Ask HN: How much did you earn as an employee from an exit?

I joined as their 3rd employee - as a junior developer to assist the current senior. When they saw how good I was, they sacked the senior. I was given a pay <i>cut</i>, ostensibly to keep the lights on, prettied-up with a new contact saying if after a year they were still in business I'd get my salary restored, but a major bonus if they reach profitability or were bought out within a year. Cue 12 months of being an idiot, regularly working weekends and all-nighters to add major features on little notice for meetings with potential customers and developers. New projects were piled on with no regard for workload or realistic deadlines. They needed a new DC, but rather than hire a sysadmin they passed it to me because I'd had experience on my CV.<p>By this point I'd lost sight of salary and bonus - I was working to try to avoid letting the team down by missing deadlines. As absurd as it sounds now, the atmosphere in the office made me feel I was part of something special, I was doing my part, and I was going to anything I could to keep up my part. I'd been hired part-time, but I worked full time, and then some, spurred on by my mis-placed sense of loyalty and necessity to cope with my workload. Then at the end of the year they said they couldn't afford to give me back the pay cut, and a couple of months later they announced they were going to be acquired - conveniently close to the year end to be a coincidence. I realised that I wasn't part of the team, I was just employee 3. I'd already started to suffer major burn-out / a bit of a breakdown, so I quit. That was years ago and I'm only just starting to get myself back together.<p>I blame myself entirely - I was naive and let myself be manipulated and used. By that point I was so deep into the "we're all in this together" that I couldn't see what was happening. But you're not in it together - there may be more honorable founders out there, but at the end of the day, you're working to line their pockets, and just because you've got a bit of paper saying they'll be nice doesn't mean they will. Trust no-one, get everything you're owed up front, and remember at all times that for you it's just a job.<p>Work to live, don't live to work.<p>(From a throwaway account for obvious reasons. Ahh, that's better ;) )

1st time I was naive didn't get all the details and ended up getting screwed, was also a really good exit. was hired as first engineer.<p>2nd time was a little more than a quarterly bonus at last corporate job, so yeah wasn't much. was 2nd engineer hired.<p>I know its anti karma saying this but working at startups suck.<p>edit- I see people putting 18 / 20k and is probably good depending on what area you live in but for perspective my last quarter bonus was 10k.

Just like YC is equalizing informational asymmetry between twenty-something founders and people with signatory authority on hundreds of millions, I'm really glad that HN contributes to education of prospective employees like this.<p>I like to think I'm smart. Two years ago, prior to HNducation, many common-as-dirt features of cap tables like e.g. liquidation preferences would have been a totally successful ambush on me. (If you can't explain three ways why 2% of $40 million is zero, consider carefully whether your best interests are being represented in a negotiation with someone who can.)

So is no one naming names of the companies they worked for? Most of this stuff doesn't seem to violate any NDAs and we're all past the quiet period...<p>Anyway, I was an early rank and file employee at a startup that was acquired by WebMD. When WebMD merged with Healtheon in '99 - which I'm counting as an exit, since our office was shut down shortly thereafter - we were able to exercise our options. I cashed out a third of my vested ISOs to the tune of about $50K. Not FU money, but a nice boost to a 25 year old, and enough to put a substantial down payment on a house.<p>What I learned:<p>• Some of my coworkers thought I was loony for cashing out when I did - they thought the stock price would keep going up. And it did - for a while. Remember, this was 2000. We were all out of a job in six months. A bird in the hand, etc.<p>• Some people cashed out 100%, seeing dollar signs, and didn't get counseled on the tax ramifications. That ended poorly. These were young engineering types who chose not to listen to our awesome CFO/office manager/HR person back when we were a tiny startup. It's amazing how someone can grok Python, and not compound interest.<p>• The house I put 25% down on in 2000 sold in 2006 for more than twice what I paid for it, while the "nostalgia shares" I kept from WebMD aren't worth one-tenth of what they were in 2000. This was a valuable lesson in the benefits of diversification.<p>Finally, what I learned was that the only difference between gambling in Vegas and gambling with tech startup stock options is that in Vegas, you get free drinks.

2nd developer, $1.4M in an IPO after 8 years. Took what I considered to be a reduced (around 75%) salary for the first 3 years. The first 5 or so developers probably all got something in the same range or more. The company is not particularly famous; most on HN will not have heard of it.<p>I understand that the good outcome was partly due to years of draining work and even more so due to very good luck.<p>Many developers are undervalued by employers, but shares can work out. It's worth taking the time to learn what percentage stake you're getting (if you ask and the employer doesn't tell you, walk away) and doing your own assessment of the possibilities and risks for the company.

I'm not sure if you would consider these "startups" per se, but I've been at two private companies that had an acquisition or equivalent.<p>Large comparison shopping site, I joined about 9 months before a majority stake was sold to a private equity group. They took a while to grant my options and by that time they were in talks about the acquisition, so the options were priced at the acquisition price (since once they'd seen an offer, they couldn't price "fair market value" below that). I didn't exercise, since at that price it wasn't going to perform better than any other stock and wasn't liquid.<p>Next time around, I got eleventy billion options in a "startup" around series G or H funding. They got acquired but did not cover the liquidation preferences for investors, so no employees saw a dime. They did hand out some pretty significant bonuses.

Once: nothing. (Except a mac mini which the founder was nice enough to buy me as a kind of `exit bonus' :)<p>Despite my options having vested, investors held preferred stock which (since the exit was small-ish) left no liquidity on the table for the employee option-holders.<p>Then, because I was no longer working there at the time of the exit, nothing was negotiated for me as part of the sale. (Those employees who did stay on got something I think, not tonnes though AFAIK and they came with `golden handcuffs').<p>I had worked hard for them at well below market on the basis the options would make up for my opportunity cost. They didn't, despite the company getting an exit.<p>My advice would be always treat options as a `nice to have' not a replacement for salary, they're so hard to value effectively, and even in the event of an exit their value can still depend to a great extent on the goodwill of founders and investors at the time, on whether you're still working there and whether you want to work for the acquirer, and in general on so many factors outside your control.

1st time, I was the first employee of a company that grew to over 150 people. It went bust in the first dot-com bubble bursting and I got nothing for my sizable number of options, except for a lesson in how easily CEOs can break promises regarding money held in escrow.<p>2nd time, I was the first employee of a company that never got bigger than 15 people. I had 2%, with a quarter of that vested (0.5%) The company was acquired and I got nothing except one week's notice that I might need a new job and a lesson in liquidation preferences.<p>This time around I'm getting 25 basis points, and I'm employee number 50 or so. We'll see if the third time is the charm, but to be honest, I truly don't care. Equity is nice to have but it's worthless until it's not.

So employees complain about options being worth squat.<p>And founders/managers complain about not being able to hire talent.<p>I believe that's referred to as a "market disconnect."

1st, after a couple years work, non-founder, was mid-tens.<p>2nd, after a year and a half, non-founder, was "could have bought a house and put kids through college if I wasn't young and stupid"-money.<p>3rd, founder, zero. Sucked up the money from 2nd, in fact; it was negative.<p>4th, employee, four years; would have been six figures had I bought my options when I quit (but even after that, I'd still recommend being wary of buying your options when you leave). But: you gotta put the four years you worked there in the divisor, too.<p>5th is current company, and I'm a founder.

Wow from the sound of it all, sounds like staying at a wall st job with a decent pay/bonus is better than joining a startup, except for the possibility of working on something kick-ass.

Most employees at a startup often get screwed. I recently joined a startup and I'm considering the value of my options to be zero. If they do pay off, it'll be a bonus for me. Go for either the learning experience, or if you really love working there. Chances are, if you aren't among the founders, you won't see much even on a successful exit.<p>Tip: Do an early exercise (83b election) and convert your options into RSUs to avoid higher taxation.<p><a href="http://www.startupcompanylawyer.com/2008/02/15/what-is-an-83b-election/" rel="nofollow">http://www.startupcompanylawyer.com/2008/02/15/what-is-an-83...</a>

I worked at a semiconductor startup that was acquired in the recession of 08. Got 2 years of a 12.5k annual retention bonus, and well, my job (engineers stayed on, sales/upper management were out)<p>Was it worth staying there for 2 more years? Dear god No. My opinion these days is that "most post-m&#38;a situations suck", especially those where you're not immediately integrated into the acquiring's company culture, or promoted to lead them to better things. The problem is that it's deceiving at first. When you get acquired, you're like, "hey, my fellow engineering team stays the same, and all the crappy management from startup is out!". They built a new satellite office for us to move into with their other recent acquisitions. While it sounds nice, it's miserable if you don't see a growth path for yourself, and don't understand how the rest of the acquiring company functions. Why should I work for some options of a company I don't understand?<p>In the 2+ years, I've dealt with lack of funding for projects I want to do (project customers want and competitors already have), watched several very smart engineers (the ones you look up to) leave the company, as well as my own manager recently leave. Simultaneously, I feel like my work-life is more stressful as I have to work with "company-wide" field engineers that don't necessarily care about our product line, we've been losing customers since they notice us not shipping new parts and integrating our support across the company.<p>To help clarify, I'm an apps engineer - i.e. a mix of trying to do software development, customer support, working/managing a contractor, setting up our issue tracker, and dropping everything to hack something up for a tier-1 customer.<p>My advice to other non-founders getting acquired: If you're not in debt, don't worry about the money from your acquisition. Worry about whether you'll be gaining any new experiences post-acquisition. If the acquiring company is just dangling you along, leave. Be very weary of "retention bonuses" - they can alter the way you perceive your work for the worse.<p>Disclaimer: I need to start following the above advice.

Hey quit ruining the Ponzi scheme for all us startup founders and investors! If word gets out that the vast majority of tech startups go nowhere and even in an acquisition the chumps...I mean employees... make shit, the game is up!<p>Then I won't be able to attract any underpaid, overworked slaves for my crappy company!<p>I tell them that they'll learn about startups by sitting in their corner writing code while I hang out with the investors. I tell them any old bullshit about bonuses and vacations and the fools never ask for it in writing. Morons!<p>Haha, not to worry. Starry-eyed, "passionate" idiot nerds are born every minute. HN is the best place to find them.<p>Carry on, gents! I'm laughing all the way to the bank.

Like many others here, the couple times I've been along from start to exit, despite all the contracts and promises and hard work at low pay with no overtime, key contributions, etc, so far, never a dollar, and in one case, a protracted legal battle as they tried to steal my preexisting IP which I had a signed agreement from them acknowledging belonging to me, signed before I started work.

When my current company (~200 employee startup) got acquired about 5 years ago my internal stock was translated into about 20k.<p>We then had a 10k payout for staying an additional year.<p>Considering everyone assumed that our internal stock would never be worth anything, I was fairly pleased overall.

I'm surprised by how uniformly negative most people's experiences are. The positive stories seem to be the exceptions.

1) 5%, and they kept their word. Unfortunately it turned out to be only around $5k -- small ISP sold when the market was transitioning away from dial-up. But I was young, and this was good money for me at the time.<p>2) 0% - the company performed poorly, and I needed cash, so when salaries were cut, then cut again, then again, I bailed for the security of a bigCo. Apparently its now a pretty successful division of a bigCo.<p>3) Currently awaiting an exit, at the prices we're currently talking about I should see mid-six figures.<p>4) Still building (I'm at 3 &#38; 4 simultaneously), co-founder of a bootstrap.<p>I've also worked at a couple bigCos in the meanwhile, but outside of some profit sharing that goes into a retirement fund...it's just salary and bonuses.

One place to get this information is in SEC filings. Look, for example, at Google's filing for the YouTube acquisition:<p><a href="http://www.secinfo.com/d14D5a.uM1t.htm#_rom20596_5" rel="nofollow">http://www.secinfo.com/d14D5a.uM1t.htm#_rom20596_5</a><p>With a little rummaging in LinkedIn you can figure out who started when. Multiply the number of shares times $500 or so and you'll know what they ended up with.

A little late, but I'm adding this since there's not a ton of comments on here on relatively-late employees.<p>The first time as an employee, I would've received mid-five-figures, if only I'd been able to afford the $10K to exercise my options when I left. (Whoops.) I was employee #150 or so.<p>The second time as an employee, low-five-figures from the options, and close to $100K from a year's worth of retention bonus. Would've been more if I'd stayed for three years instead of one. Here I was around employee #100.<p>In both cases the startups were already mature when I arrived - not guaranteed to exit, but a stone rolling downhill. Whatever I made was gravy; I was paid at or close to market rate at both places.<p>In my opinion, employees do best at startups that've already had some success. Being the first employee is too close in risk to being a founder, but with just a fraction of the rewards.

Here's an academic article on the pay for entrepreneurs backed by VCs:<p><a href="http://www.stanford.edu/~rehall/HallWoodward6.pdf" rel="nofollow">http://www.stanford.edu/~rehall/HallWoodward6.pdf</a><p>High average returns driven by huge exits and most entrepreneurs earn 0.

I made something like US$18k (pretax). Was the downpayment on my house. Not as much as I wished, but beats the hell out of flaming out.<p>ETA: Company sold out about 2 years after I started. I didn't make nearly as much as if I had continued being a contractor with a BigDumbCo. But I had a _LOT_ more fun.

20k on a 30M purchase by a large company wanting to enter our space. I didn't know shit about options. Pretty good for 9 months, nearly even with the salary I should have had in a non-startup job. So in the end, deferred savings plan.

Beware of taxes! If you exercise at least 1 full year (366 days) before the company sells you pay capital gains tax (currently 15%) instead of full income tax (could be ~35%). I did not exercise my options early. Consequently, I coughed up over one-third of my cash to Uncle Sam in the form of taxes &#38; withholding.

I know of several MIT people who've been early employees at startups in their 20s / early 30s and made few hundred K upon exit.<p>Does that happen often? No.<p>Will it happen for early Dropbox and Airbnb employees? Yes.<p>Can you get the same options if you joined Dropbox today? No.

I think you're asking how much was earned on the day the deal closed - which is a fine way to measure.<p>But it's worth keeping in mind that it's very common for employees, particularly early/key employees, to have significant additional upside after the deal closes: unvested shares, retention bonuses, etc.

I wouldn't work for a startup, unless the pay was higher than than market (since there is more risk involved). I would also treat it as a job (IE: no insane hours).<p>All too often, people toil away their life for someone else's idea and then get kicked to the curb (it's happened to me a couple times too). If I'm going to be wasting my free time working, it's going to be for the possibility of a big payout..which will only happen if I own the company.

0. 1st employee. 1.6%. Not much left of the company. Was also taking cut in salary.

#1 Startup:<p>Left before the first year. Company was acquired later. The payout is engineers got to keep their job.<p>#2 Multinational:<p>The stock option I was granted once valued 500k at the peak of dotcom bloom. In the short window before the crash I've cashed out about 40k. It goes toward the down payment of the house. This might turn out to be the best financial gain thus far.<p>#3 startup:<p>The firm has over 100M VC funding and 300 employee when I join. My stock valued above 100k at acquisition. It has shrink about 25% when they are fully vested.<p>#4 startup (current):<p>I took about 25% pay cut to join this startup. If the stock makes the same money as startup #3 I will about break even. Financial aside I'm quite happy working here.

Fun and sensitive question! Taxes certainly bite big time, especially on on an acquisition where its paid out as a bonus.<p>Longest engineer at the company when the acquisition happened, exit was around ~200k, pre-tax.

Is flaming out considered an exit?

I haven't exited yet; I'm instead a co-founder raising money.<p>This has been a good thread to read about how I should protect my employees. I firmly believe in this rule: give a good deal to your VC's, co-founders and employees as it will make it even easier for your next startup to succeed.<p>We've got a nice big options block for our employees and I want to be able to say to every person in the company that has options that they'll get a cash-out.

software engs in the startup I joined made anywhere from tens of thousands up to more than half a million (depending on how early they joined, when they sold their options, etc).

Should be a poll

2nd engineer, started right out of college. Was always being paid what I felt to be market value. Had ~2% in stock after a re-incentivizing due to a near bankruptcy after failing to close a Series B. Turned into 180K after 5 years at the company. This company had good founders, so perhaps that's why this seems to be the exception; former CTO/CEO of a large company that was acquired.

This about sums up HN these days -- not a single answer in these 166 responses! Just a bunch of unrelated (and for the most part), uneducated opinions!

dunno, never calculated total amount. maybe few years' salary worth at most, spread over a few years. nothing to write home about, yet :)

s/when/if