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To my understanding, being an early employee is the best deal because they still get substantial equity, but don't face nearly the same level of risk as the fou
by thirsteh 12y ago
To my understanding, being an early employee is the best deal because they still get substantial equity, but don't face nearly the same level of risk as the founders.
Somebody did the numbers on HN a while back and showed that you have a higher probability of making it rich by being an early employee than by founding your own startup. I'm afraid I have no idea how to find that thread, though.
- byoung2 12y agoa higher probability of making it rich by being an early employee than by founding your own startup There are an order of magnitude more early employees than there are founders, so it makes sense...for every founder made rich, there are 10x as many early employees made rich.
- WalterSear 12y agoFWIW, the salary charts on angel list show the average startup equity offers there going for a bit more than a point. If your hypothetical startup sold for $100 million dollars, after dilution and taxes, you could expect maybe $500k. In other words, ~$125k extra for each year of a 4 year vesting period. That's nice, but it's certainly not substantial - it's about equal to the salary you'ld expect at the same jobs. And, we are talking about a hundred million dollar, moonshot exit - in other words, vastly, vastly more than most startups can expect to make. Most early employees make a modest, very decent, pittance.
- gaius 12y agoSubstantial, not really. After a year or two, the salary you give up in return for equity will probably be more than the founder's initial stake, yet you will get 1% of 1% of any upside.