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Yikes this hits close to home for me. I am employee #1 for a rapidly growing startup, been here nearly two years. It's my first developer position, I'm defini

Yikes this hits close to home for me. I am employee #1 for a rapidly growing startup, been here nearly two years. It's my first developer position, I'm definitely underpaid (until our A-round apparently), but I have .5%. I feel like pretty soon it'll be apparent whether this is going to ~really~ take off (I honestly feel it will). Any advice on what steps I should take to prevent getting shafted?

calcsam 12y ago
Post your resume on Dice // reach out to recruiters. Get another offer. Wave in front of them as a bargaining tactic. I'd happily bet you $50 that your next offer will be 25% over your current one. my username at gmail if you'd like to take me up on it.
jacalata 12y ago
You say you think it will "really take off" - what's that mean, it's going to be a billion dollar company? Ok then, your 0.5% is going to make you 5 million dollars. That's a net win. But maybe you mean it's a 50 million dollar company - then, best case (no dilution, you stick it out until they IPO, let's say 5 years working there total) you could walk away with $250,000, or the equivalent of having been paid an extra $40k-$50k per year each year you worked there. That sounds like about break-even financially, with some great experience but shitty lifestyle for several years. Up to you if that was a good deal. Or maybe you mean it's a 10 million dollar company. Would you be at this job if you had no equity and an extra $10k or would you feel screwed?
- tanzania 12y ago
  Thanks for the perspective - this has been really helpful. I think no matter what happens it will have been an amazing experience that I lucked in to.
  - debacle 12y ago
    > it will have been an amazing experience that I lucked in to. I'm not really sure why you feel that way. Are you underskilled? You make it sound as though you're underpaid but then call it an amazing experience.
    - tanzania 12y ago
      I'm definitely underpaid at the moment but that's the nature of a bootstrapped startup isn't it. They took a chance on me with no degree or job exp. Also money doesn't equal a better experience. I get to work on something really fucking cool and I love the people I work with. I'd probably kill myself at consultancy. So regardless of whether or not make tons of money on this startup, I'll have 2+ years of job experience for the next job that I didn't have before.
      - kjksf 12y ago
        You're rationalizing your state of being underpaid, which is understandable (you want to feel like you're making good choices in your life) but not very rational. The tell-tale sign is that you compare your current position with a bad job (consultancy). The thing is: there are plenty of startups that make cool things and have nice people AND pay well AND offer good equity AND have potential to take off in the future. So if you really think you're underpaid for your skills (as in: you could find another job that is as good as this one and pays better), you should ask for a raise that would match a market rate for your current skills. If a raise is not possible, you should start looking for a new job (and if you're in SF/Bay Area, there have never been a better time to do that).
        BatFastard 12y ago
        Better to love what you do then make more money. Money != Happiness If this guy loves his job and company, and has earned valuable experience, then he is a lucky man! If he happens to make an extra buck or two, so much the better.
        joslin01 12y ago
        Eek.. doesn't > They took a chance on me with no degree or job exp. Stand out to you? S/he sounds like a beginner..
ugh123 12y ago
If this is your first dev position then you're probably replaceable and won't have much negotiating power in the end.
SeoxyS 12y ago
I've been in this position. .5% of a rocketship is still pretty great. You'll end up with 1.25MM cash if the company exits at a billion (after 2x dilution and 50% taxes if you're in California). Yeah, it sucks to think about how much richer the founders got, whilst you worked just as hard… but it's still important to remember that you were very lucky to be in the right place at the right time, and be along for the ride. Also, I bet you learnt a fuckton in this position which'll make it easy for you to accelerate your career. For me, seeing the hyper-growth from inside, taking on responsibility as the company grew, handling the shit as it hit the fan… that's priceless experience. Combine that + the 5MM I'll probably make out of it, and it doesn't matter how much better off the founders are, I still got a great outcome.
- 23david 12y ago
  Sounds like you'll make out ok, but feel it could've worked out better... After proving your value as an early engineering hire, what about approaching the Founders to re-up the equity on a regular basis? Awesome first quarter 2012? Company revenue up 100x? Profit through the roof? Ok... how about that equity re-up? :-) Nothing should restrict irreplaceable engineers or engineers who just create tons of $$$ value from getting increased equity post-hire. I'm sure there are some great techniques for this, and this can definitely become a norm in our industry. (My friends on Wall Street have this down to an art form...) As companies grow out, individual engineer performance is usually under-appreciated so there is less leverage. I'm surprised you didn't walk away with co-founder (10%+) level equity. You built nearly everything... all the hard/nasty bits like supporting multiple api versions across diff platforms and also building/maintaining new features that drove new customer adoption. From an engineering perspective it was pretty awesome to see the value creation, so it's a bummer to hear that after sticking it out you won't get rewarded for that early value creation. Definitely think it'd be appropriate to show up one day after acquisition and ask for a rather large boat. Or 2. :-)

calcsam 12y ago

Post your resume on Dice // reach out to recruiters. Get another offer. Wave in front of them as a bargaining tactic. I'd happily bet you $50 that your next offer will be 25% over your current one. my username at gmail if you'd like to take me up on it.

jacalata 12y ago

You say you think it will "really take off" - what's that mean, it's going to be a billion dollar company? Ok then, your 0.5% is going to make you 5 million dollars. That's a net win. But maybe you mean it's a 50 million dollar company - then, best case (no dilution, you stick it out until they IPO, let's say 5 years working there total) you could walk away with $250,000, or the equivalent of having been paid an extra $40k-$50k per year each year you worked there. That sounds like about break-even financially, with some great experience but shitty lifestyle for several years. Up to you if that was a good deal. Or maybe you mean it's a 10 million dollar company. Would you be at this job if you had no equity and an extra $10k or would you feel screwed?

tanzania 12y ago
Thanks for the perspective - this has been really helpful. I think no matter what happens it will have been an amazing experience that I lucked in to.
- debacle 12y ago
  > it will have been an amazing experience that I lucked in to. I'm not really sure why you feel that way. Are you underskilled? You make it sound as though you're underpaid but then call it an amazing experience.
  - tanzania 12y ago
    I'm definitely underpaid at the moment but that's the nature of a bootstrapped startup isn't it. They took a chance on me with no degree or job exp. Also money doesn't equal a better experience. I get to work on something really fucking cool and I love the people I work with. I'd probably kill myself at consultancy. So regardless of whether or not make tons of money on this startup, I'll have 2+ years of job experience for the next job that I didn't have before.
    - kjksf 12y ago
      You're rationalizing your state of being underpaid, which is understandable (you want to feel like you're making good choices in your life) but not very rational. The tell-tale sign is that you compare your current position with a bad job (consultancy). The thing is: there are plenty of startups that make cool things and have nice people AND pay well AND offer good equity AND have potential to take off in the future. So if you really think you're underpaid for your skills (as in: you could find another job that is as good as this one and pays better), you should ask for a raise that would match a market rate for your current skills. If a raise is not possible, you should start looking for a new job (and if you're in SF/Bay Area, there have never been a better time to do that).
      - BatFastard 12y ago
        Better to love what you do then make more money. Money != Happiness If this guy loves his job and company, and has earned valuable experience, then he is a lucky man! If he happens to make an extra buck or two, so much the better.
      - joslin01 12y ago
        Eek.. doesn't > They took a chance on me with no degree or job exp. Stand out to you? S/he sounds like a beginner..

ugh123 12y ago

If this is your first dev position then you're probably replaceable and won't have much negotiating power in the end.

SeoxyS 12y ago

I've been in this position. .5% of a rocketship is still pretty great. You'll end up with 1.25MM cash if the company exits at a billion (after 2x dilution and 50% taxes if you're in California). Yeah, it sucks to think about how much richer the founders got, whilst you worked just as hard… but it's still important to remember that you were very lucky to be in the right place at the right time, and be along for the ride. Also, I bet you learnt a fuckton in this position which'll make it easy for you to accelerate your career. For me, seeing the hyper-growth from inside, taking on responsibility as the company grew, handling the shit as it hit the fan… that's priceless experience. Combine that + the 5MM I'll probably make out of it, and it doesn't matter how much better off the founders are, I still got a great outcome.

23david 12y ago
Sounds like you'll make out ok, but feel it could've worked out better... After proving your value as an early engineering hire, what about approaching the Founders to re-up the equity on a regular basis? Awesome first quarter 2012? Company revenue up 100x? Profit through the roof? Ok... how about that equity re-up? :-) Nothing should restrict irreplaceable engineers or engineers who just create tons of $$$ value from getting increased equity post-hire. I'm sure there are some great techniques for this, and this can definitely become a norm in our industry. (My friends on Wall Street have this down to an art form...) As companies grow out, individual engineer performance is usually under-appreciated so there is less leverage. I'm surprised you didn't walk away with co-founder (10%+) level equity. You built nearly everything... all the hard/nasty bits like supporting multiple api versions across diff platforms and also building/maintaining new features that drove new customer adoption. From an engineering perspective it was pretty awesome to see the value creation, so it's a bummer to hear that after sticking it out you won't get rewarded for that early value creation. Definitely think it'd be appropriate to show up one day after acquisition and ask for a rather large boat. Or 2. :-)