I'll repost a previous comment for the benefit of the HN community concerning exactly this situation for start-up employees from https://news.ycombinator.com/item?id=5255362 (great discussion there btw), for those who missed it the first time around (hope that's ok):
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Here are a few tips for others startup employees:
1. Take the least amount of stock possible - your startup is statistically unlikely to succeed. It'd be better to bump your salary up $10-20K than to get the stock.
2. Unless it's liquid - it's worthless.
3. Valuations pre-cashflow - are useless. Anybody can value anything at insane levels using just one dollar. I value HN at $1 billion by offering to buy only 1 share of 1 billion in common stock for $1 right now. See the implicit valuation leverage. I took a dollar, then invented the billion.
4. If you work for a "nasty" startup - one which people can consider to be negative long term to one or more parties - expect eventual collapse or flat line growth (Zynga/Groupon).
5. Companies exist to make management, investors and founders rich - they hold the vast majority of the stock - and benefit greatly from path dependence and network effects. You on the other hand don't. Expect to be screwed at any time.
Think of it like this. Managers/founders of most companies are pretty dipshit - how is it that they can own so much more stock? Simple. Be there earlier! Akin to how old money works. Imagine if you were the first person to squat land near what has now become Manhattan. You'd easily be worth hundreds of millions. There is obviously some skill in researching, predicting, working and acquiring land that will soon appreciate in value. But it's not worth nearly that much. Path dependence, luck and network effects do that. See GFC boom and that dumbass cousin who made and almost certainly lost millions in housing to understand how this works out.
Startups really aren't that different to a speculative investment in a house during boom times. Once you understand this - a lot of things start to make a hell of a lot more sense.
6. PG says be relentlessly resourceful. That's useful. But even better is to be relentlessly cynical.
Free t-shirts? Just an easy way to drop your salary and indoctrinate you - scratch that - it's a god damn uniform - freedom be damned! Free food? You took a $30-$40K pay cut to take the damn job - the food isn't worth a tenth of that + you're now working during lunch hours! Free hardware? That's only $2-$4K.
Hackathons? That's just work during your free time - or if it's during work time, it's a startup product you should own, but don't. More days off? Aren't you already working 60+ hours a week today! Culture shit after work? That's just more indoctrination. Gym membership? Only $200-500 - peanuts! Flexible work hours? That just means work more, but do it at times that aren't 9-5. Parental leave? Big companies and Europe have had that for ages.
Oh, and that culture fit crap? That's just discrimination - rebranded! What? You don't like what other late 20s upper-class educated males like? Be gone heathen!
End advice.
Not saying big companies or government jobs are any better. But at the very least you're already cynical about those things and demand to get paid well enough in risk-adjusted terms.
> 1. Take the least amount of stock possible - your startup is statistically unlikely to succeed. It'd be better to bump your salary up $10-20K than to get the stock.
This is a worthwhile suggestion regardless of startup or not. You don't want a large portion of your assets tied up in the company you work for, where a calamitous event can both cause you to lose your job and your savings. Take the cash, invest it in / bet it on something where there is low correlation between the investment performance and your probability of continued employment.
I watched friends who worked at Washington Mutual with tons of WaMu stock see their "retirement" disintegrate in a couple months then getting rewarded with a pink slip. Not even a risky start up. That was a pretty painful.
"Relentlessly cynical", you sound like a great person to hire!
Someone like you shouldn't work for a startup. Go and work for a big company, go poison the atmosphere there. It's just not a good fit on both ends. If they're cheating you so bad, if it's so obviously a bad deal, why do you even care? In your view, startups suck and no one makes a lot of money or learns anything, so you aren't missing much.
Oh, please. Everyone should be cynical about the work arrangements they get into, because let's face it, the company as a whole doesn't care about you. You are a replaceable resource. If you believe otherwise then you are hopelessly naive.
I remember talking to a friend of mine who had to fire half his workforce in order to give his company six months more runway to succeed- he was absolutely devastated about it. Those coworkers were his friends and allies. He still did it, though. To a certain extent it wasn't even his choice.
I don't think you should get the downvote but I think you're completely off base. The parent makes great points; one of the best comments I've seen on HN in a while. I think these points should be something that anyone looking to join a startup understands. The culture fit as discrimination, t-shirt as indoctrination, the idea of giving up salary for modest are all real negatives in many cases that seem great to many, especially younger people. Not all startups play these games. If you want to work for a startup that does, that's fine, you may have a good reason to, such as a belief it will be a hit or wanting the experience, or what have, but be informed that these things really are tricks and games, whether or not the founders realize they are playing these games or are just "cargo culting" things they read in TC.
Realizing these things does not make you a corporate workaday drone.
...
Here are a few tips for others startup employees:
1. Take the least amount of stock possible - your startup is statistically unlikely to succeed. It'd be better to bump your salary up $10-20K than to get the stock.
2. Unless it's liquid - it's worthless.
3. Valuations pre-cashflow - are useless. Anybody can value anything at insane levels using just one dollar. I value HN at $1 billion by offering to buy only 1 share of 1 billion in common stock for $1 right now. See the implicit valuation leverage. I took a dollar, then invented the billion.
4. If you work for a "nasty" startup - one which people can consider to be negative long term to one or more parties - expect eventual collapse or flat line growth (Zynga/Groupon).
5. Companies exist to make management, investors and founders rich - they hold the vast majority of the stock - and benefit greatly from path dependence and network effects. You on the other hand don't. Expect to be screwed at any time.
Think of it like this. Managers/founders of most companies are pretty dipshit - how is it that they can own so much more stock? Simple. Be there earlier! Akin to how old money works. Imagine if you were the first person to squat land near what has now become Manhattan. You'd easily be worth hundreds of millions. There is obviously some skill in researching, predicting, working and acquiring land that will soon appreciate in value. But it's not worth nearly that much. Path dependence, luck and network effects do that. See GFC boom and that dumbass cousin who made and almost certainly lost millions in housing to understand how this works out.
Startups really aren't that different to a speculative investment in a house during boom times. Once you understand this - a lot of things start to make a hell of a lot more sense.
6. PG says be relentlessly resourceful. That's useful. But even better is to be relentlessly cynical.
Free t-shirts? Just an easy way to drop your salary and indoctrinate you - scratch that - it's a god damn uniform - freedom be damned! Free food? You took a $30-$40K pay cut to take the damn job - the food isn't worth a tenth of that + you're now working during lunch hours! Free hardware? That's only $2-$4K.
Hackathons? That's just work during your free time - or if it's during work time, it's a startup product you should own, but don't. More days off? Aren't you already working 60+ hours a week today! Culture shit after work? That's just more indoctrination. Gym membership? Only $200-500 - peanuts! Flexible work hours? That just means work more, but do it at times that aren't 9-5. Parental leave? Big companies and Europe have had that for ages.
Oh, and that culture fit crap? That's just discrimination - rebranded! What? You don't like what other late 20s upper-class educated males like? Be gone heathen!
End advice.
Not saying big companies or government jobs are any better. But at the very least you're already cynical about those things and demand to get paid well enough in risk-adjusted terms.