I agree with your overall message, but base salary itself is very important. That's what puts a roof over your family's head and food on the table. Bonuses and RSUs might accelerate retirement, but I wouldn't put them into the overall household budget.
Easier said than done in the Bay Area without 2 good salaries, especially for those with kids.
RSU / options are lottery tickets not a reliable income stream.
Options at startups are basically worth nothing, unless/until the company becomes a breakout success. Even then you generally can’t sell them unless there is an IPO or you do a second market deal. These really are a lot like a lottery ticket.
I won’t get into all the ways options can be worthless even if the company does well enough to IPO, and you actually managed to exercise / keep the shares you vested.
Also, some later stage non-public startups issue RSUs instead of options. These too are closer to a lottery ticket.
When they ask, "how much are you currently making", just politely say that you would rather not go down that route, and please make me an offer you feel is fair for my skill set, and start from there. Hiring managers and departments do this a lot, and know all the numbers, and you, who change jobs infrequently don't have up to date info. What's shocking is how fast silicon valley salaries are increasing.
When I started this software engineering gig in the mid 1990's, a great offer for a fresh grad out of school was $45,000. Inflation adjusted, that's around $75,000 today. When my small company hires today, I get the special joy of making counter-offers against Facebook and Google, these two companies are simply nuts. Recently lost a fresh grad from a first tier CS school to an offer of $150k annual with $100k starting bonus from Facebook, not to mention RSU. Effectively $350k for the first year for a student with a bachelor of science. It's nuts. This guy was really good, but more realistic offers only lack that starting bonus.
I am really curious to see the difference in performance between two fresh graduates of different schools, and the difference after 2,5,10 years experience.
(b) An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment
Unless you're a C-level employee, you're not going to have the choice. And even then you're probably still not going to have a choice except in very rare cases (e.g. Uber's new CEO might have some decent protections). If you're "just" an employee, you're going to get laughed at if you demand anything besides common stock.
founders give up ((potential salary + RSU at a megacorp - salary at the startup) multiplied by number of years at the startup) while employees give up ((potential salary + RSU at a megacorp - salary at the startup) multiplied by number of years at the startup). Did you notice any significant difference? I mean there may be difference between megacoprs and numbers of years at the startup, yet does it warrant like 100x and larger (like div by 0) difference in the outcomes?
When you are the person worrying about making your number on a monthly basis, so you can pay your team ... whom aren't worried about this, because they get a salary ... and you sometimes/often can't pay yourself, so that you make sure that everyone else gets paid ...
... yeah.
When you do that, you are putting real skin, real risk into this game. Your reward should be commensurate with that risk if it pays out.
In my case, it didn't.
I got all the stress, pain, heartache, overdue bills, while dealing with skittish customers, people who demanded free things, etc.
All the while, growing a business from nothing to millions in revenue, with no VC involvement (not for lack of trying). To watch it shot in the head by the bank after sinking my entire worth into it.
I understand why founders/CEOs should expect excellent return upon a positive event. If they don't, then why, exactly, should the bust their behind as hard as they do?
I'd be interested to hear more of the story if you're willing
you've missed the important point. It isn't for everybody. I specifically mentioned that it is already successful people with a lot of good connections. Thus such a startup is just the next step in the career progression. For a plain engineer, like me for example, who can't make even a CTO/VP of engineering of a small company or a Director/division Chief Architect/etc. at a BigCo creating a startup would be exactly or even worse than described by grand-grand-parent. There is a reason that early stage VCs, for example YC, invest in people, not ideas/business. One of the friends got invested with "just name the number" amount right on the spot the moment he mentioned that he got his own startup even without telling what his startup is intended to do (of course there were due diligence done by small people afterwards before things formalized on paper) Where is couple other friends, engineers more like me, who went through a very harsh interviews at those few VCs who agreed to listen to them and got, unsurprisingly, nothing, and still sitting as engineers.
>It sounds like you're complaining,
there is huge difference between recognizing reality and saying that the reality is unfair (which it just can't be by virtue of being the reality)
Starting a business isn't for everybody because it's a lot of stressful work. You have to wake up early and stay up late laying the foundation while your friends or spouse or kids or work are vying for your attention. You have to scrape together your savings or max out a couple credit cards to actually launch your product. Once you start hiring you are responsible for putting food on other people's tables. And even once you start making money, you have no idea what you're doing pretty much every step of the way.
If you actually do want to start a business, just fucking sit down and do it. There are a ton of profitable, bootstraped SaaS companies out there. Build a product, pay for the first couple months of hosting out of pocket, bill yearly, profit. (Notice "get funded" isn't a required step.) Complaining that VCs probably won't love you is just an excuse to take the path of least resistance and stay mediocre.
This is 2017, the year of Harvey Weinstein.
What? You're wrong.
I am not claiming that the VCs are evil, or even a necessary evil. I don't think they are evil nor necessary. I think that they may be very inefficient when it comes to providing for a healthy economy that benefits everyone and not just themselves. Hate the game, not the player.
If it's easy to find programmers who will work for below-market rates, but hard to find investors who will contribute millions of dollars, then you can expect programmers to have much less negotiating power.
Putting skin in the game is:
* paying from your own wallet when there's a cash shortage
* being mentally prepared to have guns pointed at you and your personal assets for violating an obscure regulation No. 389343A, or just attacked by employees, investors, partners for whatever reason they can come up with
* being a face of a commercial entity and putting your reputation at stake. Most people on this planet don't see a difference between a billion dollar corporation and a penniless startup, and assume all companies are powerful and have unlimited funds. Hence, their key people are to be hated and mistrusted.
* and, last but not least, being prepared to be woken up at any given minute to fix an issue of any nature
What's the difference between donating half your paycheck to the company, and only being given half your paychecks?
> being mentally prepared to have guns pointed at you and your personal assets for violating an obscure regulation No. 389343A, or just attacked by employees, investors, partners for whatever reason they can come up with
VCs don't need to deal with the former. You don't get attacked in the case of the latter, you just get fired.
> being a face of a commercial entity and putting your reputation at stake. Most people on this planet don't see a difference between a billion dollar corporation and a penniless startup, and assume all companies are powerful and have unlimited funds. Hence, their key people are to be hated and mistrusted.
VCs make bad investments and founders make bad decisions all the time. The valley does not hold it against them for long.
> and, last but not least, being prepared to be woken up at any given minute to fix an issue of any nature
Here's where you're wrong - in a startup, engineers are the ones who get woken up at any given minute to fix an issue of any nature. Investors sure aren't.
You really think there is a set percentage how much one needs to contribute?
Wait, you actually mean that "covering shortages" means "taking smaller salary", don't you?
>> being mentally prepared to have guns pointed at you and your personal assets for violating an obscure regulation No. 389343A, or just attacked by employees, investors, partners for whatever reason they can come up with
> VCs don't need to deal with the former. You don't get attacked in the case of the latter, you just get fired.
I was about to reply with "hahaha" but then thought you really don't understand.
1. Not all startups (in fact, only a small share) are VC-funded. In many cases, the funds come from personal savings. In case I need to break it down to you, loss of personal savings is not necessarily taken kindly. 2. There is exactly 3,493,231 ways things may go south, it is not at all guaranteed it will all be limited to firing. As a matter of fact, when things get serious, it usually isn't. I witnessed it more than once firsthand, from different angles.
>> being a face of a commercial entity and putting your reputation at stake... > VCs make bad investments and founders make bad decisions all the time. The valley does not hold it against them for long.
A couple of things: 1. America is not the entire world (shocking, I know). 2. Silicon Valley is not the entire America. 3. Bad reputation sticks for a very, VERY long time. Longer if you upset someone powerful.
>> and, last but not least, being prepared to be woken up at any given minute to fix an issue of any nature > Here's where you're wrong - in a startup, engineers are the ones who get woken up at any given minute to fix an issue of any nature. Investors sure aren't.
I assume you mean "founders", not "investors" (because why would investors be working?).
While startup engineers are overworked (depending on a startup - I personally think it's a bad idea, and never do it to my employees), there is a million unseen things going on outside of development which nobody bothers to tell you.
Do you think these funds arrive on their own without a fight after the invoice is issued? Do you think these investors just act rationally and it works as if you lodge your job application? Do you think the interaction with lawyers, accountants, authorities is limited to 5 minute emails, and they are picked randomly, or shopping around takes half an hour?
Finally, who wakes up the engineers - do the founders do it in their sleep, in your opinion?
First, there are a lot more programmers than there are companies, and programmers are not unionized, so presenting a united front will be difficult if not impossible.
Besides, programmers want all sorts of different things. Plenty of us are happy to work for less pay at startups regardless of the equity situation, and the reasons vary: maybe it's a big step up from their last job, or the location is great, or they like small startup environments more than BigCo, or they didn't get the job at BigCo, or they're trying to build up a specific skillset, etc. It's not at all clear that common vs preferred shares is the hill that most of us would choose to die on.
What risk? The only risk I've ever had as an engineer at a startup was the risk of losing my job (which everyone has, they just ignore it). And let's be real, a good engineer can find a new job at the drop of a hat. The risk is nil.
Is this really true for more than the top subset? For instance, are there really a significant number of engineers at Oracle or Cisco getting that much non-salary compensation?
Bonuses are often structured as a % of your base salary based upon your rank. More senior engineers will get an extra 10-25% each year essentially automatically.
This is separate from RSUs, which vary a lot more widely. Their value is especially dependent upon company stock performance.
Cash bonuses are a different animal. I agree with your range (at least if you exclude defense contractors). Those alone are well short of doubling compensation, though.
The reason part of your salary is a bonus rather than the base is so that it can be withheld if necessary, eg in a bad year. Believing that bonus is an automatic extra 10% will, one day, leave you 10% short of your expectations.
Q: “What does an ordinary non-elite baseball team do?”
A: “Well the Yankees...”
12: 5%
24: 15%
30: 20%
36: 20%
42: 20%
48: 20%
Base salary is capped at $160k in most locations, $180k in ultra-high COL areas like San Francisco and New York City.
Source: I work at Amazon
http://www.businessinsider.com/employee-retention-rate-top-t...
Not saying it’s a bad thing just that vesting schedule is Something to think about when comparing offers. Liquidity is worth something.
I met tons of people who did 2 years at amazon and departed to Facebook for a fat offer that was worth far more than the remaining unvested amazon stock.
Trying to nickle and dime people when they come in the door just leads to people departing early. Employee turnover is a massive cost.
At some point it is less about money and more about where you want to spend your time.
This is not true.
Also, I am skeptical that it is actually that many whom are employed by that subset. I have not seen any of them break down their headcount by role, but the majority of their employees would need to be software engineers and I don't see how that can be the case.
Are you kidding me? I go and check salaries on Glassdoor and find out that about $85k/year is still the standard here in Boston for junior and mid-level engineers. And you're telling me that a median of $134k/year in the Bay Area is low?
Check out www.h1bdata.info for what h1b holders are getting paid. The US Department of Labor forces this disclosure and is pretty up to date.
Your tiny startup's cheap workers are probably in there too and you can deduce exactly who they are even though the names aren't in the disclosures.
Unions can be extremely helpful. SWE would be the perfect people to build new custom solutions for unions to get around many of the negative externalities caused by unions.
However, people don't want to unionize while they still have leverage. When software engineers are finally ready to unionize, they're going to have way less leverage and get much worse deals.
The bar is an accreditation and verification system as well as a means for upholding ethical standards across the membership.
In short, a math major with a CS emphasis should be allowed to take the exam. Or, in my opinion, even someone who is just really great at self study.
[1] I know, there are some alternative paths in law, but still very limited.
Worst case scenario is that after earning USD for 2 years on an E3 visa, you return home more experienced than your peers with "Silicon Valley Startup Experience" in your resume, if that is something that appeals to you. Stronger startup ecosystem on the small scale, bigger problem sets on the large scale.
Don't get me wrong, the startup and tech scene in Sydney has grown into a solid network over the last 5 years, but you have to weigh that against the certain knowledge the Bay Area accounts for 40% of U.S. venture funding and even that pales in comparison to the tech giants who are either based or have sizable offices here.
In terms of lifestyle, Sydney will always win. I suspect this is why there is such a strong loop back home after Aussies spending some time here.
RSUs and bonuses at established companies will easily double your take home pay.
Even the salary figures themselves look low and are probably heavily skewed by an overrepresentation of underpaying startups. My base salary ~4 years ago was in the 90th percentile according to this. It’s unlikely I was among the 10% highest paid Bay Area engineers at that time.
Don’t settle for a mediocre salary in an area with absurdly high cost of living. Don’t be satisfied with these averages. Funded startups will pay more if they need to.