng role which they felt was generous. So basically I get to do all the work for like 1/50th of what the founder has? Get real lol. I even pointed this out to them and they said "it's totally normal, that's the way it's done". Like oh okay, as long as everyone else is getting ripped off too.
  • titanomachy 2y ago
    I went through exactly the same discussion in my last job search, and was assured that the offer was in line with industry standards. Even if this tiny company somehow became worth a billion dollars, I’d still make less money than if I’d worked as a senior engineer at Google or wherever. I liked the team and I think it would have been a fun job, but not quite fun enough to work nearly for free. I don’t think I’ll ever work for an early startup as an employee.
    • throwaway98797 2y ago
      you should work at google startups are about the work
      • sleepingreset 2y ago
        OP wants to get PAID for their work and rewarded for the all-in effort they'd put in. re-read their comment
        • throwaway98797 2y ago
          > Even if this tiny company somehow became worth a billion dollars, I’d still make less money than if I’d worked as a senior engineer at Google or wherever this is why they don’t belong in start up land running and working in a start up requires a certain type of insanity this individual is not a fit
          • lumost 2y ago
• blitzar 2y ago
  > a lot of early stage founders looking for a "founding engineer" I always just assumed that the Entrepreneur, Founder & CEO had come up with an amazing idea like "build an startup (Ai probably) that makes a lot of money" and got some funding - but don't know what software is, don't know how to code and isn't really sure what Ai is does or can be used for; so need someone to put the pieces together to execute their vision with (for) them. Opportunity to get in the ground floor with a future Unicorn - must have 25 years experience, Salary $25,000, 2% equity with 5 year lock-in.