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I never understood who takes up these offers. You want me to give up my $220k+ salary plus RSU (let's say worth $60k/yr), to join a startup and take $100k/yr sa

I never understood who takes up these offers. You want me to give up my $220k+ salary plus RSU (let's say worth $60k/yr), to join a startup and take $100k/yr salary. In effect, I'd be "investing" $180k/yr and putting in crazy hours for a 1% equity that gets diluted to nearly nothing in a few funding rounds. How does that make sense? You can only invest your time and salary cut into a single company, while angel and VC investor can invest their time and money into many companies. They only need 1 of those investments to skyrocket. You need 100% of your investments (size 1) to skyrocket for it to make sense. Sure, if you hit the jackpot and join Facebook, then you're set for life. But that's an extreme outlier, otherwise I wouldn't be using it as an example.

mppm 2y ago
It's even worth than that. The personal utility of money is definitely sublinear. Hence a small chance to make a lot of money is worth considerably less than getting its expected value with certainty.
haliskerbas 2y ago
It's to gaslight you into thinking the nineteenth shitty enterprise SaaS for ultra-niche market is going to make you a billionaire. In reality, you're just cheap labor for lining the pockets of the VCs who will sell off their shares to the next sucker at the first chance they get.
- umeshunni 2y ago
  The house always wins. In Vegas, casinos are the house. In Silicon Valley, VCs are the house.
duxup 2y ago
I'm going to ask maybe a silly question. Maybe not many people making $220 take these offers? There has to be a fair number of start ups that really don't "need" a $220k engineer if their business is "uber...but for cleaning your windows". It would be interesting to see the breakdown of who does take these roles. Granted "founding engineer" implys a lot so I'm not disagreeing with the premise or article, but sometimes on HN the idea that an engineer costs $200k+ is just assumed where often I think that isn't the case.
- ghaff 2y ago
  By and large, don't do something that you just hate unless that's your only option. But if you can find something you mostly like (and that's a pretty reasonable bar) for pretty good money, that's not a bad target.
- nfriedly 2y ago
  That's a good point. When I joined a startup as the 6th person, I was a college student working part-time freelance gigs and making maybe $30k. The startup was initially a freelance client, they offered to take me on as an employee for $40k part-time / $80k when I could work full time. They gave me some tiny amount of equity, probably less than 1%; it turned out to be worthless. But everything else was a significant improvement: I no longer had to juggle multiple clients and haggle to get paid, I got health insurance, and I had more money in my pocket.
- ErikAugust 2y ago
  Not many people are going to totally ignore their opportunity costs to join as a "founder-ish" engineer at a startup. I have taken a role like this before, but when I did so, I was making a lateral move from a compensation standpoint. This is without factoring in any expected value of equity (because there was none).
  - jvanderbot 2y ago
    100% agree. I'm happy to trade hypothetical equity in one startup for same salary and hypothetical equity in a brand new startup, if the new startup has just plain a cooler founder, or tech, or broader opportunity. As an early founding engineer, my impact is much much higher as well.
  - duxup 2y ago
    I'm willing to concede the highest paid engineers are almost by definition doing their opportunity costs math. I'm willing to also bet that most people do not do a lot of opportunity costs math. But as your example points out, like mine, maybe this whole idea of top paid engineers not getting paid, or even taking those jobs isn't a thing as much as we might imagine. "Uber ... but for walking your cat" might offer far less than 220k, but they also don't need that guy might be offering more lateral move type people / money.
OptionOfT 2y ago
You beat me to it. If the equity after vesting is the same as the paycut I take, then I'm taking all the risk here, but no reward.
el_benhameen 2y ago
I can imagine that hopping between these places might be fun for someone in their early 20s who is unattached and can focus all of their time on the grind. Live cheap, build stuff, have more of an impact than you would at a faang or m7 or whatever we’re calling them now. Maybe you make it big, or maybe you just build a network and get good experience, but not a terrible outcome either way. But yeah, once family and life outside of work need time and comp, no thanks.
refulgentis 2y ago
Your view was completely my view until 7 years at Google. When I joined, I was shocked how high the turnover was. And not anecdotally! there were stats you could slice and dice every which way, and...it was shocking. How!? This was paradise. After clearing enough years, and getting enough advice from people at 50+ who stayed at BigCo, once you got a pile o' money, it looks more like: $170K/yr + $30K bonus + $100K/yr RSUs at Google - $150K/yr existential dread. vs. startup: $150K/yr + $15K bonus + $2.5K/yr (1% chance of $250K/year) Increasing the money pile becomes not worth it once you've stacked Google RSUs, and the choking existential dread of what goes on inside BigCo is worth the pay difference. I know that sounds nuts. Hell, when I was doing my big "Where do I go now that I've sold my startup?" interview rounds, I also interviewed for positions with a couple ex-Googlers who told me it'd be awful to join there. I thought a lot about it and decided they were wrong, they didn't understand how little savings I had. And they were wrong: it was totally worth building the money pile so I could move on like they did, to more productive areas where there's room to grow. aside: I'm not sure anyone would get $220K/year base then only get $100K/year base. I usually see roughly the same base, frankly, its usually a bit higher than Google's. another aside: stereotypes are stereotypes, from what you characterize startups vs. BigCo as, I think you'd be very surprised how many Googlers feel about workload
- DanielHB 2y ago
  Could you elaborate on the existential dread? What causes it exactly?
  - deleted 2y ago
    [deleted]
  - refulgentis 2y ago
    Gosh this is hard. Excellent question. "Existential dread" was a cheap handwave. This is a random collection of thoughts. First thing I should say is none of what I'm going to say matters if you are the world's most well-adjusted person. i.e. you have 0 inherent desire to do anything other than A) get a paycheck B) do what boss says. The ex-Googlers I interviewed with put is as "you can't get anything done", which I took as a challenge. And succeeded. Then failed. But not because that's not what leadership wanted, it was the opposite, they had been asking for years: because I was low enough on the totem pole, and in engineering, in a way people could screw around and have 0 consequences. Hyperbole: every single job I've worked at was better managed than what Google had become at the end, including food service ones. There's a professionalism-as-don't-speak-up authoritarianism in play. Another handwave I've used to describe it is "humans are humans, everywhere.", This was the first time I was with a group of really, really smart people. Ivy Leaguers, etc. I dropped out from the #116 ranked university. I expected that meant the level of shitty behavior would be lower, but, it was higher. Much higher. There's much more training data accumulated in smart people. Making it easier to construct internal narratives for why somethings a bad idea, but, this was usually lazy and slotting into some stereotype. One lesson I learned quickly is there's a parable for every possible decision. Another problem was you had a ton of people who were just Ivy Leaguers who said "ehhh I guess finance is more evil?", ended up in tech, and really could not fundamentally understand at all why you'd do anything, or talk about anything, or think about anything, other than what someone in authority explicitly said to do and documented and had 0 ambiguity at all. This actually played well with the authoritarianism I mentioned, despite "thriving in ambiguity" being a catchphrase used in perf a lot. Last thing I'll mention: there were two major decision points that ended up causes an exponential increase in issues: #1 in...2018?...moving promotion review into the local team, instead of a panel of reviewers from throughout Google. Won't belabor the point too much, TL;DR: that's an excellent way to enable authoritarianism and adjacent issues, because no one can be good enough to just do an end-around. #2 in late 2022, moving performance reviews from a variety of feedback from collaborators to your manager and whoever your manager bothered picking. Anyone, if you've made it this far and are very curious, feel free to reach out to jp0hhhh@gmail for deeper conversation (replace the 0 with an o). I'm offering just to pay it forward, i.e. give what I didn't have before Google, someone with a direct sense of tradeoffs.
yieldcrv 2y ago
the 180-220k range is common in startups too, and I just ignore the equity basically when I’m on the market at all the smaller companies move faster so I just take them older mid size companies are the ones that compromise on base salary and take too long I just don’t and won’t do the studying adequate for FAANG
didip 2y ago
fr fr, the only way I will join your startup is if you have a very interesting idea and I will be coming in as a founder with a very different slice of pie than "founding engineer".
paulcole 2y ago
I would imagine that for some people $100,000 a year is enough? Or there are people who aren't getting $220k+ offers and $100,000 is what they can get? There's nothing inherently wrong or illogical about making less than the maximum amount of money you can make.
- uamgeoalsk 2y ago
  100k would be more than double my current salary, with more than a decade of experience. US salaries are fucking insane.
  - ceejayoz 2y ago
    They are, but my health insurance premiums (which don't cover everything) went up to $3,600/month this year, and I've got two kids going to college soon. I'll happily take substantially lower salaries for publicly funded healthcare and undergrad education.
    - jm20 2y ago
      The math simply never works out in favor of lower salaries/publicly funded healthcare for high paying US roles like software engineering. Even taking your (high, assuming family of 4) premiums and 0% employer contribution (very uncommon), that’s an additional $43k a year, pretax. US SWE salaries are double, sometimes triple international with absolute numbers at $50k+. This doesn’t even factor in general higher tax brackets abroad
      - fragmede 2y ago
        The problem is you can't put a price on intangible things like being scared of a medical bill. The premiums don't cover everything and if you (heaven forbid) get a curable form of cancer you're gonna be paying quite a bit out of pocket past the quoted $43k, and it's not just about the money, but dealing with the whole system as well. Getting claims denied and having to contest it, having a mystery bill hanging over your head. If you break an ankle, it might just be less hassle to buy the things you need off Amazon than deal with insurance. Meanwhile you can complain about eg long wait times in, say, Sweden, but the total deductible per year there is approximately $100 and then you don't pay more than that. Getting a curable cancer just doesn't have the same implication there. There's also other intangibles. Things like time off, infrastructure, social safety net, dating pool, culture, human rights, cost of living. inequality (good or bad). What's it worth in dollars to you for your daughter to be able to afford to buy a house someday when it also turns out she wants to be a painter when she grows up? I'm not making any argument for or against a particular county. What I'm saying is, live where you want to live. Money isn't everything so make sure to read past the numbers on a spreadsheet.
solfox 2y ago
To follow that line of thinking, it could be way more profitable for you to take your $180/yr "bonus" and put it into angel investments. If you have decent connections and have a good eye - you'll probably have a much higher expected return than your 1% at a startup.
- ghaff 2y ago
  Or just investments in an index fund. I know someone who mad a pretty big pile of money at a company and he told me that he could have done a lot better than angel investing. He still does some--but only companies he particularly believes in.
  - bathtub365 2y ago
    How does he know he could have done better? Did he actually calculate a realistic rate of return for high risk short term investing or did he assume he would reliably pick winners?
    - ghaff 2y ago
      I assume he just looked at his rate of return vs. NASDAQ/S&P over the same period. A lot of people here assume that startup investing is a road to wealth (that's only open for the wealthy) and that mostly isn't true.
catlover76 2y ago
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foota 2y ago
From my point of view, I make 400k right now with 7 years of experience at a large tech company. I could reasonably retire in a year or two at my current level of expenses. I could probably make the next level with a fair bit of work in something like 3 to 4 years from now and expect to make somewhere between 500k to 600k, but to me that doesn't seem to seriously change my life trajectory (this is only a bump of 70-140k after tax). Without devoting to something like 10 to 20 more years of working and becoming a director or something similarly soul sucking, I don't see a route where I could reasonably have much more than say 10 million 10 years from now. So I've thought about saving up enough to comfortably retire, and then going to work in a more risky company for the chance to get a life changing amount of equity (something more than single digit millions). I don't know that I will though, because the odds are seriously bad.
- tsunamifury 2y ago
  You've sub-optimized and you are too young to know it. Also you are very likely to be laid off or pushed out before you get to the goals you think are so obvious.
  - Jalad 2y ago
    > You've sub-optimized and you are too young to know it. Can you elaborate more on this? What would be a more optimal approach?
    - tsunamifury 2y ago
      Until you have a family and have set your next set of goals, you are likely to think you are in a better position than you are. When you set your goals as a single young techie you are in for a surprise when real life hits
  - foota 2y ago
    Maybe, hopefully I realize it by the time I'm not too young :) I don't know that I necessarily have goals. I definitely don't want to become a director or anything like that or feel like I need 10 million dollars to be happy, if that's what you got out of my post.
josefrichter 2y ago
Had exactly this conversation a couple of times. You are effectively asking me to invest $100k in your company. In exchange for what? My risk is even higher than yours, coz at 1%, I'll have no say in anything important. And I'm breaking even only once we reach 10M valuation.
- fragmede 2y ago
  If all it takes is a 10M valuation, sign me up! I mean, 10M sounds like a lot, but in terms of a remotely successful SaaS company (as opposed to a side project hoping for beer money), it's not that much. That's around 500 people paying $200/month, assuming a 10x multiplier of revenue to valuation. (or 5000 paying $20/month) The problem is that there's no easy way to cash out with just a valuation and you need the $100k now to pay for whatever, not when the board says there can be a liquidity event (which may never even happen).
renewiltord 2y ago
> You want me to give up my $220k+ salary plus RSU (let's say worth $60k/yr), to join a startup and take $100k/yr salary. Not really. They don't want you to give up anything or some do and you can just say no. The reality is that people want to find other people who want to work in startups to be their engineers. You really can't get top performance out of a guy who hates doing some work by paying him. You'd much rather get the guy who loves doing some work and pay him enough that he feels appreciated. Mercenary hires are useful in prop trading firms, but anywhere else the mercenary is better contracted than hired. Besides, startup salaries are not $100k/year and you can get 2% as a founding engineer. Taking more money to do a job you hate is a recipe for burnout.
- Cyph0n 2y ago
  I re-read the top-level comment and don’t see where the “hates the work” assumption is coming from. Or is expecting to be compensated fairly for effort a form of hating work?
- ConspiracyFact 2y ago
  This explains why, traditionally, founders donate 90% of their exit payout to charity.
hn_throwaway_99 2y ago
I think the biggest problem with these offers is that the payoff for the founders vs a "founding engineer" is so wildly out of whack despite minor differences in their work and effort. That is, after a seed round, founders typically (obviously "typically" is doing a lot of work here) retain ~80% of the company, and after a Series A ~20-30%. So, lets say there are 2 founders, and a founding engineer is hired shortly after the seed round. That means at that point each founder will have about 40x the equity of said "founding engineer". Yes, the founders had to come up with the idea and get the initial seed funding, but that process usually takes on the order of 3-6 months. The founding engineer is going to be working just as hard after starting as the founders (oftentimes harder), usually making similar cash compensation, for 40x less equity. My main point is if you think you might want to be a "founding engineer", just be a founder instead. As a good example, consider Nathan Blecharczyk, one of the 3 cofounders of AirBnB, and was its original CTO and coded its first website. He's now worth about $10 billion and according to Wikipedia is the 203rd richest person on the planet. If he instead took a job as "founding engineer" at AirBnB, and let Brian Chesky and Joe Gebbia instead take on the sole founder titles, he'd be worth orders of magnitude less (granted an order of magnitude less than $10 billion is still hundreds of million, but point being there is no reason he should be compensated less than his other cofounders).
- rgbrgb 2y ago
  IMO if you're reasonably talented and working harder than the founders as an early employee, it's time to value your options at 0 and look for another job.
  - duxup 2y ago
    Even beyond just the success of the company, I'd find it demoralizing (unless they paid me more than I would expect). I knew someone who was the lone engineer at a start up who got a call from the founders, all on the golf course who wanted to talk about a new feature. At first he thought it was a joke because it seemed absurd, no they were serious. He quit the next day. He figured they were non serious founders. Company just rand itself out of money not too long after.
- deleted 2y ago
marssaxman 2y ago
Maybe it's not about the money.
- deleted 2y ago
  [deleted]
- closeparen 2y ago
  Making career decisions "not about the money" is an incredibly luxury for someone who needs to live or raise a family in the regions where tech startups are a notable factor.
  - marssaxman 2y ago
    Perhaps that's the answer to the previous commenter's question about "who takes these offers", then. Having a tech career at all is an incredible luxury compared to pretty much any other way of making a living. It is easy to have a comfortable life without bothering to chase the high end of the market. One cannot ignore compensation, but neither need it be the focus of one's career decisions.
    - deleted 2y ago
      [deleted]
    - closeparen 2y ago
      It's not easy to have a comfortable life in a tech hub! Your home, commute, school district, etc. will be incredibly bad compared to a replacement level college-educated career if you aren't already wealthy and don't make comp a primary focus.
      - marssaxman 2y ago
        Do you consider Seattle to be a "tech hub"? I suppose it depends on the level of your expectations, but it's hard for me to imagine how anyone could call my family's situation "incredibly bad". Despite my never having been wealthy nor made comp a primary focus, we have a nice modern house in the center of the city, near friends and everything we need, where I can walk to work every day. It's true that the school district is not so good, but that's what private school is for. What is a "replacement level college-educated career"? That's not a phrase I have heard before.
deleted 2y ago
[deleted]
gopalv 2y ago
> Sure, if you hit the jackpot and join Facebook, then you're set for life. Back in 2008 when Yahoo was laying off people, joining Facebook was something people did out of desperation. That was an 85k/year job with an expectation of "all work, no life". It was not seen as a good option, but most of the time the only place that was hiring during the Great Recession. A decade later, it was a completely different thing. Yahoo was dead, Google+ (Orkut) had failed & FB had Instagram & Whatsapp.
msteffen 2y ago
Hopefully this doesn’t mark me as a troublemaker among the founders here, but this is a good way to negotiate your salary. As in “I’m valuing your equity at 80% of its 1xPP price at your last round, which makes my total comp 100 + (grant x 0.8 x PP/4) = N. I would accept an offer right away at 1.3N, preferably in cash/equity, but at the current level, I will need some time to evaluate my options to see if this makes sense for me.”
tasuki 2y ago
> I never understood who takes up these offers. I took up an offer to work for 1/10th of my previous salary and half the working hours. Life is not all about money.

mppm 2y ago

It's even worth than that. The personal utility of money is definitely sublinear. Hence a small chance to make a lot of money is worth considerably less than getting its expected value with certainty.

haliskerbas 2y ago

It's to gaslight you into thinking the nineteenth shitty enterprise SaaS for ultra-niche market is going to make you a billionaire. In reality, you're just cheap labor for lining the pockets of the VCs who will sell off their shares to the next sucker at the first chance they get.

umeshunni 2y ago
The house always wins. In Vegas, casinos are the house. In Silicon Valley, VCs are the house.

duxup 2y ago

I'm going to ask maybe a silly question. Maybe not many people making $220 take these offers? There has to be a fair number of start ups that really don't "need" a $220k engineer if their business is "uber...but for cleaning your windows". It would be interesting to see the breakdown of who does take these roles. Granted "founding engineer" implys a lot so I'm not disagreeing with the premise or article, but sometimes on HN the idea that an engineer costs $200k+ is just assumed where often I think that isn't the case.

ghaff 2y ago
By and large, don't do something that you just hate unless that's your only option. But if you can find something you mostly like (and that's a pretty reasonable bar) for pretty good money, that's not a bad target.
nfriedly 2y ago
That's a good point. When I joined a startup as the 6th person, I was a college student working part-time freelance gigs and making maybe $30k. The startup was initially a freelance client, they offered to take me on as an employee for $40k part-time / $80k when I could work full time. They gave me some tiny amount of equity, probably less than 1%; it turned out to be worthless. But everything else was a significant improvement: I no longer had to juggle multiple clients and haggle to get paid, I got health insurance, and I had more money in my pocket.
ErikAugust 2y ago
Not many people are going to totally ignore their opportunity costs to join as a "founder-ish" engineer at a startup. I have taken a role like this before, but when I did so, I was making a lateral move from a compensation standpoint. This is without factoring in any expected value of equity (because there was none).
- jvanderbot 2y ago
  100% agree. I'm happy to trade hypothetical equity in one startup for same salary and hypothetical equity in a brand new startup, if the new startup has just plain a cooler founder, or tech, or broader opportunity. As an early founding engineer, my impact is much much higher as well.
- duxup 2y ago
  I'm willing to concede the highest paid engineers are almost by definition doing their opportunity costs math. I'm willing to also bet that most people do not do a lot of opportunity costs math. But as your example points out, like mine, maybe this whole idea of top paid engineers not getting paid, or even taking those jobs isn't a thing as much as we might imagine. "Uber ... but for walking your cat" might offer far less than 220k, but they also don't need that guy might be offering more lateral move type people / money.

OptionOfT 2y ago

You beat me to it. If the equity after vesting is the same as the paycut I take, then I'm taking all the risk here, but no reward.

el_benhameen 2y ago

I can imagine that hopping between these places might be fun for someone in their early 20s who is unattached and can focus all of their time on the grind. Live cheap, build stuff, have more of an impact than you would at a faang or m7 or whatever we’re calling them now. Maybe you make it big, or maybe you just build a network and get good experience, but not a terrible outcome either way. But yeah, once family and life outside of work need time and comp, no thanks.

refulgentis 2y ago

Your view was completely my view until 7 years at Google. When I joined, I was shocked how high the turnover was. And not anecdotally! there were stats you could slice and dice every which way, and...it was shocking. How!? This was paradise. After clearing enough years, and getting enough advice from people at 50+ who stayed at BigCo, once you got a pile o' money, it looks more like: $170K/yr + $30K bonus + $100K/yr RSUs at Google - $150K/yr existential dread. vs. startup: $150K/yr + $15K bonus + $2.5K/yr (1% chance of $250K/year) Increasing the money pile becomes not worth it once you've stacked Google RSUs, and the choking existential dread of what goes on inside BigCo is worth the pay difference. I know that sounds nuts. Hell, when I was doing my big "Where do I go now that I've sold my startup?" interview rounds, I also interviewed for positions with a couple ex-Googlers who told me it'd be awful to join there. I thought a lot about it and decided they were wrong, they didn't understand how little savings I had. And they were wrong: it was totally worth building the money pile so I could move on like they did, to more productive areas where there's room to grow. aside: I'm not sure anyone would get $220K/year base then only get $100K/year base. I usually see roughly the same base, frankly, its usually a bit higher than Google's. another aside: stereotypes are stereotypes, from what you characterize startups vs. BigCo as, I think you'd be very surprised how many Googlers feel about workload

DanielHB 2y ago
Could you elaborate on the existential dread? What causes it exactly?
- deleted 2y ago
  [deleted]
- refulgentis 2y ago
  Gosh this is hard. Excellent question. "Existential dread" was a cheap handwave. This is a random collection of thoughts. First thing I should say is none of what I'm going to say matters if you are the world's most well-adjusted person. i.e. you have 0 inherent desire to do anything other than A) get a paycheck B) do what boss says. The ex-Googlers I interviewed with put is as "you can't get anything done", which I took as a challenge. And succeeded. Then failed. But not because that's not what leadership wanted, it was the opposite, they had been asking for years: because I was low enough on the totem pole, and in engineering, in a way people could screw around and have 0 consequences. Hyperbole: every single job I've worked at was better managed than what Google had become at the end, including food service ones. There's a professionalism-as-don't-speak-up authoritarianism in play. Another handwave I've used to describe it is "humans are humans, everywhere.", This was the first time I was with a group of really, really smart people. Ivy Leaguers, etc. I dropped out from the #116 ranked university. I expected that meant the level of shitty behavior would be lower, but, it was higher. Much higher. There's much more training data accumulated in smart people. Making it easier to construct internal narratives for why somethings a bad idea, but, this was usually lazy and slotting into some stereotype. One lesson I learned quickly is there's a parable for every possible decision. Another problem was you had a ton of people who were just Ivy Leaguers who said "ehhh I guess finance is more evil?", ended up in tech, and really could not fundamentally understand at all why you'd do anything, or talk about anything, or think about anything, other than what someone in authority explicitly said to do and documented and had 0 ambiguity at all. This actually played well with the authoritarianism I mentioned, despite "thriving in ambiguity" being a catchphrase used in perf a lot. Last thing I'll mention: there were two major decision points that ended up causes an exponential increase in issues: #1 in...2018?...moving promotion review into the local team, instead of a panel of reviewers from throughout Google. Won't belabor the point too much, TL;DR: that's an excellent way to enable authoritarianism and adjacent issues, because no one can be good enough to just do an end-around. #2 in late 2022, moving performance reviews from a variety of feedback from collaborators to your manager and whoever your manager bothered picking. Anyone, if you've made it this far and are very curious, feel free to reach out to jp0hhhh@gmail for deeper conversation (replace the 0 with an o). I'm offering just to pay it forward, i.e. give what I didn't have before Google, someone with a direct sense of tradeoffs.

yieldcrv 2y ago

the 180-220k range is common in startups too, and I just ignore the equity basically when I’m on the market at all the smaller companies move faster so I just take them older mid size companies are the ones that compromise on base salary and take too long I just don’t and won’t do the studying adequate for FAANG

didip 2y ago

fr fr, the only way I will join your startup is if you have a very interesting idea and I will be coming in as a founder with a very different slice of pie than "founding engineer".

paulcole 2y ago

I would imagine that for some people $100,000 a year is enough? Or there are people who aren't getting $220k+ offers and $100,000 is what they can get? There's nothing inherently wrong or illogical about making less than the maximum amount of money you can make.

uamgeoalsk 2y ago
100k would be more than double my current salary, with more than a decade of experience. US salaries are fucking insane.
- ceejayoz 2y ago
  They are, but my health insurance premiums (which don't cover everything) went up to $3,600/month this year, and I've got two kids going to college soon. I'll happily take substantially lower salaries for publicly funded healthcare and undergrad education.
  - jm20 2y ago
    The math simply never works out in favor of lower salaries/publicly funded healthcare for high paying US roles like software engineering. Even taking your (high, assuming family of 4) premiums and 0% employer contribution (very uncommon), that’s an additional $43k a year, pretax. US SWE salaries are double, sometimes triple international with absolute numbers at $50k+. This doesn’t even factor in general higher tax brackets abroad
    - fragmede 2y ago
      The problem is you can't put a price on intangible things like being scared of a medical bill. The premiums don't cover everything and if you (heaven forbid) get a curable form of cancer you're gonna be paying quite a bit out of pocket past the quoted $43k, and it's not just about the money, but dealing with the whole system as well. Getting claims denied and having to contest it, having a mystery bill hanging over your head. If you break an ankle, it might just be less hassle to buy the things you need off Amazon than deal with insurance. Meanwhile you can complain about eg long wait times in, say, Sweden, but the total deductible per year there is approximately $100 and then you don't pay more than that. Getting a curable cancer just doesn't have the same implication there. There's also other intangibles. Things like time off, infrastructure, social safety net, dating pool, culture, human rights, cost of living. inequality (good or bad). What's it worth in dollars to you for your daughter to be able to afford to buy a house someday when it also turns out she wants to be a painter when she grows up? I'm not making any argument for or against a particular county. What I'm saying is, live where you want to live. Money isn't everything so make sure to read past the numbers on a spreadsheet.

solfox 2y ago

To follow that line of thinking, it could be way more profitable for you to take your $180/yr "bonus" and put it into angel investments. If you have decent connections and have a good eye - you'll probably have a much higher expected return than your 1% at a startup.

ghaff 2y ago
Or just investments in an index fund. I know someone who mad a pretty big pile of money at a company and he told me that he could have done a lot better than angel investing. He still does some--but only companies he particularly believes in.
- bathtub365 2y ago
  How does he know he could have done better? Did he actually calculate a realistic rate of return for high risk short term investing or did he assume he would reliably pick winners?
  - ghaff 2y ago
    I assume he just looked at his rate of return vs. NASDAQ/S&P over the same period. A lot of people here assume that startup investing is a road to wealth (that's only open for the wealthy) and that mostly isn't true.

catlover76 2y ago

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foota 2y ago

From my point of view, I make 400k right now with 7 years of experience at a large tech company. I could reasonably retire in a year or two at my current level of expenses. I could probably make the next level with a fair bit of work in something like 3 to 4 years from now and expect to make somewhere between 500k to 600k, but to me that doesn't seem to seriously change my life trajectory (this is only a bump of 70-140k after tax). Without devoting to something like 10 to 20 more years of working and becoming a director or something similarly soul sucking, I don't see a route where I could reasonably have much more than say 10 million 10 years from now. So I've thought about saving up enough to comfortably retire, and then going to work in a more risky company for the chance to get a life changing amount of equity (something more than single digit millions). I don't know that I will though, because the odds are seriously bad.

tsunamifury 2y ago
You've sub-optimized and you are too young to know it. Also you are very likely to be laid off or pushed out before you get to the goals you think are so obvious.
- Jalad 2y ago
  > You've sub-optimized and you are too young to know it. Can you elaborate more on this? What would be a more optimal approach?
  - tsunamifury 2y ago
    Until you have a family and have set your next set of goals, you are likely to think you are in a better position than you are. When you set your goals as a single young techie you are in for a surprise when real life hits
- foota 2y ago
  Maybe, hopefully I realize it by the time I'm not too young :) I don't know that I necessarily have goals. I definitely don't want to become a director or anything like that or feel like I need 10 million dollars to be happy, if that's what you got out of my post.

josefrichter 2y ago

Had exactly this conversation a couple of times. You are effectively asking me to invest $100k in your company. In exchange for what? My risk is even higher than yours, coz at 1%, I'll have no say in anything important. And I'm breaking even only once we reach 10M valuation.

fragmede 2y ago
If all it takes is a 10M valuation, sign me up! I mean, 10M sounds like a lot, but in terms of a remotely successful SaaS company (as opposed to a side project hoping for beer money), it's not that much. That's around 500 people paying $200/month, assuming a 10x multiplier of revenue to valuation. (or 5000 paying $20/month) The problem is that there's no easy way to cash out with just a valuation and you need the $100k now to pay for whatever, not when the board says there can be a liquidity event (which may never even happen).

renewiltord 2y ago

> You want me to give up my $220k+ salary plus RSU (let's say worth $60k/yr), to join a startup and take $100k/yr salary. Not really. They don't want you to give up anything or some do and you can just say no. The reality is that people want to find other people who want to work in startups to be their engineers. You really can't get top performance out of a guy who hates doing some work by paying him. You'd much rather get the guy who loves doing some work and pay him enough that he feels appreciated. Mercenary hires are useful in prop trading firms, but anywhere else the mercenary is better contracted than hired. Besides, startup salaries are not $100k/year and you can get 2% as a founding engineer. Taking more money to do a job you hate is a recipe for burnout.

Cyph0n 2y ago
I re-read the top-level comment and don’t see where the “hates the work” assumption is coming from. Or is expecting to be compensated fairly for effort a form of hating work?
ConspiracyFact 2y ago
This explains why, traditionally, founders donate 90% of their exit payout to charity.

hn_throwaway_99 2y ago

I think the biggest problem with these offers is that the payoff for the founders vs a "founding engineer" is so wildly out of whack despite minor differences in their work and effort. That is, after a seed round, founders typically (obviously "typically" is doing a lot of work here) retain ~80% of the company, and after a Series A ~20-30%. So, lets say there are 2 founders, and a founding engineer is hired shortly after the seed round. That means at that point each founder will have about 40x the equity of said "founding engineer". Yes, the founders had to come up with the idea and get the initial seed funding, but that process usually takes on the order of 3-6 months. The founding engineer is going to be working just as hard after starting as the founders (oftentimes harder), usually making similar cash compensation, for 40x less equity. My main point is if you think you might want to be a "founding engineer", just be a founder instead. As a good example, consider Nathan Blecharczyk, one of the 3 cofounders of AirBnB, and was its original CTO and coded its first website. He's now worth about $10 billion and according to Wikipedia is the 203rd richest person on the planet. If he instead took a job as "founding engineer" at AirBnB, and let Brian Chesky and Joe Gebbia instead take on the sole founder titles, he'd be worth orders of magnitude less (granted an order of magnitude less than $10 billion is still hundreds of million, but point being there is no reason he should be compensated less than his other cofounders).

rgbrgb 2y ago
IMO if you're reasonably talented and working harder than the founders as an early employee, it's time to value your options at 0 and look for another job.
- duxup 2y ago
  Even beyond just the success of the company, I'd find it demoralizing (unless they paid me more than I would expect). I knew someone who was the lone engineer at a start up who got a call from the founders, all on the golf course who wanted to talk about a new feature. At first he thought it was a joke because it seemed absurd, no they were serious. He quit the next day. He figured they were non serious founders. Company just rand itself out of money not too long after.
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marssaxman 2y ago

Maybe it's not about the money.

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closeparen 2y ago
Making career decisions "not about the money" is an incredibly luxury for someone who needs to live or raise a family in the regions where tech startups are a notable factor.
- marssaxman 2y ago
  Perhaps that's the answer to the previous commenter's question about "who takes these offers", then. Having a tech career at all is an incredible luxury compared to pretty much any other way of making a living. It is easy to have a comfortable life without bothering to chase the high end of the market. One cannot ignore compensation, but neither need it be the focus of one's career decisions.
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  - closeparen 2y ago
    It's not easy to have a comfortable life in a tech hub! Your home, commute, school district, etc. will be incredibly bad compared to a replacement level college-educated career if you aren't already wealthy and don't make comp a primary focus.
    - marssaxman 2y ago
      Do you consider Seattle to be a "tech hub"? I suppose it depends on the level of your expectations, but it's hard for me to imagine how anyone could call my family's situation "incredibly bad". Despite my never having been wealthy nor made comp a primary focus, we have a nice modern house in the center of the city, near friends and everything we need, where I can walk to work every day. It's true that the school district is not so good, but that's what private school is for. What is a "replacement level college-educated career"? That's not a phrase I have heard before.

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gopalv 2y ago

> Sure, if you hit the jackpot and join Facebook, then you're set for life. Back in 2008 when Yahoo was laying off people, joining Facebook was something people did out of desperation. That was an 85k/year job with an expectation of "all work, no life". It was not seen as a good option, but most of the time the only place that was hiring during the Great Recession. A decade later, it was a completely different thing. Yahoo was dead, Google+ (Orkut) had failed & FB had Instagram & Whatsapp.

msteffen 2y ago

Hopefully this doesn’t mark me as a troublemaker among the founders here, but this is a good way to negotiate your salary. As in “I’m valuing your equity at 80% of its 1xPP price at your last round, which makes my total comp 100 + (grant x 0.8 x PP/4) = N. I would accept an offer right away at 1.3N, preferably in cash/equity, but at the current level, I will need some time to evaluate my options to see if this makes sense for me.”

tasuki 2y ago

> I never understood who takes up these offers. I took up an offer to work for 1/10th of my previous salary and half the working hours. Life is not all about money.