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I think the bigger issue is that most of the financial upsides of startups were illusory Unless you're a founder, you're unlikely to make any money, and predat

• paulsutter 2y ago
  The best reason to join a startup is to learn how to create a startup. That’s the main thing you won’t get at a FANG job.
• itake 2y ago
  > The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way. Or the startup was a stepping stone in your career. Big Tech wouldn't hire you, b/c you have a different background, so you work at a startup to develop experience and then switch to Big Tech.
  • praptak 2y ago
    Then go from a CTO to an L4 at Google.
    • liontwist 2y ago
      and that’s a good thing! As you get a little older and your life needs more stability (oh no I only make 400k at my 9-5)
  • KaiserPro 2y ago
    I mean yeah kinda. But the skills for a startup map poorly to big companies. Startup: you look at something, plan, execute, learn skills as you go. Big company: here is x, do as I say. You must use these things from these teams, don't make it yourself. Coping with the step down in responsibility is hard. Going from owning the entire stack to not even having a real decision in planning is very hard to deal with, especially if you've done that $thing before, and have to mount effectively an election campaign to change direction.
    • itake 2y ago
      The mindset change isn’t that different. This is just part of the experience of growing and maturing in your career. I think people with startup backgrounds in big tech tend to hustle harder in their careers than people that were “born” in that environment.
      • KaiserPro 2y ago
        I can see your point of view, but I gently disagree. This is based on my own experience. Being able to see, react and change based on changing business goals was the key to my career success. Being able to talk to decision makers and get something in place to mitigate risk/take advantage is a key thing in buisness. Going from being able to do that, to not even knowing what the business goals are, much less getting access to any kind of decision maker is a tough change. Its like having the scope of a CTO and then going to a scope of an intern. You feel infantalised.
• wodow 2y ago
  Are you able to say more on your startup story, through the exit?
• swiftcoder 2y ago
  The other bit here is that hacker news attracted a lot more engineers (vs more entrepreneurial-leaning folk) in the intervening time - and engineers never really made bank on startups. Even in successful startups the engineers are typically lower on the pay-out ranking than the less-technical founders and the VCs...
  • liontwist 2y ago
    That’s a good point. Also the engineer personality tends to be extremely risk averse.
    • kridsdale1 2y ago
      Thank goodness.
    • swiftcoder 2y ago
      I'm not sure I agree with that - good engineers should be experts at managing risk. True risk aversion is an impediment in most fields that engineers are called to solve problems in. That said, we're also pretty analytical, and when one could warm a seat in FAANG for ~$400k/year, even many successful startups weren't outperforming that TC.
      • liontwist 2y ago
        People generally don’t look at risk for work projects than same as risk to their personal life. All I’m saying is engineers tend to like certainty and predictability in their personal life.
• diggan 2y ago
  > I think the bigger issue is that most of the financial upsides of startups were illusory I wouldn't say I'm an old-timer by any metrics, but even back in 2012 when I first discovered and joined HN, I remember it was pretty clear in the community (and people I spoke to around me) you shouldn't go to work at a startup if you were looking for "a lot + safe" money. Sure, you could belong to the 0.001% and work on the next Dropbox, but most likely you would end up not, so don't start at a startup to chase riches, as there are better venues for that. Do work at a startup if the environment/mission/team feels right to you, but with no expectations of a big payday-exit.
  • alexander2002 2y ago
    Technology is inherently a domination force and you can see this invisible domination battle between technology startups all the time. Have a moat* or get exhausted battling against other similar startups until one is the major winner. Technology is the easy part (for most people) Winning the battle is the hard part. TO summarize, win battle=big-payday
    • diggan 2y ago
      That's assuming "Winning" means "More money", but that's not everyone's goal in life. There is plenty of space for smaller companies that earn enough profits to let every employee live a good life, without chasing unicorns.
      • TeMPOraL 2y ago
        Correct, but if you're interested in that, you start a regular small business, and you take a loan from a bank for seed capital. Venture Capital will give you much more more money and ask less questions precisely because they expect you to go for world domination - and they expect corresponding returns. You don't reach for VC if you just want a lifestyle business, much like you don't reach for mafia money just to pay down your mortgage earlier. You have to know who you're getting in bed with, and what their expectations are.
      • pjc50 2y ago
• fxtentacle 2y ago
  "Sell for half a billion and get nothing (2021)" https://news.ycombinator.com/item?id=39598903 https://news.ycombinator.com/item?id=39598903
  • plagiarist 2y ago
    This looks exactly like the story that convinced me I would never accept a loan with the preferred stock bullshit. Except the year 2021 is much later than when I decided that.
• Traubenfuchs 2y ago
  If you join early, got plenty of stock options and the startup turns into a unicorn, those millions are totally possible. Until then, naturally, it's all paper money. A bet. Maybe an investment, of your time and effort. The majority of startups fail and the majority of startups having an IPO will not make anyone rich via stock grants. It's definitely a safer bet to find a high paying job in a stable company.
  • laserlight 2y ago
    > If you join early, got plenty of stock options and the startup turns into a unicorn, those millions are totally possible. GP comment argues correctly that there's no guarantee that employee stock options will return a profit even in the case of successful exits. Valuation multiples, senior debt, clawback options (see Skype exit [0]), fractional stocks being rounded down to zero after stock splits have all been implemented successfully by startups and VCs. I wouldn't invest my time, which is very precious compared to my capital, into any company that is managed by someone I don't know personally. I would rather earn surplus money to invest into high risk high return options. Treat startup equity as a lottery ticket and don't pay too much for one. [0] Skype options turn out to be worthless. https://news.ycombinator.com/item?id=2692985 https://news.ycombinator.com/item?id=2692985
    • throwaway9191aa 2y ago
      This is why I joined AWS 9 years ago, and left the startup world. I own (still?) 15% of a company as a founding engineer (with no voting rights). As part of a raise, the company sold its IP to another company for a 0.5% stake in that company. So now I own 15% of 0.5%....... I just didn't understand the business side of all this at the start. As I understand it, the raise wouldn't have happened and the original company would have folded if the deal wasn't done, so you can't really argue fraud. Since then, I have seen similar things happen more than once to other friends. I can only imagine that as the number get larger, the problems become more complex.
      • HWR_14 2y ago
• throwup238 2y ago
  > predatory VC/backers using convertibles/senior debt to turn your equity into Zimbabwean dollars Liquidation preference!
• aqme28 2y ago
  I was the second engineer (series A) at a company that IPO’d at a unicorn valuation. By all rights that’s a great outcome. I made about as much in that exit as I would have if I were just at a FAANG instead
  • itake 2y ago
    This tracks. I think the real value employees get is riding the rocketship in their career. Early engineers often have first dibs on higher level roles, like CTO or director over people that join late. Your initial grant might not be great, but being director at such a company is huge
    • kijin 2y ago
      Yeah, this is often overlooked in all the talk of $300k FAANG salaries. Few people get those senior salaries, and those who do get it because of their unusual skills and experiences. A stint at a startup is still a pretty good way to get those skills and experiences, compared to spending the same amount of time as a junior developer somewhere else. If you can make capital gains equivalent to FAANG senior salaries while doing so, even better! But if not, at least you'll have come out with a more interesting resume.
      • KaiserPro 2y ago
        levels.fyi will give you some confidence in the wage. Google, Meta, Amazon & microsoft all do banding, so the base wages is mostly public (hence why its all bollocks about wage negotiation, there isn't any.) The first level of senior for most of these orgs will tip the scales at around $300k Having worked at both startup and FAANG, I don;t think startups actually give you the skills to flourish here in corp land. Sure, you might be a good coder, but most of the time its navigating politics that actually gets you promotion (that or good luck with a successful project) You really don't need to be a good coder to be at a FAANG. Sure there are specialisms as you point out. but most of the time its just entry level CRUD, followed by manic debugging with shitty non-documented tools.
• t43562 2y ago
  It's so nice to see my homeland is famous for something! :-) Zimbabwe Dollars FTW. I have 500 billion dollars in a cupboard somewhere BTW.
  • KaiserPro 2y ago
    Sorry, I do love Zim really. I was looking for a metaphor that non-history nerds wouldnt confuse. Papiermark would have been better, but needed explaining.
    • wat10000 2y ago
      Germany’s worthless currency got overshadowed by subsequent events, so I suppose there’s something to be said for Zimbabwe still being notorious for this.
  • blindriver 2y ago
    I have the $100 trillion dollar iirc.
• dkdbejwi383 2y ago
  I've had one successful exit as an engineer. Made enough for a (very) fancy dinner for two, or a short city break. Just a fun bit of pocket money, essentially. Founders made more than I'll probably earn in a lifetime.
  • kijin 2y ago
    Usually, the only engineer who has any chance of making a significant amount of money is the technical co-founder, often called the CTO. The rest of the money belongs to the MBAs and the bankers. It's always been their money, it will always be theirs.
    • robertlagrant 2y ago
      Yes, that's probably true. Investors, or people who take a risk, get the payoff from the risk. If you join as a salaried person, you're taking zero risk (other than that you might need to get another job if the place folds, but then all the money's gone anyway), as you're just getting paid a salary each month regardless of how the company's doing, so you don't get an outsized reward.
      • Gud 2y ago
        Generally this is not true - the "risk" taken by these people is very small, because of how wealthy they or their parents are. If I had $1M and lost it, I would be devastated. If I had $1B and lost $1M, it would be a rounding error. I don't have any money, so how do I even get to $1M? And neither does my parents.
        • kijin 2y ago
          We're not talking about that kind of risk. It's just a synonym for the amount somebody is going to lose if the company fails, regardless of what the amount means to them personally. VC invests $1M in a startup, they are risking $1M. You just work at a company, get paid every month, and don't buy any stock, you are risking $0. That's all. If the company does well and the VC makes $5M back, it probably won't mean much to them, either. But that's how the contract was written, because the company needed that $1M.
• matwood 2y ago
  > The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way. If the goal is economic security (FU money) then the quickest path is to get a job at a big tech company. This requires engineering skills and also the ability to play the various corporate games (ugh). For the rest of us there's entrepreneurship and joining startups.
  • the_af 2y ago
    But there are plenty of "startup games" to be played at startups. Maybe slightly different to corporate games, but also unnerving.
    • dare944 2y ago
      Having done both for a long time, I have to agree. However, generally, there's more choice as to whose games you want to play with startups. And being a startup with limited resources means there's only so many games that can be played before the noise overwhelms the signal and the company goes under (essentially a self correcting effect). At big companies with lots of revenue the shenanigans can become fortresses of crazy (cough Google cough) that can go on forever.
• rglullis 2y ago
  It's almost like the people that have control of capital set up a system where they never lose...
• meritage31 2y ago
  >> Dodgy accounting & staff retention meant that actually you don't get fuckyou money. The insiders get rich via salary, bonus, benefits, and looking for their next job while they are on startup-expensed conference tours, paid forbes articles, and company-sponsored fellowships.
• deleted 2y ago
  [deleted]
• hmmm-i-wonder 2y ago
  This reason I think more than any of the other reasons stated is the cause. Once the financiers took control and ensured they would reap the majority of the rewards, the risk/reward ratio was no longer there for many workers who gravitated towards big-tech instead. Now big-tech is pushing burnout culture hard, and with higher interest rates limiting capital investments from VC's I wonder if we will start to see movements of people away from big-tech to more traditional startups again in the near future? AI startups I believe are already showing this trend away from big business (and even away from their own 'big business' towards smaller startups within AI), but that probably falls more into the group that "believe in the 'mission'" as you point out.
• _heimdall 2y ago
  I've worked at a few startups now but never do it for the equity. I do take equity, but as far as I'm concerned its more a signal that I'm "invested" and have a stake in the game. I work at startups because I prefer the type of work generally found there. I like smaller teams, I enjoy having to learn new things, and I (usually) enjoy how quickly projects and direction can change. For anyone considering a startup I'd say to just consider equity a lottery ticket for a decent bonus. It will probably not amount to anything, and it probably won't be worth what many expect, but it can be a nice bonus if you like the job and team regardless of an exit.
• blindriver 2y ago
  I was the ~15th engineer at a YC startup that had a very big exit. Over 4 years I made less than $80k total (20k/yr) from my options while the founders made high 8 figures. Had I joined BigTech I would have made over $1 M just from stock and I would have worked less. Back during the dot com days, everyone from the secretaries to the chefs to the founders were getting rich but nowadays YC teaches their founders to keep the money and stock options for themselves and for the investors. The only way employees make life changing money is if the company exits for over $10B.
  • varelse 2y ago
    [dead]
  • neilv 2y ago
    > nowadays YC teaches their founders to keep the money and stock options for themselves and for the investors. In founder-matching profiles, I've started saying that I wanted to spread the wealth around with early hires, more than the convention. If founders win, the early hires also win. Lesson learned: no matter how busy a founder is, they are no less petty than anyone else, and some will make time for a call, just to see who this hippie a--h--- is. :)
    • liontwist 2y ago
      I joined a startup that was big on this message. They were previously at startups and felt they didn’t get a fair share in an exit. Well it turns out even that wasn’t enough and they did the same thing. I suspect VCs control too much of the financing.
      • cjbgkagh 2y ago
        Maybe, but people are generally like that. When they’re in the same situations they do the same things. I think few people are honest with themselves, or even know themselves what they would be like if situations were reversed.
      • MomsAVoxell 2y ago
• apercu 2y ago
  I'm a little older than probably the average HN visitor, but I bet my experience matches a lot of peoples: Mid 90's startup: Sold company, proceeds company covered debt, basically. I learned a ton on those 2.5 years, but had to have a part time job to make ends meet (and I was not living a lavish lifestyle). Late 90's - Mid- 00's: Partner in consultancy that made generational wealth for at least one client, worked to burnout multiple times, never able to use the consultancy to develop a product with ARR. Made good profit share and salary the years prior to dotcom bust. Company was sold for basically the debt on the line of credit. Mid-00's - Mid twenty-teens: Joined a "startup" that was really a consultancy. Spearheaded substantial growth, Shareholders just increased the dividend amount every time company grew year over year. Unable to negotiate an equity position that aligned incentives (me giving up my life and energy to further build the business) so I left. I was forced to surrender the equity in another startup when I quit the first one. The other start up is limping along, I think losing a (manageable) amount of money annually. I never valued this equity because the shareholder group was the same as the parent company, so this one had the same issues. So I guess in a 25 year period I had something like 2-3 exits. I worked more than full time between 1998-2015. I'm now a firm believer in that a successful exit takes knowing the right people and getting lucky.
• slashdev 2y ago
  This. FAANG and adjacent pays so well, it's a better and more guaranteed outcome than startups - for people that have that option. Dan Luu wrote about it over a decade ago: https://danluu.com/startup-tradeoffs/ https://danluu.com/startup-tradeoffs/ The math is not in favor of working at a startup, if you do it, don't do it for the money. People finally wised up to this. Even as the founder, working at a FAANG usually works out better financially and is much less stressful. VC's do all kinds of horrible things to founders, like firing them, forcing them to sell at a price that means they get $0 (VC's get preference usually up to 2x their investment - if the sale price is lower than 2x the investment, founders and employees alike get wiped out.) People are also wising up to this. If you're going to found a company think really hard about joining YC and/or going the VC funded route. I think it'd be a lot more pleasant to found a company worth $10 million after 10 years, and own 100% of it, than to found a company worth $100 million after 10 years and own 10% of it. VC is only really for when you've found real product market fit and your biggest problem every day is meeting the insane demand. Everything is just falling over and you can't scale fast enough and you're leaving piles of money on the floor because you just don't have the resources to serve those customers. Then maybe it becomes a good tradeoff. You definitely don't have that in the beginning, and most companies never experience that. I used to drink the koolaid, I applied to YC multiple times. I'm still trying to start stuff on the side of my day job, but I no longer apply to YC and fully intend to bootstrap a smaller but profitable software business.
  • bluGill 2y ago
    To add, VC is for when you have a market that is large enough to pay off their investment with something left over. There are a lot a business opportunities out there that only can return a million per year and they won't scale. This isn't worth VC time, but if you can find one, a million - overhead is still a nice income for you the private business owner. Just remember that as a business owner you need to watch the bottom line, many small businesses go under because they don't account for all the costs of running a business (both time doing bookwork instead of what the business is about and costs of supplies)
    • slashdev 2y ago
• crossroadsguy 2y ago
  I guess even if, and that’s a big if, a founder agrees to give an early employee Class A shares (I guess that would be the top tier, wouldn’t it?), even that could be turned into nothing, wouldn’t it? Unless you’re already rich enough to be able to legally stand up for yourself. Even class A shares are given in the form of options? Such that even to make it yours after a certain period (usually after leaving) you actually have to “buy” it and then pay taxes on its fictitious price difference. I have come across ESOPs just once from an American startup (but I worked in my home country) and the whole thing just shocked me. The price used to change as if someone (Board? Banks? Founders?) woke up and just threw a dart on a number chart and that became FMV of that day! Even when there’s no funding round or so!
• blackeyeblitzar 2y ago
  I wonder if part of the issue isn’t the startup world but the corporate world. There’s enough capital and anti competitive practices at big tech companies that startups are fighting for scraps. I would love to see a new movement to reshape antitrust laws and improve competition.
• NoMoreNicksLeft 2y ago
  >Dodgy accounting & staff retention meant that actually you don't get fuckyou money. What is fuckyou money at this point? Take the Mega Millions lottery jackpot, it's default is $20 million nominal. You get cash payout instead of annuity, now it's about $10 million. Maybe you live in a state without income tax (I do), but the feds get their cut, now it's $5 millionish. You look for a nicer house (been living in an apartment)... and, since you don't want to lose it to property tax arrears all that quickly, you budget for that too for the next 20 years. How much house can you afford? Turns out, you're getting at most some upper middle class home in a second class city. Maybe with a nice car in the garage too. No live-in maids and chefs, no 40,000sqft mansions with indoor Olympic swimming pools and gold-plated toilets. Hardly seems like fuckyou money at all. I think while we weren't looking, inflation snuck in and changed what fuckyou money actually was. You basically need to not just be a multimillionaire anymore, but a sub-billionaire.
  • diffxx 2y ago
    My definition is very different. It is about my ability to have control over my life in the areas that matter most to me. I value my time and personal development above material wealth (to a point). I don't need a giant house. I don't need regular fancy vacations or to own a car. I personally have been not working and living comfortably on much much less than 5mm in a high cost of living city for over five years. I do have to make many tradeoffs but I am happier than working a soul sucking job. It's not a path for everyone.
    • NoMoreNicksLeft 2y ago
      >I value my time and personal development abov That's a young man thing. Still trying to grow, to attract mates, etc. It switches (at least for those who develop correctly), to be able to provide for offspring and descendants material wealth is key. >I don't need a giant house. Perhaps, but we were talking about fuckyou money. Living in a crackerbox isn't an indication or test of fuckyou money... if Warren Buffet drives a beat up pickup truck, he's not interested in signalling fuckyou money. But he could also drive 31 different Ferraris, one for every day of the month right? My point was that fuckyou money has changed, and that by any measure even lottery jackpots aren't really fuckyou money anymore. Those are "yay, we get to send the kids to college without them being debt slaves" money. It's a strange world now days, that didn't used to be the case.
• z0r 2y ago
  Another reason to work at a startup is if you have subpar grades and the company is willing to take on a risky hire (and pay peanuts for the risk). An alternative for those who don't have the option of working for MANGA. Speaking from personal experience :)
• gnkyfrg 2y ago
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