What you need to know before you join a startup

&gt; Most importantly, you will learn significantly faster than if you worked at a large company.<p>Having worked in two early stage startups and at big tech early in my career, this depends entirely on your experience level and on the engineering team’s. At a big tech company you are far more likely to work with highly experienced engineers and learn from the best then at a startup. That being said, it depends completely on who they have hired before you or on your own experience level (especially if you are employee #1). My advice is to meet the engineering team and make sure that you have a good opportunity to interact with them during or after the interview process.

&gt; So if you consider an offer from a seed stage company, and try to estimate your upside, divide the shares amount offered to you by at least 1.5 right away.<p>No, multiply by 0 right away.

This comment is probably to be downvoted as off topic, but in case anyone missed this gem.<p>Here Comes Another Bubble: <a href="https:&#x2F;&#x2F;youtu.be&#x2F;I6IQ_FOCE6I" rel="nofollow">https:&#x2F;&#x2F;youtu.be&#x2F;I6IQ_FOCE6I</a>

The delta between first employee and founders is wildly underplayed in this article.<p>In our case: one founder worked unpaid for almost a year. After incorporating, we both continue to work much longer hours than our first eng hire. In addition, our first hire walked on to a market salary, health insurance, and a company with paying customers and $3m in the bank. ie at least an order of magnitude risk reduction. Both founders continue to take much less salary than the first employee.

Be very cautious about accepting any position at a startup as the technical founder but they treat you like employee #1. You will quickly find that you are (seemingly) doing most of the work but not receiving anywhere near your fair share. Ideas are easy, building them is hard. Don&#x27;t be fooled by a higher salary at the expense of more equity.

I don&#x27;t really understand why dilution is such a common thing. Why not just issue a fixed number of shares at the beginning and plan for future funding rounds? If I was a founder of a VC-backed startup, I think it would be much more fair to sell my own shares to investors, instead of diluting all of my early employees.<p>If you offer your first employee 1% of the company, but everyone knows that they&#x27;re going to end up with ~0.3% after all the dilution, then just give them 0.3% and promise that there will be no dilution.<p>EDIT: I just got to the end of the article: &quot;Finally, we structured our company in such a way that our tokens never dilute.&quot; That sounds like a great idea to me.

If you&#x27;re good enough to get into Google&#x2F;Facebook&#x2F;etc, you should demand more money to work at a startup. The risk is higher.

Ask for and actually read the company stock agreement line by line before agreeing to join. The article does not mention clawback which is another thing to look for:<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Clawback" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Clawback</a>

This is simply a detailed argument to consider opportunity costs. One concerning thing, to me, is that it mostly centers around money. There are so many &quot;pivots&quot; and re-orgs to become the next 10x grower that kills morale. If it&#x27;s VC-backed I would stay far, far away.<p>Anyways here are my takeaways.<p>Pros: Had a bit more freedom to push my solutions and learn quickly. For example, at one point when we needed scaling I was able to be a decision maker on which technology to use (landed on Spark). Faster-pace, and there is a sense of ownership of the product.<p>Cons: The product itself can change if an investor freaks out. Founders often feel entitled to your time and effort in a very unhealthy way. Possible long hours and high stress.<p>The author has a great point about expectation value. What is the probability of punching that lottery ticket times an employee&#x27;s payoff? This should be the calculation. If it is higher than your sweet job at Google, go for it, if that&#x27;s what matters to you.<p>Being able to &quot;only&quot; work 40 hours a week and make 350k sounds like the lottery ticket to me. I hate to be so preachy about it but working 7 days a week, 60+ hours a week, giving up family, friends, social life and hobbies, for years on end, to be millionaire instead of a super comfortable hundred-thousandaire sounds a bit over-the-top.

Generally true, but the upside of a bigcorp is higher than indicated, which significantly dilutes the financial upside of startupland.<p>The quote: &quot;after accounting for dilution you will get around $600K, which is more than what Google would have paid you on top of the base salary&quot;<p>Here the answer is.. maybe. Senior Software Engineers @ Google earn $350k or so, so over 5 years thats about $170k&#x2F;year RSUs, or $850k over 5 years.

A disproportionate amount of this company&#x27;s employees are ICPC winners&#x2F;finalists. I am getting Imposter Syndrome just by looking at that page. oof.

I think it&#x27;s worth keeping in mind that most people don&#x27;t live in SF and most people wouldn&#x27;t get a job at FAANG. People work at startups often because their reasonable alternative is working at a dev shop or the back office of SomeBigCo. Startups offer more energy, learning, and often even pay (thanks to investor capital) than these alternatives. Yes, the amount of equity offered may not be justified from an ethical point of view, but it does seem to be a market-clearing rate.

The article doesn&#x27;t seem to mention the concept of a liquidation preference. Your 1% could be worth $0, even in a $50M exit.

&gt; And (again, just a personal advice) you should only accept an offer if you plan to immediately forward exercise all the offered options<p>horrible advice

&gt;&gt; A $10M acquihire brings $3M to the founders, so they are likely to accept the offer, leaving them significantly richer, and you with $100K that are unlikely to cover what you would have made if you joined Google instead.<p>This doesn&#x27;t sound like a very bad scenario at all. 100K is a lot of money. Also, back then there was a risk that maybe Google would not have grown as much as it did.<p>&gt;&gt; But if you join as employee #10, and are offered 0.1% of shares, the story is completely different. If the company exits for $100M, you only get $60K, which is a completely meaningless number if you invested few years of your life into the company.<p>That&#x27;s almost one year of an average person&#x27;s salary in the US. It could pay for someone one year to work on their own project.