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I'm try to imagine, as a founder, saying this to a VC: "In order to start this new company, I'll need to leave my current job. which pays very well and where I

I'm try to imagine, as a founder, saying this to a VC: "In order to start this new company, I'll need to leave my current job. which pays very well and where I've spent years moving up the org chart. This new company is very risky. We might not hit our performance targets. So... I'll need a golden parachute, ya know, just in case I can't cut it." I don't need to tell you what the VC's logical response would be. Too bad that logic doesn't apply to "top management".

argonaut 13y ago
Key difference: de Castro was (presumably) poached by Marissa. This is pure speculation, but one way for her to have done it would be to offer downside protection.
vidarh 13y ago
As a founder, you take a gamble and the potential payoff is your shares. As an incoming exec hired afterwards you are likely to get options only, for a far smaller portion. That said, not a golden parachute and certainly not the kind of amounts in this article, but I have insisted on clauses related to salary increases in agreements with VC's in the past. In my first VC funded started, we'd all agreed on a fairly low salary to keep costs down initially, but I pointed out it was not sustainable and that I wanted a clause in to put a floor on our salary adjustments at a specific point (I don't remember if it was 6 months or 12 months). They tried to pull the "oh, sure, I'm sure we can adjust salaries later, it's just a minor thing, no need to put it in the agreement". But they yielded when I then came back with a two line amendment to the agreement and told them "since it's such a small thing, you won't mind if I insert these two lines, will you, since I'm sure you were serious when you agreed we'd be able to do the raises?" I don't think they particularly liked me afterwards, but I'm glad I insisted given what I saw from one of the VC's afterwards.
soneca 13y ago
Before making any conclusion, compare the ratios of your founder salary/your startup's revenue and of De Castro salary/Yahoo's revenue. I would guess the conclusion is that even that "$25k/year" may be too much and De Castro was ok. Unfair to compare absolute values of both parachutes but not both companies sizes.

argonaut 13y ago

Key difference: de Castro was (presumably) poached by Marissa. This is pure speculation, but one way for her to have done it would be to offer downside protection.

vidarh 13y ago

As a founder, you take a gamble and the potential payoff is your shares. As an incoming exec hired afterwards you are likely to get options only, for a far smaller portion. That said, not a golden parachute and certainly not the kind of amounts in this article, but I have insisted on clauses related to salary increases in agreements with VC's in the past. In my first VC funded started, we'd all agreed on a fairly low salary to keep costs down initially, but I pointed out it was not sustainable and that I wanted a clause in to put a floor on our salary adjustments at a specific point (I don't remember if it was 6 months or 12 months). They tried to pull the "oh, sure, I'm sure we can adjust salaries later, it's just a minor thing, no need to put it in the agreement". But they yielded when I then came back with a two line amendment to the agreement and told them "since it's such a small thing, you won't mind if I insert these two lines, will you, since I'm sure you were serious when you agreed we'd be able to do the raises?" I don't think they particularly liked me afterwards, but I'm glad I insisted given what I saw from one of the VC's afterwards.

soneca 13y ago

Before making any conclusion, compare the ratios of your founder salary/your startup's revenue and of De Castro salary/Yahoo's revenue. I would guess the conclusion is that even that "$25k/year" may be too much and De Castro was ok. Unfair to compare absolute values of both parachutes but not both companies sizes.