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And the average engineer who thought they'd be rich, probably owns 0.0002%. Have fun with your 200k! Startups are such a scam for the employees.

klochner 13y ago
The average engineer likely wasn't taking a (cash) pay cut to work there. Working at a company that has raised $400M is closer to a post-IPO experience than a startup.
- pyrrhotech 13y ago
  I've worked at a couple startups as well as a couple big companies. My salary + bonus has always been much, much higher at large companies than the startups. I also worked much less, so my effective per hour pay was double or more. Perhaps I got the short end of the stick, but I've never seen a dime from my stock options at these companies. One of which was aquired for a decent amount more than the valuation of the company at the time my shares were issued. I suppose the preferrreds took it all. It wouldn't have been that much anyway. Maybe 50 or 100k. In the best realistic case, you are looking at 3-5 years of engineering pay as a one time exit after years of putting in extra hours and probably being underpaid. That's been my experience at least as well as everyone I personally know who has worked in the Bay Area the past decade.
  - klochner 13y ago
    Certainly a lot of start-ups take advantage of engineers, I was more making the case that Box isn't really a start-up so I wouldn't expect them to have a big upside on IPO. There are some specific reasons to join a start-up, and hitting the unicorn lottery shouldn't be one of them. Also, you should be taking a market salary and working sane hours, which seems to be more the case in the last 2-3 years, though YMMV.
nilkn 13y ago
I think you're assuming that the employees were making large professional and financial sacrifices to work at Box. Considering the size of the company and the amount of funding, they most likely weren't. A random $200k payoff on top of a market competitive salary and benefits package is nothing to sneeze at. A job is not a scam just because it doesn't make you a multimillionaire over night.
- pyrrhotech 13y ago
  I know nothing about Box, so perhaps the people working there were paid market rate and worked normal hours. If so, I take back my comment.
- benched 13y ago
  Don't y'all know? If an individual receives a certain payout, we can reason backwards about the amount of risk they must have shouldered based on the amount! (My apologies, nilkn, this isn't aimed at you. I object to the near-religious startup belief that risk = reward. Real life is so much less supervised than that. :) )
probablyfiction 13y ago
Except in very rare cases, you will never become rich by being someone else's employee.
ChuckMcM 13y ago
To add to this, so what if it is "$200K" ? Basically that is enough to completely cover one kids education at a state school, put down 20% on a million dollar house, or seed fund your next "big thing" for easily 6 to 18 months. On top of that you've been working for a salary that probably paid all your existing living expenses so you were not accumulating debt. That is a pretty cool thing. Further, if you continue to work there and it continues to appreciate (as it would if Box proves out their model) then you're looking at $200K * x where 'x' is the appreciation multiplier. Even if your company does a reverse 5:1 split as a friend of mines did just before it IPOs that ISO option is now a 'something' rather than a 'nothing' which was what it was when it was illiquid. Bottom line, its a Good Thing for everyone.
- wwweston 13y ago
  > To add to this, so what if it is "$200K" Depends on if it's $200K while working at market rates, or $200K vested over 5 years while working at 50k under the highest market rate you could have had because, hey, you had equity.
- thaumasiotes 13y ago
  Using an unrepeatable windfall as the down payment on a loan seems wildly inadvisable. The point of the down payment is that you're able make good on the loan.
  - jdavis703 13y ago
    It depends on if you're buying the biggest house you can afford, or are simply trading your rent for a mortgage payment of the same amount.
  - rahimnathwani 13y ago
    No. The point of the down payment is to reduce the loan-to-value ratio which, in turn, reduces the risk taken by the bank (as the property value would have to fall by more than the amount of the down payment before the loan collateral is worth less than the loan). This risk reduction is why the bank will give you a loan at y% rather than 1.5y%. This reduces your monthly payments to an amount you can afford each month from your salary.
crystaln 13y ago
Startups that pay employees well are not scams for employees. Startups that give >0.1% are not scams. Anyone getting 0.0002% expecting to get rich is not being scammed, they are being stupid.
- sjg007 13y ago
  So many startups don't even give out the % your options are..
  - shiftb 13y ago
    You can always ask the number of shares outstanding and calculate it yourself.
    - rahimnathwani 13y ago
      You would also need to know the # of options outstanding. You can't really calculate the value of options without knowing the complete cap table, and details of different share classes (particular liquidation preferences). I don't know whether it's common for small companies to share all of this information outside the senior team or potential hires for that team.
      - sjg007 13y ago
        Yeah, I've gotten absolutely no where when I've asked.
        rahimnathwani 13y ago
        In that situation, I would assume the value to be zero for the purpose of decision-making. @sjg007 email me if you want to discuss in more detail (address in profile).
psychometry 13y ago
I'm curious what kind of warped perspective allows someone to scoff at a $200,000 windfall and where I can acquire such a perspective.
- cperciva 13y ago
  You can arrive at that perspective very easily by buying $400,000 of lottery tickets -- which is essentially what a lot of early startup employees do, by working for lower-than-market rates.
- trustfundbaby 13y ago
  If you took a salary cut for the last couple of years to work there then $200k doesn't seem like a lot. That's probably a top engineers sign on bonus at Google.
- pyrrhotech 13y ago
  are you serious? How much do you make? Remember we are talking $200k pretax. So maybe $120k after taxes. That's less than half a down payment on a shit house in this area. That's maybe one year of market value cash compensation for an engineer with 5 years experience. I'm not saying it's nothing, but remember that we are talking about this being one of the rare startup equity "success stories" that you hear about so often in the media. Of course, I'd take a $200k windfall and be happy for a few days, but it's hardly a life-changing amount of money. I save that much money every 18 months (remember pretax). I wouldn't consider myself wealthy unless I had 50x that amount in the bank
  - FireBeyond 13y ago
    "So maybe $120k after taxes. That's less than half a down payment on a shit house in this area." As of 2013, the average downpayment on a house is 16%, with a benchmark of 20%. So we'll go with the lesser, as "less than". So I can probably presume you're likely living in the Valley or NYC if your viewpoint is that $750K will buy you a "shitty house". Based on assumptions, admittedly, say you own a $1M house (as scoffing at a $750K house as 'shit'...), with a healthy downpayment of $200K (see above) leaves you paying about $5,000/month on an $800K 30 year mortgage. So, we add that to your savings of $6,600 a month, and we look at a calculator of front end ratios and we arrive at you making about $250K+ a year. Of course, most people at that level of income are not living like paupers in their million dollar houses, savagely squirreling money away (as $250K minus $11.6K/month for mortgage and savings only leaves $2,300/month for car(s), bills, entertainment, etc), so it's probably a reasonably safe assumption that it's at least $300K. It's interesting your perspective that you wouldn't consider yourself 'wealthy' unless you had (either) $6M in savings, or a (household?) income of $10M+ / year, when in reality, "You are the 2%".
sirkneeland 13y ago
Don't you really mean "have fun with your 100k!"? How much is that $200k after Federal income (and SS and Medicare/caid and various new obamacare taxes) and state taxes (likely California), and any other local taxes?
driesbuytaert 13y ago
Based on the S-1, Box is growing at 100% YoY and has retention / upsell of 134%. These are world class numbers. If they can keep that momentum, that $200k could grow substantially over the years to come. It could be much better than holding Google stock or getting a Google sign-on bonus. Not sure why everyone is so focused on the IPO value; the IPO is just a fundraising milestone, not an end point to exit.
- pyrrhotech 13y ago
  200k is 200k. It'll be on the public markets. If you think it'll go up a lot, you are welcome to put your own money in it.

klochner 13y ago

The average engineer likely wasn't taking a (cash) pay cut to work there. Working at a company that has raised $400M is closer to a post-IPO experience than a startup.

pyrrhotech 13y ago
I've worked at a couple startups as well as a couple big companies. My salary + bonus has always been much, much higher at large companies than the startups. I also worked much less, so my effective per hour pay was double or more. Perhaps I got the short end of the stick, but I've never seen a dime from my stock options at these companies. One of which was aquired for a decent amount more than the valuation of the company at the time my shares were issued. I suppose the preferrreds took it all. It wouldn't have been that much anyway. Maybe 50 or 100k. In the best realistic case, you are looking at 3-5 years of engineering pay as a one time exit after years of putting in extra hours and probably being underpaid. That's been my experience at least as well as everyone I personally know who has worked in the Bay Area the past decade.
- klochner 13y ago
  Certainly a lot of start-ups take advantage of engineers, I was more making the case that Box isn't really a start-up so I wouldn't expect them to have a big upside on IPO. There are some specific reasons to join a start-up, and hitting the unicorn lottery shouldn't be one of them. Also, you should be taking a market salary and working sane hours, which seems to be more the case in the last 2-3 years, though YMMV.

nilkn 13y ago

I think you're assuming that the employees were making large professional and financial sacrifices to work at Box. Considering the size of the company and the amount of funding, they most likely weren't. A random $200k payoff on top of a market competitive salary and benefits package is nothing to sneeze at. A job is not a scam just because it doesn't make you a multimillionaire over night.

pyrrhotech 13y ago
I know nothing about Box, so perhaps the people working there were paid market rate and worked normal hours. If so, I take back my comment.
benched 13y ago
Don't y'all know? If an individual receives a certain payout, we can reason backwards about the amount of risk they must have shouldered based on the amount! (My apologies, nilkn, this isn't aimed at you. I object to the near-religious startup belief that risk = reward. Real life is so much less supervised than that. :) )

probablyfiction 13y ago

Except in very rare cases, you will never become rich by being someone else's employee.

ChuckMcM 13y ago

To add to this, so what if it is "$200K" ? Basically that is enough to completely cover one kids education at a state school, put down 20% on a million dollar house, or seed fund your next "big thing" for easily 6 to 18 months. On top of that you've been working for a salary that probably paid all your existing living expenses so you were not accumulating debt. That is a pretty cool thing. Further, if you continue to work there and it continues to appreciate (as it would if Box proves out their model) then you're looking at $200K * x where 'x' is the appreciation multiplier. Even if your company does a reverse 5:1 split as a friend of mines did just before it IPOs that ISO option is now a 'something' rather than a 'nothing' which was what it was when it was illiquid. Bottom line, its a Good Thing for everyone.

wwweston 13y ago
> To add to this, so what if it is "$200K" Depends on if it's $200K while working at market rates, or $200K vested over 5 years while working at 50k under the highest market rate you could have had because, hey, you had equity.
thaumasiotes 13y ago
Using an unrepeatable windfall as the down payment on a loan seems wildly inadvisable. The point of the down payment is that you're able make good on the loan.
- jdavis703 13y ago
  It depends on if you're buying the biggest house you can afford, or are simply trading your rent for a mortgage payment of the same amount.
- rahimnathwani 13y ago
  No. The point of the down payment is to reduce the loan-to-value ratio which, in turn, reduces the risk taken by the bank (as the property value would have to fall by more than the amount of the down payment before the loan collateral is worth less than the loan). This risk reduction is why the bank will give you a loan at y% rather than 1.5y%. This reduces your monthly payments to an amount you can afford each month from your salary.

crystaln 13y ago

Startups that pay employees well are not scams for employees. Startups that give >0.1% are not scams. Anyone getting 0.0002% expecting to get rich is not being scammed, they are being stupid.

sjg007 13y ago
So many startups don't even give out the % your options are..
- shiftb 13y ago
  You can always ask the number of shares outstanding and calculate it yourself.
  - rahimnathwani 13y ago
    You would also need to know the # of options outstanding. You can't really calculate the value of options without knowing the complete cap table, and details of different share classes (particular liquidation preferences). I don't know whether it's common for small companies to share all of this information outside the senior team or potential hires for that team.
    - sjg007 13y ago
      Yeah, I've gotten absolutely no where when I've asked.
      - rahimnathwani 13y ago
        In that situation, I would assume the value to be zero for the purpose of decision-making. @sjg007 email me if you want to discuss in more detail (address in profile).

psychometry 13y ago

I'm curious what kind of warped perspective allows someone to scoff at a $200,000 windfall and where I can acquire such a perspective.

cperciva 13y ago
You can arrive at that perspective very easily by buying $400,000 of lottery tickets -- which is essentially what a lot of early startup employees do, by working for lower-than-market rates.
trustfundbaby 13y ago
If you took a salary cut for the last couple of years to work there then $200k doesn't seem like a lot. That's probably a top engineers sign on bonus at Google.
pyrrhotech 13y ago
are you serious? How much do you make? Remember we are talking $200k pretax. So maybe $120k after taxes. That's less than half a down payment on a shit house in this area. That's maybe one year of market value cash compensation for an engineer with 5 years experience. I'm not saying it's nothing, but remember that we are talking about this being one of the rare startup equity "success stories" that you hear about so often in the media. Of course, I'd take a $200k windfall and be happy for a few days, but it's hardly a life-changing amount of money. I save that much money every 18 months (remember pretax). I wouldn't consider myself wealthy unless I had 50x that amount in the bank
- FireBeyond 13y ago
  "So maybe $120k after taxes. That's less than half a down payment on a shit house in this area." As of 2013, the average downpayment on a house is 16%, with a benchmark of 20%. So we'll go with the lesser, as "less than". So I can probably presume you're likely living in the Valley or NYC if your viewpoint is that $750K will buy you a "shitty house". Based on assumptions, admittedly, say you own a $1M house (as scoffing at a $750K house as 'shit'...), with a healthy downpayment of $200K (see above) leaves you paying about $5,000/month on an $800K 30 year mortgage. So, we add that to your savings of $6,600 a month, and we look at a calculator of front end ratios and we arrive at you making about $250K+ a year. Of course, most people at that level of income are not living like paupers in their million dollar houses, savagely squirreling money away (as $250K minus $11.6K/month for mortgage and savings only leaves $2,300/month for car(s), bills, entertainment, etc), so it's probably a reasonably safe assumption that it's at least $300K. It's interesting your perspective that you wouldn't consider yourself 'wealthy' unless you had (either) $6M in savings, or a (household?) income of $10M+ / year, when in reality, "You are the 2%".

sirkneeland 13y ago

Don't you really mean "have fun with your 100k!"? How much is that $200k after Federal income (and SS and Medicare/caid and various new obamacare taxes) and state taxes (likely California), and any other local taxes?

driesbuytaert 13y ago

Based on the S-1, Box is growing at 100% YoY and has retention / upsell of 134%. These are world class numbers. If they can keep that momentum, that $200k could grow substantially over the years to come. It could be much better than holding Google stock or getting a Google sign-on bonus. Not sure why everyone is so focused on the IPO value; the IPO is just a fundraising milestone, not an end point to exit.

pyrrhotech 13y ago
200k is 200k. It'll be on the public markets. If you think it'll go up a lot, you are welcome to put your own money in it.