As an employer, I'll push back on this. I'll start by saying that if you want equity, then by all means seek out jobs that provide equity.
In mu experience, people don't want equity as much as they want a living wage. They want a proper salary, every month, not some mythical payday in the future.
If you can find a place that does both, thats fantastic.
Incidentally if you have meaningful equity that comes with a bunch of stress as well. Our responsibility is to make payroll every month. In good years we get some profit (so do employees) in bad months we get paid last, sometimes short, sometimes late.
I've voted you up, not because I agree with your point, but because you help readers to understand that different people have different goals. And the trading of stability for equity is not necessarily exploitation.
>people don't want equity as much as they want a living wage.
I'd add the caveat that equity is worth more than it isn't so limited in usage for those it is distributed too.
1 year cliff, 4 year vest, but company likely to just retrench you? Worthless. Developers don't stay that long on average, and the sale terms are basically handcuffs waiting for an exit event. Constant promises of revshare when profitability is reached? Worthless.
Cash is king because equity is not only a lottery, but a lottery that you can't even control when you play or get rewarded for it.
"Anyone giving you a wage while seeking a profit instead of partner equity is taking advantage of you tautologically"
assume all startups have huge exit and don't account that equity can actually go down to $0 - that $100 I get today wired to my account does not go to $0 suddenly.
Then you might be stuck with equity because there might be no one who will buy it off - or company board won't approve of sale, so you might be sitting on loads of "theorethical cash" that you won't be able to materialize.
Still $100 wired to my account - if I can spend it - is not getting voted by company co-owners and if things go south, believe me, you will have a hard time to bail and getting any money back from the equity.
Just like lottery ticket, people don't see the downsides only that there is $8 000 000 to win and they hear in the news every 2 weeks someone wins. Where no one is making news stories about people who spend $100 every week for years and never won.
When I say equity over wage I don’t mean no profit sharing either, or no compensation for labor. Go learn about worker cooperative structures in practice. I’m not talking about joining startups on equity alone
My opinion is that getting lower salary for some equity has to be accounted against the fact that equity can go to $0 - yes you might be on ride for unicorn - but most likely not.
Worker cooperative structure sounds like a different thing that I usually read about which is people accepting lower compensation for some equity, which is usually bait and switch to get young talents work for less but for "some future unknown riches".
Getting equity has to be done with enough due diligence and by people who understand the downsides. People who can do due diligence and understand the downsides will most likely rather get their money in the bank unless it is really good deal to get equity.
> In mu experience, people don't want equity as much as they want a living wage. They want a proper salary, every month, not some mythical payday in the future.
People also don't want to be screwed over by their friends. A little equity costs the startup's founders very little, while making sure their friends see some benefit from a successful exit is worth a lot to those friends.
The concept of 'screwed over' usually boils down to a misunderstanding.
If I hire a friend, then the transaction is simple - do the work, get a salary. Whether the business does well, or badly, is irrelevant. How much I do, or don't, take home is irrelevant. There's no "fairness" in play here, it's a simple business transaction.
If you can't live with that then don't take the job. Join as a founder, or go start your own company.
Feeling "screwed" happens when you feel entitled to the upside, but don't take the downside along the way. When the business folds, and the owner loses his house, are you chipping in? Are you signing paper to cover liabilities?
I'll be honest, most friends cannot separate friendship from business. So yes, it usually ends badly. Usually because the employee I expecting things not in their contract.
>Feeling "screwed" happens when you feel entitled to the upside, but don't take the downside along the way. When the business folds, and the owner loses his house, are you chipping in? Are you signing paper to cover liabilities?
Hard disagree here. A startup only works if you get really motivated people to sacrifice a good portion of their lifetime to work for you. Most startups can't provide competitive wages with "big corp". If the startup folds these people lose their jobs, too. If it succeeds they should see a good part of the upside, too.
Working for a startup is a risky investment of your time. And should be rewarded accordingly. A startup that doesn't give you a living wage and at least a bit of equity is trying to screw you over.
A company that doesn't give you a living wage is indeed screwing you over if they don't make it up elsewhere.
>> A startup only works if you get really motivated people to sacrifice a good portion of their lifetime to work for you.
Either pay them for their work, or take them on as founders with founder level equity. Then you all float or sink together.
Employees who sell their time at low rates with the "hope" that they'll get rewarded on the day of sale (but without an agreement) are, well, bad at business. Hope is not a good strategy.
I completely agree that employees who pour in their time for little salary, and no formal equity, then they are fools.
Incidentally, if you think anything below Fang level salary is "low" then your thinking is too binary. Salaries are a continuum. There's no long long way between making a good living and Fang.
>Employees who sell their time at low rates with the "hope" that they'll get rewarded on the day of sale (but without an agreement) are, well, bad at business. Hope is not a good strategy.
They may be bad at business, but we were talking about joining a friend's startup here. If they're indeed your friend they wouldn't try screwing you over like this. And if you're joining a random startup, then of course be aware that most are trying to screw you over.
My point was rather that startup level salaries without equity _are_ being screwed over. Nobody expects the founders to give the same amount of equity to all employees. Of course the founder has an outsize risk here. But the employees do face a lot of risks with startups as well, so they should get some level of equity to match that. Otherwise they don't get any reward for that risk. Which is again, being screwed over. And also they usually have to invest more time in the startup than a normal corporate job, so that should be reflected in the equity they get, since most startups don't have the funds to reflect it in high salaries.
>Incidentally, if you think anything below Fang level salary is "low" then your thinking is too binary. Salaries are a continuum. There's no long long way between making a good living and Fang.
No, I was thinking about normal big corporate salaries. I don't live in the US though, so maybe that influences this. They usually offer more work-life balance, low risk, and a better salary than most startups.
If they are actually your friend, why are you not looking out for their best interests?
Whenever this topic comes up I always feel like I'm in some weird Silicon Valley Twilight Zone where "friendship" is some sort of code for "people I have access to exploit when necessary"...
The falls well below the bar for friendship in my book. Are you comfortable letting your friend agree to a salary significantly below their worth? Are you comfortable excluding your friends from potential upsides of your shared endeavours? That's at best a coworker, not a friend.
I’ll push back on everyone here: if you’re looking for a stable living wage, you’re a fool — especially in tech.
The economy is cyclical. Tech runs on speculation and (used to) on lax tax rules. Likewise, hiring is based on asinine processes, asinine vogues of fashion, and asinine practices. At any moment in time you could be made persona non-grata in tech.
If you joined tech for the passion of if, and you’re not independently wealthy, I think that is a foolish thing — no different than doing a physics PhD while inhabiting the middle or lower classes.
The most logical and rational path is to make as much money as quickly as possible, and enter the capital class. After that, do whatever you want. Anything else is just sticking your head in the ground.
> if you’re looking for a stable living wage, you’re a fool — especially in tech
I don’t understand what you are saying. I have this condition called “living”. If i am exposed to the elements for prolonged time I get cold, then sick, then I stop living. Likewise i need to eat regularly otherwise i will also stop living. In the current system we live in one meets these things by paying for them. They don’t accept IOUs, or not for long anyway.
These are non-negotiable minimums I need to fulfill. Even if someone offered me a deal where they pay me a huge sum after years of hard work, and this would be a certainty but nothing before, i could not accept it because i would have no means to sustain myself for the duration.
This is what bruce511 describes when they write “They want a proper salary, every month, not some mythical payday in the future.”
If a place offers me both a huge payday in the future and enough money in the meantime to stay alive I may accept that depending on the amounts in question and the probabilities as i see them.
This is what bruce511 talks about with “ If you can find a place that does both, thats fantastic.”
> most logical and rational path is to make as much money as quickly as possible, and enter the capital class.
Sounds good! I will surely do that once i can. Until then I will need that paycheck thank you very much. And call me a fool.
Although, I'd say this view, much as I share it, makes it harder to find companies to work for. Especially in a tougher job market like right now.
I'll do conversational technical interviews all day. Leet code and 6 interviews unrelated to the job, hell no.
It's cynical, but once you've been through the meat grinder with layoffs, obsessive VC overgrowth and unfulfilled promises, I don't see another way so get to where I want to be financially without either letting go and becoming a hermit or as you say "enter the capital class".
I'm not from the US. I've had the experiences that led to what I posted above with South African and UK companies. It's not isolated to the US - culture bleeds across.
... Wait, what on earth are you talking about? Like, assuming you're defining 'tech' as normally defined here (in practice, software engineer), there has never exactly been a huge shortage of jobs. These jobs are ~universally well above the locally prevailing living wage.
In mu experience, people don't want equity as much as they want a living wage. They want a proper salary, every month, not some mythical payday in the future.
If you can find a place that does both, thats fantastic.
Incidentally if you have meaningful equity that comes with a bunch of stress as well. Our responsibility is to make payroll every month. In good years we get some profit (so do employees) in bad months we get paid last, sometimes short, sometimes late.
I've voted you up, not because I agree with your point, but because you help readers to understand that different people have different goals. And the trading of stability for equity is not necessarily exploitation.