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Especially 5 years down the road when you own ~30% of a $100M company - but you know there's a decent chance you'll walk away with very little, if not nothing -
by onlyrealcuzzo 2y ago
Especially 5 years down the road when you own ~30% of a $100M company - but you know there's a decent chance you'll walk away with very little, if not nothing - while your peers are all making ~$1M per year working 6 hour days at FAANG with a life partner, maybe kids, and a sizable net worth that isn't going away.
Sure, you've got a decent chance to rocket past them in wealth. But they've got everything they really want. You might have foregone your shot at a partner to build a company to mostly profit someone else who did nothing but write you a check. If you do have kids, you'll be old as hell raising them. All you'll have is extra stuff hardly anyone cares about - except maybe you - if you're the type of person chasing down a decimillion net worth.
I hope these people truly enjoy their boats and their third homes in Aspen! It sure is a lot of work to get them.
- whynotminot 2y agoIt’s a shame you were forced to take on this burden and not allowed to be a regular engineer like your peers.
- Finbarr 2y agoNobody is forced to become a founder. A lot of people are naive to the sheer level of stress involved, and think it’s going to be easier than it actually is. You don’t find out just how stressful it is until you’re already super committed, have raised money, have employees, and there’s no easy way out without screwing a whole bunch of people over. Founders tend to only talk about the good things happening at their companies, and tech press tends to focus on the successes. These things contribute to more people starting companies.
- ipaddr 2y agoIf you can't stomach screwing people over you shouldn't be a CEO.
- ukuina 2y agoThis long-running narrative that you have to be a sociopath to be a CEO is false.
- kelnos 2y ago> tech press tends to focus on the successes. On the flip side, though, any regular HN reader has likely seen dozens of accounts written by startup founders whose companies have failed. And there's quite a bit of overlap between the set of HN readers and the set of past, current, and likely-future startup founders.
- Finbarr 2y agoYes and optimism bias leads people to believe they won’t experience those negative events. Everyone must believe they are going to do better than the median outcome when they start a company.
- boringg 2y ago"Sure, you've got a decent chance to rocket past them in wealth." I might rephrase that as you have a non-zero chance. Odds are not that high and certainly not decent.
- icedchai 2y agoOr, based on examples I've witnessed, 5 years down the road you own 20% of a $1M company because your forecasts were off by an order of magnitude. You've gone through a couple down rounds, where investors took at least 20% each time. You feel obligated to your investors and employees, while there is almost zero chance of walking away with anything.
- htrp 2y agoOne thing that is underappreciated in the startup mythos is just closing up shop and trying again.
- moneywoes 2y agodo investors allow that
- tomrod 2y agoThey don't control it.
- Finbarr 2y agoThat very much depends on the stage of the company and how much control has been given up at different points. Do you think the management team of a public company could just decide to shut it down? As you raise consecutive rounds, your control is eroded.
- nlh 2y agoOne of the greatest quotes I've ever heard from a founder buddy was when his startup was going through a particularly dark moment and struggling: One of the investors said to him "Maybe you should seriously think about shutting down and giving us our money back", to which he replied: "It's not your money anymore."
- icedchai 2y ago
- foobarian 2y ago> making ~$1M per year working 6 hour days at FAANG Can you say more on this? I didn't realize FAANG TCO was quite that high. Maybe it's time to swallow some pride and take the adtech money after all...
- onlyrealcuzzo 2y agoThe average SUCCESSFUL founder is in their earlier 30s. At that point - you should be at least L4 (probably L5) at FAANG. Salaries are about ~$450k at that level and age. In 5 years, if you work even a fraction of as hard as you need to be a successful founder, you should be L7 - salaries are usually >$800k at that point. No, it is not like any average slacker straight out of college in 5 years can get to a $1M salary at FAANG. But if you're the type of person that could successfully grow a company to a multi hundred million valuation in 5 years - you can make $1M at FAANG.
- kolbe 2y agoThose aren't entirely overlapping skills. There are plenty of founders whose attitudes and generalist skill sets make them unhireable in the management ranks of FAANG.
- dclowd9901 2y agoBig caveats on these numbers: 1. You’ll have to be located in SF or Seattle. 2. Going from L5-L7 is _not_ trivial. It requires a somewhat miraculous combination of being on a productive team with a good boss, a lot of opportunities for showy work and your own gamesmanship around corporate politics. Is it possible? Sure. But in my short stint at Amazon, I met a lot of people who should have been higher level and were simply not due to missing one of these factors.
- onlyrealcuzzo 2y ago> Going from L5-L7 is _not_ trivial It is trivial compared to growing a company successfully from $10M valuation to $100M valuation + an exit.
- dasil003 2y agoYeah I feel like successful founders natural ambition and optimism is sort of weaponized against them by the VC industry here. From a VC perspective it's worth playing the odds for moonshots. As a founder though, if you can create a $100M company that you own 30% of, you can probably create a $20M company you own 70% of with a much more realistic and sustainable growth targets. I can't help but feel this would be better for the founders, the employees and the customers of the company. It just doesn't make as much sense for the investors.
- throaway893 2y agoYou are completely detached from the real world. Even in super rich countries like the US there are a lot of people without savings, living paycheck to paycheck. Most/all software engineers outside the US can only dream of ever earning that much money. And yet here you are, worrying that you'll end up only slightly richer than people earning ~$1M per year.
- RhodesianHunter 2y agoI don't think you fully understand the context in which this was written, but you probably should before passing so much judgement.
- Thorrez 2y ago>And yet here you are, worrying that you'll end up only slightly richer than people earning ~$1M per year. onlyrealcuzzo is comparing 2 things: * Being a founder and working mega hours and having no life (e.g. no spouse or kids) and having a decent chance of losing most of your money as the company fails. * Working at FAANG and making a lot of money while not having to work too much. onlyrealcuzzo is saying the second option is better.
- chinchilla2020 2y agoYou're saying joining a startup is going to result in success? Talk about detached from reality. A 30k job at a local dev shop in Poland is going to reward you more than most startups in the US.
- philipov 2y ago[flagged]
- dclowd9901 2y agoOk, please argue in good faith here. Maybe 1 or 2 people who aren’t executives are pulling in that kind of money from FAANGs.
- wordpad25 2y agoIf you're CEO at a $100MM company, your peers ARE executives at FAANG
- rbranson 2y agoIncorrect. See: https://www.levels.fyi/companies/facebook/salaries/software-engineering-manager/levels/m2 https://www.levels.fyi/companies/facebook/salaries/software-...
- dclowd9901 2y agoI was under the impression we were talking about ICs here -- your link shows that an upper-middle IC that you'd expect to be choosing between early startup or FAANG will see something around 450 a year, which tracks much closer to what I'd expect.
- gopher2000 2y agoYou said 1 or 2 people who aren't executives. There's way more than 1-2 E7s at Meta, as an example.
- chucksmash 2y agos/deci/deka/
- seansmccullough 2y ago> while your peers are all making ~$1M per year working 6 hour days at FAANG Unless you are a manager, in which case you are working more like 12 hour a day.
- hatsix 2y agoI know a red badge director (10-15 years) at Amazon who dipped well below 500k due to the last 4 years of stock prices. Though this recent climb has been great for their morale.
- Thorrez 2y ago>while your peers are all making ~$1M per year working 6 hour days at FAANG I highly doubt ALL your peers are making that much. And I think the people making $1M per year at FAANG tend to work much more than 6 hour days. You have to be very productive to get $1M per year.
- smokel 2y agoThe "Four Yorkeshiremen" sketch by Monty Python always lightens my mood when this kind of bragging comes up.
- algobro 2y agoSir if you live in USA and do not take a dip into the VC money swimming pool, you are stupid, because crazy people with stupid ideas routinely get to $100 Million valuations, like no other place on earth. Its like going to Disney Land and saying "Oh i'll just sit at the coffee shop". Some people are here for the ride. Some people like the 9 to 5. Like you, obviously. Why dont you go start corporate-drone-news.org, this board is for hackers and founders.
- alexvitkov 2y agoI don't mind the shit take, but please don't use underscores in your domains.
- algobro 2y agoGood catch, fixed.
- ditonal 2y agoYou’re obviously overstating the FAANG SWE lifestyle. But beyond that, it’s interesting you picked FAANG SWE and not startup SWE as the basis of your comparison. The whole premise of the article is that startup employees are often sold a bag of goods about equity and upside that’s simply a terrible deal. Not terrible in the sense that it’s highly risky, but that it doesn’t even come close to compensating for that risk premium. Its sold as FAANG is low risk medium upside but startup SWE is high risks high upside but really its extreme risk and almost no upside because VCs find dozens of ways to carve it out. And people will say startups pay “market” compensation but they almost always mean base salary only, and the equity is such a horrible deal, it’s borderline fraudulent scam on the part of founders to sell startup employees on the equity as a fair deal. As an aside, when people think SWEs don’t need unions/ professional associations, they think of teachers unions or autoworker unions where pay is standardized on seniority. Instead, we could have something where our lawyers in our camp could review equity terms and we could collectively advocate for things like liquidity deals. That will never ever happen if you only trust the deals the VCs and founders offer.
- Finbarr 2y agoLet's not forget that FAANG companies were all startups at one point. Early employees at those companies experienced significant upside. Startups can be very high risk, and in rare cases, extreme upside.
- ditonal 2y agoThis is the “startup myth” that lets the scam perpetuate. The world has changed. Google IPOed just a few years after it founded. Now Stripe, objectively one of the most successful startups ever, still hasn’t IPOed after 15 years. Liquidity preference Dilution Even the F in FAANG had a major movie made about early employees getting shafted by dilution! FAANG is 5 companies founded a long time ago. Since then VCs have completely rewritten the rules of the game. But they’ll still point to extreme outliers in the old rules. The fairy tale of the Google masseuse has probably cost tens of thousands of engineers millions in compensation. You need to get things in writing and do the math and startups make it as difficult as possible to do that and then the math never adds up. So they resort to fairy tales.
- slashdave 2y ago> there's a decent chance you'll walk away with very little Well, some founders care about their employees and their idea, and the idea of the start up failing is much more than just money.
- Oras 2y agoYour comment suggests people making 1M in FAANG and somehow a stable job. Did you hear about the thousands of layoffs in recent years?
- mgfist 2y agoYes but that's still better than early employees who share a lot of the stress and responsibility of company building, with at best 10% of the upside, but more likely around 0.1% - 1% of the upside that the founder has.
- intelVISA 2y agoYep, don't think it pays to go the middle ground in this case. There isn't much point sweating for another person's dream, go big with your own startup or rest and vest at FAANG and live life.
- AntiRemote 2y ago[dead]
- kelnos 2y ago> our peers are all making ~$1M per year working 6 hour days at FAANG I think you overestimate median pay at the FAANGs by quite a lot.
- psandor 2y ago"mostly profit someone else who did nothing but write you a check" There is quite a bit of work involved in reaching the point where you write a check for a Series A round. Also, the better VCs spend significant time with their portfolio companies.