Ask YC: Should I work for a startup?

14 点作者 bobp大约 17 年前

Here's my dilemma: there's a relatively young startup in the Valley that I think would be a great place to work. I really like the people, the technology, the product and the market. I'm sure I'd have a great time working there and that I would make lasting bonds with my colleagues.Here's the problem: equity. The offer is just too low: a fraction of a percent. For me to make decent money from this startup (by decent I don't even mean enough to retire, certainly not in the Valley, which would require a few millions) it would have to have an exit of hundreds of millions if not over a billion dollars. These days, very few companies achieve this. I doubt this startup will.It seems like although the attitudes towards funding and operating startups have changed significantly since the .com bust, the attitude towards equity distribution to employees is still rooted in the delusional .com days. It's just not worth it for a good hacker to join someone else's startup for such little ownership stake. As much as I would like to join them, it just makes much more sense for me to start my own company so I'll have a better chance at cashing out with a reasonable amount of money.This brings me to the startup risk paradox: working at a startup is riskier for employees than for founders. A founder will do well for himself even if the startup has a modest exit. An employee will only do well at the much less likely event of a fantastic (hunderds of millions) exit. If you're a talented hacker, it's less risky to found a startup than to join one. Sure, you may fail, but if that happens you can always get a job and then try again.Your thoughts are appreciated.

14 条评论

webwright大约 17 年前

"working at a startup is riskier for employees than for founders."That (honestly) is ridiculous. If the founder is taking the standard path, they are going months or years without salaries, oftentimes accumulating debt to do so. When they get a little slice of angel funding, they usually pay themselves pennies so their early hires can get non-insulting salaries.You seem to assume that a "cash-out" is a foregone conclusion. 99% of startups go belly up. No payout for the founders, "modest" or otherwise.A fraction of a percent for an engineer is not uncommon. I'd need to know the company size, how far along they are, what sort of salary they are offering, and how senior YOU are to know if it's unreasonable. But for a funded startup offering a non-insulting salary to a relatively junior person, it's common. And (honestly) plenty fair.What, exactly, are YOU risking as an employee? The 10 minutes it'll take you to go find a new job if the startup flops? Do you know what the founders have on the table? If not, you could probably ask them.If you want more equity, offer to work for free or ridiculously cheap. Many smart founders will happily trade a little more equity to avoid a monster salary.

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bprater大约 17 年前

If you are hunting the big exit, go forth and co-found a company. (And enjoy the pork-and-beans while the engineers are getting cut nice fat checks.)Equity is rarely going to pay off for you unless you are fortunate enough to hit the Microsoft or Google jackpot. You might be able to buy a nice car, but don't expect a place in the Bahamas.Work there if you really love the people or the idea. Enjoy your monthly paycheck. But if you are in the game for the big payoff, you'll have to strike out on your own.

secorp大约 17 年前

Startup pros:* great people, unique culture* influence a wide range of issues from tech to office location* great experience for founding a company laterNote that I didn't include "huge potential financial gain" in that list. A non-founder at a startup really has to value the experience because most likely there won't be a huge financial win. That doesn't mean that you shouldn't try to negotiate a fair compensation package, but really you are using the opportunity to gain skills and experience to use when founding your own company where you will have more ownership and potential financial gain. If you don't believe that the founders take more risk than the employees now, you will once you found your own company :)If financial gain is your main goal, you may want to take a serious look at getting into the financing side. This will take a different approach, but good analytical skills plus good networking skills are in high demand. Alternatively, you could go down a more corporate path and aim for senior management at a good firm. I'm not necessarily recommending these paths, but it's worth exploring the alternatives so that you can really appreciate the (in my opinion) extraordinary benefits and privileges of working at a startup.

cperciva大约 17 年前

I think there are two points you haven't considered.First, for startups which take VC, a "modest exit" can mean that the founders get nothing. The range of outcomes where founders become fabulously wealthy but early employees do not is fairly narrow.Second, most founders start off by not taking a salary. Deciding to be an employee instead of founding your own startup means implicitly deciding to take more salary up-front and less of a chance of holding valuable stock at the end -- put another way, reducing your risk.That all said, whether "a fraction of a percent" equity is reasonable is an open question -- it depends on how large the company already is, how large your salary is, et cetera. You can always negotiate.

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Spyckie大约 17 年前

For your situation - you are, ultimately, selling yourself not just as an employee but as a package of value contributed to the company. Now, if you are valuable - that means, if you can provide experience, work or code to the company that will drive it forward that not many other people can provide, then yes, you should consider asking for more equity.Really, its all about selling. You have some goods or services. They want/need it. Is the current deal fair in both parties' eyes? Founders will say all sorts of things like "I bear all the risk", "I've been here since the beginning", and "I've contributed the most work", and many of these things will be true. However, you have cards to play like, "employees need compensation for their efforts", "good hackers are rare" and "I can add value to your company" (we assume you can). There's an argument to be had here about how much employee should get, but really, its all about how you negotiate. You have to show them why you think the deal is unfair to you, and offer up one that you think is more fair to both parties. If you like the deal, just take it. If you don't like the deal enough to take it, offer up your own, and if they reject it, you weren't going to take the original deal anyways.But I will admit that like everyone else here has said, the negotiation here is skewed heavily towards the founders favor - still try to get what you can.

dkokelley大约 17 年前

We need to know the answers to a few questions:Do you know how the equity is currently divided? Is it 40-40 for the two founders (assuming only 2) and 20% left over? Have they taken any equity funding yet? Is it just starting out, or would you be employee number 13?Knowing what they have available to offer, where they are along the start-exit line, and their current equity position will give you a good idea of how to negotiate.Another angle, will you be taking a salary? If you're making a modest salary then it is perfectly acceptable to be offered only a small fraction of equity. You may very well be making more than the founders are.If you want more equity in the company, offer to forgo a salary or take only what the founders are taking.working at a startup is riskier for employees than for founders.I disagree. The founders take the most risk, and get the most reward because of this. Founders typically make millions or $0. Employees don't typically make millions, but it's against the law for them to make 0. They earn a regular salary, which is less than the millions the founders might make, but they earn it consistently. There's a trade off.

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geebee大约 17 年前

This depends on the situation.There are times when an "employee" is really a founder, but the founders don't want to admit this. Even if there is a salary, the financial situation may be very unstable (ie., making payroll may be an issue). This is often the case for very early employees, and seems to happen most when non-technical founders are hiring their first progammer. In this case, I think the founders should really be either bringing on a technical person as a founder or paying a contractor. It's a sign of a pretty clueless bunch of managers, either way.The other situation (which I am in right now) is when you have a fully functioning "startup". The business may not be cash flow positive, but it's been around for a while, has a stable funding base, a product, and probably some customers. In this case, a very small bit of equity is reasonable, because the employee is really working for a salary, plus a chance at a nice payout (maybe up to a mil, but no more than that).My advice is that you evaluate the company - they need to be in category 2 for this offer to make sense.By the way, I agree with you that the risk can be "greater" in some situations for the employee than for the founders. The founders have more control over the exit than the employees do, and they'll see trouble coming from much further out.

comatose_kid大约 17 年前

Working at a startup is not more risky for employees than for founders.Consider that the startup you are applying to already has funding (I'm assuming it does, since it sounds like there is already a team). The founders started with nothing but an idea, probably invested their free time to implement v0 and then sold it well enough to attract funding. They could have failed at any time, and would have had nothing except experience and pissed off investors to show for it, not to mention the loss of any personal investment in the firm.You on the other hand will draw a salary from day 1, and you already have a better idea of the company's trajectory than the founders did when they conceived of the idea. Even if the company goes under, you will have earned $X in addition to the experience gained.And you have the luxury of not having to worry about how to get funding, sign deals, etc.If you don't like the risk/reward, the best way to change the equation is to become a founder, or build/lead something so amazing that your rep alone compels startups to offer you a significant percentage.

jojoleflaire大约 17 年前

What percentage does it take to get 2x your base salary in 4 years max (accounting for multiple rounds and the subsequent dilution)? Adjust base salary until it fits your goals.Remember: early employees never get rich, except for the really exceptional cases in which even the dock workers get a huge windfall.

marketer大约 17 年前

If you're not a co-founder, it's difficult to rich off of stock options in. It happens once in a while (ebay, paypal, etc.), but not very often.How many employees does it have, and what's a recent valuation? If it has something like more than 10 employees, a valuation in the 10+ millions, and it's in a great market, it could be reasonable.Another thing to consider is the overall experience. Would you be learning technologies that are unique, and valuable in the future? Who is involved in this startup, and how valuable are the connections you could make? For instance, if the startup makes ROR apps, you could probably spend your time moonlighting and become competent in the technology yourself.

csmajorfive大约 17 年前

Well if you're getting paid a salary, it's not the case that it's riskier for you. You get to enjoy some of the benefits of a startup (culture, equity, etc) without having to go through the period where you're living on credit card debt and ramen.

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staunch大约 17 年前

I'd say you're just too late to that particular party. Go start your own or find one that's really early (so you can be a 2nd tier founder). Those are the only two options I consider personally.

alaskamiller大约 17 年前

I'm not sure why you think working at one startup is going to be the ultimate path to salvation. Some people jump in and out of multiple startups.

brentg大约 17 年前

Bob,I understand your conundrum. I was in the very same position. I would suggest doing your own startup. Also, on the same topic, I would like to discuss with you the potential for a possible partnership between you and I on a venture. brent.griffith AT gmail [.] com if you're interested. Let's see if our skills are complementary.