You mean the employees who chose to work there understanding the terms of their deal? The employees who probably just made a ton of money themselves from this deal? What exactly is unfortunate about this? Are you upset that some people made a lot of money?

In fact, many people don't understand the deal in detail (e.g., what may happen during an exit), nor the cap table.

E.g., one person I know, an Employee #1, was shocked to discover that investors only held ~15% of the startup he was at, which he joined just a couple of weeks after incorporation, and the founders held nearly 80%. His equity was IIRC 1%, which he thought was great, and was assuming that the founders had maybe 10% each, with a big option pool and a much-larger investor ownership. Ok, so his numbers didn't change just from learning everyone else's, but he wouldn't have agreed to 1% if he'd known.

It's not the founders' fault. They acted in their own self-interest, and did not volunteer information that would have negatively impacted their position.

But the employee still had a right to be upset, same as any of us would be if we discovered that a teammate for the last several years had been pulling in twice your salary, when you were told "sorry, this is as high as we can go."

This is an unfortunate symptom of a huge problem with equity compensation: Valuing a stock option is difficult, even for finance pros. You need to understand the cap table, understand the company's current (and expected future) finances, the exact legalese in your offer, and how reality is likely to change as you remain employed. It's even more difficult when founders/investors don't tell you all the information. Your typical "Employee #1 Tech Bro" hasn't got a chance vs. the sharks. It's like an amateur sitting down at the poker table with 8 other seasoned pros.

>It's not the founders' fault. They acted in their own self-interest, and did not volunteer information that would have negatively impacted their position.

This is a super capitalist thing to say. Anyone can understand _why_ the founder acted in their own self interest here, but to say it's not their fault is to just remove all agency from them.

Maybe it's in my best interest to have someone murdered so I can take over their business. Would you say it's not my fault if I did so?

The Pie fallacy is false on shorter periods of time. In the real world. The Pie size is fixed. Or atleast the Pie size expands only in cycles.

So in one particular cycle people try to gather as much Pie for them as they can.

There fore ultimately one has to be selfish, even if not out of nature, but out of sheer compulsion. These days you have to do these things just not to get walked over.

You don't have to be selfish, we're not automatons that have no free will.

If you're starving, or need shelter or some other basic to survival, then yes you need to be selfish. After that being selfish is a choice

I agree with you in the sense that people are accepting those offers rationally. However, those employees just like the instagram and whatsapp employees got extremely lucky. 99% of startup employees will likely not make what they could if they worked for a big tech companies like Microsoft which pay with liquid relatively minimal risk stock.

My point is that startup equity is shit in all but the extremely rare unicorn cases for everyone except the founders and VC's.

I always laugh when I see startups offering microscopic equity while founders horde orders of magnitude more stock acting like what they have done is worth hundreds of times more what your early employees do.

> You mean the employees who chose to work there understanding the terms of their deal?

As if anyone can just choose to be working for a company with the right terms, in a position to make a multi-billion dollar sale, and also somehow not get screwed out of what they thought their terms guaranteed.

you're right, people can't. If you want shot at a significant chunk of a multi billion dollar sale you start your own company. As the github founders did.

If you want up be paid $x a fortnight right from the get go then you get a job.

I don't see how the success of people who chose to do A means people that did B got screwed, just because they both worked on the same project. The decisions they made and context of their choosing to work on it were still different things each with their own pros and cons

Unless there was some more to it. Like share /options shenanigans that might not be legally fraud but fraud in spirit. No one seems to be saying that happened here though.

> If you want shot at a significant chunk of a multi billion dollar sale you start your own company. As the github founders did.

False dichotomy. People join startups (esp. early ones) thinking they have a shot at a significant chunk. But even for the very first employees, the equity numbers are ridiculously small. I don't understand why they sign up for it.

All my friends in startups work damn hard and poured huge chunks of their lives into it, and it has not been fun watching them be offered meager positions post-acquisition, while their founder/CEOs get multi-million paydays.

That is why you get paid for your time, and it is probably a lot. Leave work at work and move on when it is time. It's just a job. Those founders did much more than the people you know. They took a massive risk at complete failure

Does those people being wrong mean anything from a moral /rightness / "getting screwed" perspective? I make mistakes like anyone else, sometimes pretty big ones to the tune of quite a lot of money. Wouldn't say I've been screwed though. I just fucked up.

So, you are positing that the employees were screwed here? Do you have some evidence for that claim?

Only if you're suggesting that the employees chose to work there because they thought they had the right terms and were expecting a multi-billion dollar sale from which to benefit. If you have evidence for that, I expect you've freely chosen to work for such a company yourself and that you're entirely confident in your situation. (Or else the money just doesn't matter that much to you. That's ok too!)

They're all free to attempt to start their own GitHub competitor, if they're able. The founders of GitLab did.

Yes, hooray for freedom. Have the same opportunity, personal fininces, acceptable level of risk, and luck is another matter.

I don't see how it makes any sense to demand a hefty cut from a successful investment while intentionally turning a blind eye to the risk that was assumed by the actual investors. For exampld, I really doubt these we would be discussing how employees were obliged to pay up the company's debt if Github was bankrupt, and how it would be immoral for them to not be responsible for the venture's finantial outcome.

I often see debates around here about whether or not people should accept equity as part of their compensation or prefer all-cash. My perception is that there seems to be a lot of support for the cash-only position. That is fine. Nobody gets to have their cake and eat it too. People who chose to accept the risk, in this case at least, were richly rewarded. Lots of people at other companies choose not to accept the risk and they are protected if their employer happens to go bust.

Did Obama win the lottery? Did Bill Gates?

Bill Gates was born to a rich family with connections, so he basically did win the lottery

In a manner of speaking, yes.

No one forced them to work there.

I'm not sure what part of my comment you are responding to.

This part:

> on the backs of their employees

Is my comment somehow unclear? I don't think I said or even implied that anyone forced anyone to work anywhere.

Perhaps you should just say specifically what you implied, then?

If it's that unclear then I'll rephrase it: If you make a gamble that requires someone's help to pull off, and the gamble is successful, you should share a reasonable amount of your success with the people whom made your success possible. I don't think these founders are sharing a reasonable amount with their employees, and I also think it's sad that this is not only accepted, it appears to be encouraged.

Also employee owned cooperatives are cool, and I wish there were more of them.

> I don't think these founders are sharing a reasonable amount with their employees

Based on what?

Based on the percentages presented in the article that this post is based upon.

What should the percentage have been?

The point I'm making is that my opinion is that the founders here were unfair and that American laborers should expect fairness, not that they paid them some specific amount less than they should have- though I suspect you know this. If you'd like to have a genuine discussion with me then feel free, but whatever you currently appear to be after I have no more interest in pursuing.

GitHub employees agreed to work for pay, both in competitive guaranteed wages (salary, health insurance and other benefits) and also with stock, which is not guaranteed. Sounds fair to me.

You don't think it's fair -- fine, but what would be fair?

Who is suggesting otherwise?

The fact is that the multi-billion payday would not be possible, had they not convinced so many talented people to work for equity-peanuts. Kudos to them!

According to Glassdoor, average programmer salary at GitHub is $150k. That's hardly peanuts.

Bay Area overflows with job opportunities.

If those talented people would rather get a risk-free work at Google/Facebook/Microsoft for $250k, why didn't they?

Majority of software startups require just as much work, pay even less in base salary and their equity is worth $0 in the end, because the founders didn't create a valuable company.

You say employees got screwed because they worked hard and didn't make tens of millions.

I say they got supremely lucky.

A 0.1% of 7.5 billion is $7.5 million, which is more than you can hope to make from cushy G/F/M jobs and certainly more than you can hope to make from an average Bay Area startup.