Re:Who pays when startup employees keep their equity?
by shon on Tuesday July 05, 2016 @02:36PM
(#12038536)
In my mind, startups are less like the lottery and more like blackjack. You are gambling either way (as with any investment) but, with blackjack and startups you can optimize.
Unlike the lottery, knowledge and skill play a role here.
Re:Who pays when startup employees keep their equity?
by rdtsc on Tuesday July 05, 2016 @04:00PM
(#12039099)
> Unlike the lottery, knowledge and skill play a role here.
True, but that's not quite the analogy I was going for, the analogy was how survivorship bias is used in both cases for promoting the idea-- everyone picks the winners and remembers / tells / markets those while disregardign the losers. I do it too, it is just a natural human tendency.
In both cases, if every time someone heard about a successful startup they also heard about many failed ones, they might have a different perspective.
Re:Who pays when startup employees keep their equity?
by morgante on Tuesday July 05, 2016 @06:05PM
(#12039851)
The odds for startups are a lot closer to a lottery than they are to blackjack.
Re:Who pays when startup employees keep their equity?
by Artemis2 on Tuesday July 05, 2016 @08:43PM
(#12040531)
Of course, but it's about control over your chances of winning big
Re:Who pays when startup employees keep their equity?
by bostik on Wednesday July 06, 2016 @12:54AM
(#12041287)
Considering that the biggest factor for turning a startup into a massive success is luck, I find that sentiment delusory.
The best you can do is to accept that you're not an expert in picking winners. (Just see how many hedge fund managers underperform the market. Even the supposed experts have problems doing any better than random decisions.)
Re:Who pays when startup employees keep their equity?
by marssaxman on Thursday July 07, 2016 @06:06PM
(#12052375)
You have no control unless you are part of the core management team and even then you don't have very much. Startup options really are a lottery, and just because other people sometimes win doesn't mean you can actually count on getting there yourself.
Re:Who pays when startup employees keep their equity?
by wastedhours on Wednesday July 06, 2016 @08:06AM
(#12042515)
I choose my lottery numbers, so have an illusion of control over my destiny as well.
Re:Who pays when startup employees keep their equity?
by rhizome on Tuesday July 05, 2016 @03:33PM
(#12038913)
Unlike Blackjack, you have to make your entire bet for all hands up front.
Re:Who pays when startup employees keep their equity?
by rezlov on Tuesday July 05, 2016 @02:33PM
(#12038509)
That's the name of the game. You take a risk to make big money, and sometimes that risk doesn't pay off.
Re:Who pays when startup employees keep their equity?
by JohnTHaller on Tuesday July 05, 2016 @02:38PM
(#12038558)
*Most of the time in the case of startups
Re:Who pays when startup employees keep their equity?
by rhizome on Tuesday July 05, 2016 @03:34PM
(#12038925)
Or you start working for a company thinking their product(s) are cool, strong and survivable as its own thing, and then it turns out the plan was not to build a business but to cash out.
Re:Who pays when startup employees keep their equity?
by vinceguidry on Tuesday July 05, 2016 @08:07PM
(#12040391)
You're still taking a risk, only you're betting with your time and not money.
Re:Who pays when startup employees keep their equity?
by rhizome on Tuesday July 05, 2016 @10:58PM
(#12040934)
Actually it was only 7 months and I still got ripped in the deal. You can say "low risk, low reward," but in the big picture my reward was sorely out of scale to my contribution. Sorely.
Re:Who pays when startup employees keep their equity?
by pm24601 on Tuesday July 05, 2016 @07:07PM
(#12040164)
or you get laid off,
or you get diluted,
or it takes 6 years and you want to do something else with the rest of your life, ....
I have watched friends get paid a smaller salary, hoping for a great exit only to find their options diluated or the company just simply failing.
Now you probably only have lucky and successful friends or that friends who didn't get enough cash to buy a house are probably not in the back of your mind, as nobody wants to advertise either their failure or failure of their friends.
It just get chucked to "oh well, startups are risky". But then the winner get famous and everyone talks about them, making it seem like joining a startup and accepting options instead of a good salary is a sure way to succeed.
Notice, this is the same process the lottery system uses. We make fun of those people, but it is the same idea. Lottery always havily publicizes their winners, that is not just random marketing but a very useful tactic -- make everyone believe they can win took -- "Look at him, they got a huge giant check, so can you". If they televised ever single lottery loser, nobody would buy the tickets.