4 ms·

I wonder if such deals will create employee lawsuits. I'd certainly be looking at legal options if I was one of the founding employees.

by lumost 10mo ago

wmf 10mo ago
The employees are getting paid twice.
- sleepingreset 10mo ago
  wdym?
  - wmf 10mo ago
    They get a share of the $20B plus now they get to work for Nvidia.
- idiotsecant 10mo ago
  The employees are getting paid zero times.
  - petcat 10mo ago
    do they make a salary
    - simonh 10mo ago
      If part of their remuneration is in shares, they have a legitimate interest in the value of those shares.
    - crote 10mo ago
      Startups often pay a shitty salary in exchange for a decent chunk of stock options, with the implicit promise that you'll make bank if you work hard and make the company successful. Getting screwed out of your payout by such a totally-not-an-acquisition is wage theft. It's like promising a sales-related bonus at the beginning of the year, and then in December changing the metric to "AI-related sales to the CEO's golf buddies".
      - tgma 10mo ago
        The implicit promise is only partially true. Very rarely you can find a proven talent that will actually forego significant salary. Often time when that happens the person is close to founders and will have a significant role in shaping the startup and will get quasi-acquired too. This promise may have been more true before 2010s where public companies were not paying as much in liquid cash and private companies were not valued so aggressively. Fact is most employees take the startup offer because they don't actually have a liquid offer that's super competitive at that moment, or they are just kind of bored and taking a break of the corporate job that does not give them too many responsibilities, i.e. they are compensated via the title, not just the promise of making bank.
        lumost 10mo ago
        That just means you’re pulling from the lower end of the talent pool. There is nothing wrong with this, but usually talent is correlated with outcome. Most hot startups which are going places are near impossible to get into even for folks with good offers.
        tgma 10mo ago
        Your last sentence is not mutually exclusive with my statement. Both could be simultaneously true. The sheer number of big company employees compared to hot startup makes it hard for everyone good to get into the startup, especially considering they usually have more specific needs. That said it could also be the case that the hot startup cannot easily get good employees from big company. My point was more that the high end ones they do get are usually in the front piece of the airplane in the acquisition split. Also, the really hot startups are actually paying quite a bit of cash upfront so the original premise of employee sacrifice isn’t as true.
      - petcat 10mo ago
        Startup options are worthless. The only value most people will ever extract from a startup is the experience they had working there, and the salary that was put in their bank account. I understand that a lot of inexperienced people (like in this thread) think they're going to get rich though. No, it is not "wage theft" to not get rich when the company exits (by whatever means).
sandworm101 10mo ago
>> one of the founding employees If you were an employee, you were not a founder. A founding-employee would be someone who explicitly "invested" time/money into a company without compensation. If you are also an employee earning a wage you better have a written agreement stating what amount was "investment" and what amount was compensated wage.
- lumost 10mo ago
  Startups typically offer employees, particularly early employees, substantial equity compensation. If the employer is offering this compensation in bad faith, or otherwise preferring one equity holder over another without an explicit contract - then they are at the very least a crappy business partner. A founding engineer with a 2% stake could be missing out on 5-10 million of this transaction. As an aside, most founders are paid during the entire project. It’s not hard to raise a preseed round to get yourself paid for 6-24 months to work on an idea. If a founder chose to bootstrap - that’s all fine, but let’s not pretend that the employees aren’t taking massive career risks vs “standard” employers.
  - lovich 10mo ago
    > If the employer is offering this compensation in bad faith, or otherwise preferring one equity holder over another without an explicit contract - then they are at the very least a crappy business partner. I don’t know about you, but every company I’ve ever worked at is a shitty business partner if that’s the metric. The standard has always been I get what we agreed to if I was lucky, and otherwise I got full “I’ve altered the deal, pray I don’t alter further” and dared you to defend your rights. I actually have called their bluff a few times and gotten some money out of it, but it was always a year long event or more to resolution and involved risking even more money on lawyers.
- crote 10mo ago
  Just one slight problem: people need to eat, and food costs money. Your startup won't succeed when its founder starves to death. It's why the founder will usually get a bunch of cash during investment rounds [0]: they can't focus on the company if they are constantly worried about cash in their personal life. Unless the founder is already independently wealthy, it is a guarantee that they'll be employed by the company and being paid a living wage. Heck, in some countries this is even legally required! According to your logic, no successful startup will ever have a founder, as any form of pay instantly degrades them to regular employee, and any kind risk taken and below-market salary is completely irrelevant. Never mind the fact that they are taking home a minimum-wage salary while working 100 hours a week - they are earning a wage so they can't possibly be a founder. So if this logic already breaks down for the founder, why couldn't it also break down for early employees whose compensation is mostly in stock options? How is their situation any different from the founder's? [0]: https://www.stefantheard.com/silicon-valleys-best-kept-secret-founder-liquidity/ https://www.stefantheard.com/silicon-valleys-best-kept-secre...
sandworm101 10mo ago
>> one of the founding employees If you were an employee, you were not a founder. A founding-employee would be someone who explicitly "invested" uncompensated time/money into a company without compensation and also worked as an employee. If you are also an employee earning a wage you better have a written agreement stating what amount was "investment" and what amount was compensated wage.
- deleted 10mo ago
  [deleted]
SilverElfin 10mo ago
It should. Look at what happened at Windsurf when Google did something like this https://news.ycombinator.com/item?id=44673296 https://news.ycombinator.com/item?id=44673296

I wonder if such deals will create employee lawsuits. I'd certainly be looking at legal options if I was one of the founding employees.

by lumost 10mo ago

I wonder if such deals will create employee lawsuits. I'd certainly be looking at legal options if I was one of the founding employees.

wmf 10mo ago

The employees are getting paid twice.

sleepingreset 10mo ago
wdym?
- wmf 10mo ago
  They get a share of the $20B plus now they get to work for Nvidia.
idiotsecant 10mo ago
The employees are getting paid zero times.
- petcat 10mo ago
  do they make a salary
  - simonh 10mo ago
    If part of their remuneration is in shares, they have a legitimate interest in the value of those shares.
  - crote 10mo ago
    Startups often pay a shitty salary in exchange for a decent chunk of stock options, with the implicit promise that you'll make bank if you work hard and make the company successful. Getting screwed out of your payout by such a totally-not-an-acquisition is wage theft. It's like promising a sales-related bonus at the beginning of the year, and then in December changing the metric to "AI-related sales to the CEO's golf buddies".
    - tgma 10mo ago
      The implicit promise is only partially true. Very rarely you can find a proven talent that will actually forego significant salary. Often time when that happens the person is close to founders and will have a significant role in shaping the startup and will get quasi-acquired too. This promise may have been more true before 2010s where public companies were not paying as much in liquid cash and private companies were not valued so aggressively. Fact is most employees take the startup offer because they don't actually have a liquid offer that's super competitive at that moment, or they are just kind of bored and taking a break of the corporate job that does not give them too many responsibilities, i.e. they are compensated via the title, not just the promise of making bank.
      - lumost 10mo ago
        That just means you’re pulling from the lower end of the talent pool. There is nothing wrong with this, but usually talent is correlated with outcome. Most hot startups which are going places are near impossible to get into even for folks with good offers.
        tgma 10mo ago
        Your last sentence is not mutually exclusive with my statement. Both could be simultaneously true. The sheer number of big company employees compared to hot startup makes it hard for everyone good to get into the startup, especially considering they usually have more specific needs. That said it could also be the case that the hot startup cannot easily get good employees from big company. My point was more that the high end ones they do get are usually in the front piece of the airplane in the acquisition split. Also, the really hot startups are actually paying quite a bit of cash upfront so the original premise of employee sacrifice isn’t as true.
    - petcat 10mo ago
      Startup options are worthless. The only value most people will ever extract from a startup is the experience they had working there, and the salary that was put in their bank account. I understand that a lot of inexperienced people (like in this thread) think they're going to get rich though. No, it is not "wage theft" to not get rich when the company exits (by whatever means).

sandworm101 10mo ago

>> one of the founding employees If you were an employee, you were not a founder. A founding-employee would be someone who explicitly "invested" time/money into a company without compensation. If you are also an employee earning a wage you better have a written agreement stating what amount was "investment" and what amount was compensated wage.

lumost 10mo ago
Startups typically offer employees, particularly early employees, substantial equity compensation. If the employer is offering this compensation in bad faith, or otherwise preferring one equity holder over another without an explicit contract - then they are at the very least a crappy business partner. A founding engineer with a 2% stake could be missing out on 5-10 million of this transaction. As an aside, most founders are paid during the entire project. It’s not hard to raise a preseed round to get yourself paid for 6-24 months to work on an idea. If a founder chose to bootstrap - that’s all fine, but let’s not pretend that the employees aren’t taking massive career risks vs “standard” employers.
- lovich 10mo ago
  > If the employer is offering this compensation in bad faith, or otherwise preferring one equity holder over another without an explicit contract - then they are at the very least a crappy business partner. I don’t know about you, but every company I’ve ever worked at is a shitty business partner if that’s the metric. The standard has always been I get what we agreed to if I was lucky, and otherwise I got full “I’ve altered the deal, pray I don’t alter further” and dared you to defend your rights. I actually have called their bluff a few times and gotten some money out of it, but it was always a year long event or more to resolution and involved risking even more money on lawyers.
crote 10mo ago
Just one slight problem: people need to eat, and food costs money. Your startup won't succeed when its founder starves to death. It's why the founder will usually get a bunch of cash during investment rounds [0]: they can't focus on the company if they are constantly worried about cash in their personal life. Unless the founder is already independently wealthy, it is a guarantee that they'll be employed by the company and being paid a living wage. Heck, in some countries this is even legally required! According to your logic, no successful startup will ever have a founder, as any form of pay instantly degrades them to regular employee, and any kind risk taken and below-market salary is completely irrelevant. Never mind the fact that they are taking home a minimum-wage salary while working 100 hours a week - they are earning a wage so they can't possibly be a founder. So if this logic already breaks down for the founder, why couldn't it also break down for early employees whose compensation is mostly in stock options? How is their situation any different from the founder's? [0]: https://www.stefantheard.com/silicon-valleys-best-kept-secret-founder-liquidity/ https://www.stefantheard.com/silicon-valleys-best-kept-secre...

sandworm101 10mo ago

>> one of the founding employees If you were an employee, you were not a founder. A founding-employee would be someone who explicitly "invested" uncompensated time/money into a company without compensation and also worked as an employee. If you are also an employee earning a wage you better have a written agreement stating what amount was "investment" and what amount was compensated wage.

deleted 10mo ago
[deleted]

SilverElfin 10mo ago

It should. Look at what happened at Windsurf when Google did something like this https://news.ycombinator.com/item?id=44673296 https://news.ycombinator.com/item?id=44673296