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What % of the company do you think the 24th employee should get? Obviously it's highly variable depending on the role. #24 could be a COO or could be a recepti
by harryh 11y ago
What % of the company do you think the 24th employee should get?
Obviously it's highly variable depending on the role. #24 could be a COO or could be a receptionist. But for the sake of argument let's assume they're a mid level engineer (taking a stab at what MCRed might have been at the gig in question).
- branchless 11y agoIt's true we don't have enough info. I'm assuming he's a dev but I don't know.
- harryh 11y agoI don't think that 0.3% is radially out of line. It sounds completely in the ballpark of reasonable to me.
- serge2k 11y agoI think it depends on the risk. Getting hired at #24 might be a much less risky proposition than number 10 or 15.
- tptacek 11y agoAssume we're talking about a senior developer and come up with math that reasonably gets #24 above 100 basis points. It's not impossible, but it's pretty tricky. Remember, in a lot of companies, the founders are diluted way back below 10%.
- pzb 11y agoThe percentage really doesn't matter. Assume that you could get a $150K cash/stock at a public company (meaning concrete valuation). A startup offers you $80K and says "here is equity to make up the difference". If you assume three years and a 10% chance of them being worth something that means you need RSUs worth at least $2.1M to meet expected loss of salary. I highly doubt you are getting that.
- harryh 11y agoStartups aren't a roll of the dice where they are all the same with equal probabilities of success. Make good decisions. Join the right team.
- dman 11y agoIf youre great at identifying the right team, why not work as a VC rather than working as an employee :) .
- harryh 11y agoBecause I like making things and working with other people and don't really like meetings or traveling.
- dman 11y agoThe biggest downward ticks to my personal net worth have been due to me relying on skills that I dont exercise often. Over time I have calibrated my judgement to mark the value of infrequently exercised skills to zero even though I might think I am a natural at them.
- MCRed 11y agoVCs are terrible at this. I can't tell you how many times in the past 20 years I've heard VCs say things like "you should move into [tangentially related area that we can't add value to that just had a big exit]" For instance, when youtube got bought, VCs were all interested in investing in online video companies. At that point, though, Youtube had already been bought! They were like 5 years too late.
- dman 11y agoThat might well be true, the point I was trying to make was that as an employee its dangerous to make decisions based on the belief that you are great at picking winning teams / companies. Sure VC's are bad it too, but theyre sensible enough to do it with other peoples money.
- MCRed 11y agoIt's not a simply "$100k/$30M = Equity" situation, and I wasn't expecting people to go into this much detail. My equity at hiring time was probably %1.5, I think. But there was vesting, of course, and also a whole lot of unsavory business, mostly perpetrated by the VCs. Trying to go into the detail and tangle out exactly why I got what I got would be just airing a lot of drama from the past and not really applicable to others. I only presented those numbers because they're two objective facts from the best payout I got working for a startup.