4 ms·

Look, I've worked for 5 companies, 1 of which I knew would never sell and I had inklings that one other probably wasn't going to sell and instead was a lifestyl

by knappe 2y ago

Look, I've worked for 5 companies, 1 of which I knew would never sell and I had inklings that one other probably wasn't going to sell and instead was a lifestyle business for the founders, and the other 3 had successful exits. I won the lottery 3 times but I quit the game because I was tired of making VCs and founders rich while taking home breadcrumbs, comparatively. My first startup I walked with a paltry sum and the owners suddenly went from being doctors with a side hustle to private investors. That was my first warning sign and really drove home the need to invest in myself because it certainly wasn't going to be someone else doing it, despite the talk of changing the world. It was really, really obvious that the payouts were stacked in one direction and it certainly wasn't on the side of employees, early or not. I still enjoy working for small companies, but the hype and bullshit are really tiring and so very cultish. I'd really suggest treating the startup life like a scratch lottery ticket, because that is all it is. If you win, you're gonna get paid but it won't be life altering money, just like a scratch lottery ticket. Plan around it being worth zero and go in eyes wide open.

throwaway2037 2y ago
> Plan around it being worth zero and go in eyes wide open. This is the best advice I have seen on HN about start-ups. Note: I have seen it repeated multiple times.
- _heimdall 2y ago
  I've joined two startups now as the 2nd and 4th engineer. I went into both expecting nothing from options or shares, and knowingly accepted a lower than market salary because I liked the teams and projects. I couldn't be happier. Neither panned out for me with regards to stocks, and I definitely didn't get rich in the process, but I very much enjoyed the jobs and when I decided to leave it was only because the business direction wasn't a fit for what I wanted to spend my time on. It sure sounds like a privledged position, but it more came down to us living cheaply compared to our income and having the breathing room to trade a higher salary for work that I really enjoyed. I hope more people can make that tradeoff, it's much more fulfilling in my opinion
- kelnos 2y ago
  I've seen it repeated multiple times, and in the past have even repeated it myself. But these days I'm not so sure. I think you should go into it being ok with the possibility that it'll be worth zero, but I don't think you should plan for it to be worth zero. Put another way, I don't think you should evaluate competing startup offers completely discounting the equity comp. A company that offers $200k and 0.05% of itself is not automatically worse than a company that offers $250k and 0.01% of itself. Hell, that's still true even if they're both offering the same equity ownership percent.
user_7832 2y ago
> the owners suddenly went from being doctors with a side hustle to private investors. Did the owners sell the company or get some sort of payout? I'd imagine if they were making decent money they'd have kept the business alive, right? Would you be okay sharing the name of the place?
- kelnos 2y ago
  I think that was the entire point the GP was trying to make. The founders were doctors that decided to start a side hustle, and then one day, boom, they got a huge payout and suddenly stopped "working" and became private investors. (And meanwhile, their employees didn't get all that much out of that "boom".)
  - knappe 2y ago
    Yeah, this. The doctors sold the company for an undisclosed amount and the employees were left to reapply for their new jobs at the new company while they quit and walked away with enough money to suddenly become private investors.
kelnos 2y ago
I've worked for six companies, won the lottery once, and it was life-changing. I'm not bringing this up to brag or to suggest that it's common, but to point out that it is possible. And frankly I think as time goes on it has become and will become more possible for more people. In part because of people like you who bring up all-too-common stories of how their founders got big payouts, but their employees only saw breadcrumbs. As more and more employees become educated on this stuff, the more pressure it puts on companies to offer better deals to their employees. We have a loooong way to go before my experience is common -- if we do ever get there -- but I do think it's possible that we could get there.

by knappe 2y ago

throwaway2037 2y ago

> Plan around it being worth zero and go in eyes wide open. This is the best advice I have seen on HN about start-ups. Note: I have seen it repeated multiple times.

_heimdall 2y ago
I've joined two startups now as the 2nd and 4th engineer. I went into both expecting nothing from options or shares, and knowingly accepted a lower than market salary because I liked the teams and projects. I couldn't be happier. Neither panned out for me with regards to stocks, and I definitely didn't get rich in the process, but I very much enjoyed the jobs and when I decided to leave it was only because the business direction wasn't a fit for what I wanted to spend my time on. It sure sounds like a privledged position, but it more came down to us living cheaply compared to our income and having the breathing room to trade a higher salary for work that I really enjoyed. I hope more people can make that tradeoff, it's much more fulfilling in my opinion
kelnos 2y ago
I've seen it repeated multiple times, and in the past have even repeated it myself. But these days I'm not so sure. I think you should go into it being ok with the possibility that it'll be worth zero, but I don't think you should plan for it to be worth zero. Put another way, I don't think you should evaluate competing startup offers completely discounting the equity comp. A company that offers $200k and 0.05% of itself is not automatically worse than a company that offers $250k and 0.01% of itself. Hell, that's still true even if they're both offering the same equity ownership percent.

user_7832 2y ago

> the owners suddenly went from being doctors with a side hustle to private investors. Did the owners sell the company or get some sort of payout? I'd imagine if they were making decent money they'd have kept the business alive, right? Would you be okay sharing the name of the place?

kelnos 2y ago
I think that was the entire point the GP was trying to make. The founders were doctors that decided to start a side hustle, and then one day, boom, they got a huge payout and suddenly stopped "working" and became private investors. (And meanwhile, their employees didn't get all that much out of that "boom".)
- knappe 2y ago
  Yeah, this. The doctors sold the company for an undisclosed amount and the employees were left to reapply for their new jobs at the new company while they quit and walked away with enough money to suddenly become private investors.

kelnos 2y ago

I've worked for six companies, won the lottery once, and it was life-changing. I'm not bringing this up to brag or to suggest that it's common, but to point out that it is possible. And frankly I think as time goes on it has become and will become more possible for more people. In part because of people like you who bring up all-too-common stories of how their founders got big payouts, but their employees only saw breadcrumbs. As more and more employees become educated on this stuff, the more pressure it puts on companies to offer better deals to their employees. We have a loooong way to go before my experience is common -- if we do ever get there -- but I do think it's possible that we could get there.