Only a handful of almost surefire unicorns can reasonably come anywhere near matching that, and that only in the eventuality that they don't pull a Zenefits and leave you hundreds of thousands of dollars to millions of dollars short and in need of a new job.
Anecdotally, last year I was contacted by such a surefire unicorn for a role that was actually very interesting. We crunched the numbers together, and the best case scenario was them effectively matching my current comp. Which was actually a great proposition for startup comp, the best I've seen. Still, nowhere near compelling enough to upend my life for a higher risk position without any financial upside.
I worked in startups for the early part of my career, including a fairly well known one that exited. Neither me, nor any of my colleagues in that startup, nor any of the many other startup employees in my network, ever made more than a few hundred thousands on our options. Many very talented engineers made nothing at all on large quantities of options granted by several promising startups.
It's no wonder that none of the recent graduates I interview nowadays is at all interested in startups. When I ask where else they are interviewing, it's always FAANG and other high-flying profitable businesses. Even more so for senior engineers, whose opportunity cost is even higher, typically in the hundreds of thousands per year.
Even with 10-20 years of experience in the bay area at small, medium, large size software companies, I've never ever made anything close to that amount.
Hitting 400k total comp if you have the right experience (5-10 years, good brand university or companies) is totally doable.
There's a huge amount of variance, within FAANG and elsewhere.
As a simple example, SDE III at Amazon typically pays a bit more than $300k. Principal SDE, the next rank above that, will pay well over $400k.
And don't forget that during years of steep stock appreciation, like much of the past decade, actual compensation will often be higher than that.
There's your problem.
Getting paid in options is the exact mistake I've warned about repeatedly in comments throughout this thread.
Yours is a fairly common case in SV: worked in a series of startups that "paid" you in illiquid options that ended up being totally worthless.
I'm willing to bet these very same startups encouraged you to value these options very highly: high 6 and even 7 figures, right?
These places don't pay well, because why should they? Talent is apparently willing to work their ass off for these "worthless options" that are sold to them as vouchers for surefire multi-million-dollar jackpots.
Also bonus closer to 15-20%.
400k for senior is pretty good, but still doable at a lot of the big companies.
I make over 300 and I'm not senior yet.
GP has replied elsewhere that all his employers were startups that paid him in "worthless options".
Indeed, you won't ever see $400k or even $300k working for startups that "pay" you in illiquid 0.001% stakes in what will surely become a multi-billion dollar runaway success (in which unlikely case your share will be diluted to nothing anyway).
You can certainly stick your fingers in your ears and sing LALALA while the rest of us make real money,. Your life, your choice.
Experience and fast career progression shouldn’t be overlooked when looking at startups.
The exec in charge was fired, and a lot of their key staff had already jumped ship by then.
The key points are:
1. Startup valuations are highly volatile. There were plenty of startups that were valued above the billion dollar levels, then sold for 8 or even 7 figures.
2. While profitable established companies can also go south, such companies pay you in cash and liquid RSUs, so if they spiral down you just switch to a better performing company. Getting most of your pay in illiquid options means you risk losing multiple years of earnings in the best part of your career.
Specifically, tons of talented people took a job in Zenefits based on the assumption that their illiquid shares will be worth six-seven figures, and likely will never see anything close to that in real money. Same thing wouldn't happen for those paid in liquid assets.
For perspective here I, and everyone I know who have worked for startups as an employee, have never seen a single penny from stock options. Maybe one day I will, but I consider them to be nothing more than a potential pleasant surprise down the line.
At a previous company, I exercised my stock options when I left. This cost me about $4K. Two years later, I got $12K back... not a bad return, but certainly not the "potential for early retirement" I was told when I joined.
Real world example: low to mid level engineers at Uber joining in 2014/2015 at this point have stock worth over $2m over 4 years if Uber successfully IPOs at $100b+. By that time, Uber was already at "scale", offering RSUs (options strike price would be so expensive that it would be a huge risk to exercise), and that $2m is almost definitely more than what you'd otherwise have received in the same amount of time working at Google or FB.
The most valuable thing I have is the remaining time I have in this life. Not the number in my bank account.
Then why work for a startup? Most will demand a huge amount of your time compared to other jobs. Why not pick a job which demands a sane amount of your time and spend your free time on relationships and hobbies?
Worked at many startups. Currently run a startup. No one has worked 80h weeks at any of them, except myself in the first year of creating my own startup.
If you really have friends working at startups for < 10% equity and doing 80 hour weeks, something is wrong.
Doing that consistently is unhealthy and sort of antithetical to building a thriving business.
I feel like a lot of it comes down to how strong your management team and market position are. Our CEO had a pretty crazy track record, and drove the company into a really interesting, strong position, and then wanted himself to have a good, sustainable family life, and would constantly reiterate that he wanted everyone else to do the same.
I have other friends who have had roughly the same experiences, again, anecdotally.
People skewed older than I expected for a startup. Most people were in their 30s, and the C suite people were mostly in their 40s. No one other than me was below late 20s, and everyone seemed laid back but competent.
I probed at it during the interview and was told that everyone leaves between 5-6, and that the CEO wanted to go home to his family and didn't expect anyone to do differently. When I asked engineers things about how days and weeks went there they were very direct about how people didn't stay late and didn't dance around the subject.
The CEO had already sold multiple startups while raising his family, so I assumed that he would be able to make the company successful without setting a precedent of burning yourself out and without us being under constant threat of death.
Also yeah, I didn't make nearly what I make now that I'm at FANG. But I ended up in a higher role and with more leverage than would normally be possible at my age and experience level in the new company, and got some cash from the deal, so it's been pretty great. But yeah, if I was just trying to maximize short term dollars earned it wouldn't have made sense to work there, since I couldn't have realistically known that this was the outcome.
Consider the compensation package a company offers. Companies that want young go-getters are more likely to offer high cash and equity; great benefits packages are better for drawing in risk-averse family types.
Also don't be afraid to ask straight-up what the working hours are like during an interview, ideally from the lowest-ranked person they'll let you talk to.
Disclaimer: I don't have strong data supporting any of this, just my personal experience and intuition from working in the bay area.
My advice to folks is that if you don’t have a very significant chunk of the company, ie >1% then the payoff can never be good enough to compromise work/life balance.
If you’re a founder or very early and have 5% or some such the. That’s between you and your family.
Probably still ain’t gonna pay off.
Most people aren't going to lie to your face that a normal week is 40h if they expect 80.
one kind sent rockets and recollected them, made robots run and jump. The other kind, shrank blog posts to 140 characters, or added a timeout to short messages, removed the thumb down button, and called them a new feature.
Today, we still remember the names of da Vinci, Tesla, Turing, not because they had a successful family ...
I just want to keep the dream I had as a kid.
So you're living based on how you will be remembered by strangers? That sounds incredibly unfulfilling and doesn't sound like a good way to live. In a few hundred more years almost no one will remember the names of those people either.
>da Vinci, Tesla, Turing
It's incredibly safe to say that you are not going to be as successful as these people. Almost no one achieves this much success in the sciences. At most you will probably advance your field by a few useful steps and then be personally forgotten about except in research paper footnotes.
>not because they had a successful family
You know who cares about you and remembers you more significantly than as a research footnote? Your family.
>I just want to keep the dream I had as a kid
Man, don't we all.
"I" am the best witness to my existence. Not the person giving my eulogy. Who are you to tell someone how to define what "fulfilling" means to them?
Pursue your own balance of values with passion, and allow others to be meaningfully different from you. Their desires don't diminish yours.
I can live with failing. I can't live with not trying.
Maybe go to another big co?
I'd hope even the smallest of startups is thinking about how users interact with their software and organizing those interactions into some sort of prioritized backlog for development.
In my limited experience in talking with other people, FAANG tends to not have as much process as finance, IBM, insurance or other 'boring big companies'.
Why? Is that simply because you are more familiar with the language or does the project actually require the raw power of Cpp?
2. yes, familiarity.
Oh boy are you in for a surprise. Whether a company is a startup or not is almost entirely orthogonal to a culture of “filling out spreadsheets.”
The point about FAANG paying so much gets made a lot, and that employees of startups are fools for their decisions, as if everyone's handed a dozen offers and makes a choice.
Most of us are lucky to get a single offer, sometimes after months of trying, so we take what we are given. The rosy picture portrayed on HN isn't at all accurate to my experience.
Though to be fair my current salary, as far as it is from the unrealistic portrayal of salaries here, still feels far better than almost any other job I would remotely have the capacity to do, and certainly far more than I need to live and have a pretty easy life if I were honest.
I'm payed a crazy amount of money to do something I love.
> The rosy picture portrayed on HN isn't at all accurate to my experience.
> I'm payed a crazy amount of money ["far more than I need to live and have a pretty easy life"] to do something I love.
You're living the rosy picture portrayed on HN. You react to $400k the same way most people would react to what you're describing.
At one point I was close to giving up on being a developer entirely after months of failing to find work, though thankfully I had a friend from a former job who helped give me a legup to a startup he was working for.
It was that painful experience which made me grateful for what I have, even if its looked down on so much by my peers. I realized how lucky I was to be working at all.
The rosy picture I was referring too wasn't so much the salary as the ability of software engineers to get these jobs. In my experience it was a lot more like a professional sport (spend decades working and practicing in this field and you still don't have what it takes) than finding a store with a help-wanted sign and filling out an application.
I guess there's something of a paradox there... its a weird industry.
Conversely, if you can get hired to a unicorn in a position that's senior enough to have any hope of coming anywhere near top tech pay, then you are likely talented enough to work at top tech instead.
There a variety of companies that pay top dollar for talent, straddling early stage startups all the way through established companies. That doesn't mean it's easy to get those jobs. It does mean that you should apply your talents where it fits.
BTW, you don't need to be at a unicorn to earn top EV. 1% of a 100M exit is 1M, which is more than the vast majority of equity grants I've heard of from FANG. Many people put 0 value on startup equity. Those people decrease their lifetime EV through misconceptions of statistics.
I worked at both. Talent overlap is quite high, far higher than is commonly assumed.
> There a variety of companies that pay top dollar for talent, straddling early stage startups all the way through established companies.
I worked in startups for many years, and most of my friends still in the field are either founders or C-level execs. They are fully aware of the top compensation for top engineers in startups presently. Startups don't match top tech comp currently. Unless you factor in the options as a sure thing, and the startup ends up exiting at unicorn levels.
> Many people put 0 value on startup equity. Those people decrease their lifetime EV through misconceptions of statistics.
This is a reflection of how many people have spent precious years of their career working for startups, and generally seeing 0 return on these options.
It's also a reflection of the perceived lack of control over this sort of deferred compensation, and various nasty dynamics that often snatch value away from rank-and-file employees, even at the last minute or past it. See the LinkedIn exit and their infamous clawback policy.
Startup options have earned this reputation for 0 value over a decade of overhype and underperformance. Far too many talented people were promised the sky and ended up with nothing after years of hard work.
Usually they are able to jump ship sooner than the founder and don't loose any personal investment in the process they get more responsibilities and more independence which in turn can get them to higher salaries faster.
Employees at startup usually get paid a bit less than "market rate" but enjoy a work environment they consider to be more exciting / enriching / challenging. There are people that dislike the startup environment, or that don't think it's worth the pay cut compared to GAFAN or other BigCo - and that's OK - but for many it's not as bad as you frame it.
As far as I can tell, the biggest issue with most early employees is not being able to exercise your stock options— the ones that vest first you can't afford, and by the time the later ones vest, the tax bill would be too great. So if you want to leave before an exit, you're either walking from your options, bank-financing it, cutting some kind of side deal with a VC to finance it, or working out a deal with the board to buy you out over time.
I should of hopped to big co sooner instead, I would of been significantly ahead of my life's savings goals if I did, and possibly would of bought my house at a far cheaper price because I had the money to pay for the down payment.
I can definitely picture that there'd be a high vulnerability to sunk-cost thinking.
The employees that can jump ship quickly are the good performers that also live somewhere with ample opportunity. Those also are rarer than the average Joe Dev.
I'm not saying it's always a really bad dicision to join a VC funded startup. But in the majority of cases, people would probably be better off not to - at least financially. Of course (and luckily) there are more factors than that.
Isn't that where the vast majority of startups are based though?
Especially in tech where there is generally a large community of supporters who are willing to fund the projects they believe in directly.
I think the Green Bay Packers is a perfect example, it’s the only “publicly owned” football team in the NFL and as a result when they need funding for large projects (like stadium renovations) they go straight to their community supporters with “public offerings of Packers stock”...which isn’t really stock at all but a certificate and small voice in corporate governance (ie election of a small number of directors). It’s so successful of a legal structure the NFL publicly takes the position they are at a competitive advantage to the other teams which are owned by billionaires.
There is no reason Startup’s shouldn’t look at the same model and cut out all VCs, incubators, etc...
Community support projects work for Kickstarter or Indiegogo marketing to the general public consumer, that's not the same thing as trying to build a B2B SaaS platform fixing a specific problem marketed at Fortune 500 companies.
How is the Packers model a scam? Because people support it and don’t get profits? Does that make the 90% of VC funded startups that fail scams? Are other NFL teams that are privately owned scams, because as I said the NFL publicly acknowledges the Packers community ownership is a competitive advantage over the other teams.
Sure maybe people won’t directly support your b2b software application marketed at Fortune 500 companies, but as a counter example many of the next fourtune 500 companies could easily adopt a community ownership model in a similar fashion as the Packers (only for profit).
People like community ownership and governance...there are many examples beyond the Packers to establish that. People don’t necessarily like the VC model and having to take money from wealthy people who take a chunk of your company just to compete on a level playing field.
You hear from time to time small to mid sized business that are "employees owned and operated" but that doesn't mean every employee has the same equity, the generally ownership will have the largest stake anyway with employees having very little control or equity compared to ownership
Well there is no equity as there is no equity in any non profit corporation. That doesn’t make nonprofits a scam.
The shareholders elect the board and the board elects the officers and the officers control the day to day operations.
>It's still controlled by a small group of people aka the board of directors, the stock structure is setup that fans could not mount a hostile takeover
Well stockholders do get invited to the annual meeting and vote for a number of those directors.
You can claim all you want investor won’t invest when they can’t get their investment back, but again the Packers are proof you are wrong, no shareholder can recoup their investment much less make a profit, but they have no problem raising as much as $250M when they had their last 2 public offerings.
Edit: another example is the Gates foundation, supporters donate because the believe in the organization (like the Packers) yet supporters have even less rights than the Packers shareholders and obviously no chance of a “hostile takeover” and yet people “invest”/donate.
Of course you can have equity in a non profit. That doesn't mean your entitled to profits that don't exist, it means you have a stake in the organization. And the # of outstanding stocks versus the # of stocks held by the general public is a tiny fraction of what the Packers are worth, but again those silly pieces of paper are not proof of equity or ownership, it's literally memorabilia fans traded cash for a piece of paper that says they own something even though they have no power of ownership, the annual shareholder meeting is for show, so to call it an investment like a traditional stock would be isn't fair, it's really not the same thing.
What you are describing is development office, going out to ask for donations for a cause. That's not the same as running a venture that's going to make profit for shareholders.
The primary downside for startups is the cap table, but there's regulation in the works (already passed the House with near-unanimous bi-partisan support, waiting on the shutdown shitshow so the Senate can vote) to fix that.
Disclosure—I work at Wefunder, both on crowdfunding and very early cohorts (https://xx.team)
Donations are not investments. They're expenses. Investments must have a return of some monetary vale, or else it's an expense.
You’re really acting like an authority on “public offerings”, do you think you know more than the SEC about public offerings and they don’t know what one is? I understand your definition, it’s just not the legal definition is all.
What’s at odds is Packers “Stock” which isn’t “stock” in the common definition and understanding, but it’s still called stock, it’s just not a security or investment.
Have you even seen the Packers Public Offering Document(s) or subscription agreements? Because I’ve never seen a donation/charity issue “public offering documents” or require subscription agreements.
Edit:
>public offering is selling parts of your company for cash, aka a stock, ownership has it's privileges, without those privileges, you aren't selling anything to the public,
You should also really take a look at SEC enforcement actions against ICOs because almost none of them are “stock” nor carry privileges yet are considered public offerings.
What I found hilarious was Jim Clark's original vision of a "trillion dollar healthcare cost disruptor" that was Healtheon, actually IPO'd in '99, but ended up being acquired by the content mill cesspool that is WebMD.
I don't think you're wrong, but I always thought VCs were there to hopefully guide these organizations too. Control, guide, probabbly overlap a lot. But the idea being you get capital, introductions, maybe help finding some people you need?
Granted I don't think you're wrong about the rest of it but control (when you sold yourself...), also guidance are weird venn diagrams. Not sure there is a right or wrong there.
I'm thinking about a Planet Money episode that discusses big-time poker folks, and they frequently trade percentages of their winnings such that if enough people do it, the few big winners are evened out over time.
On the other hand if you didn't go to an Ivy league you can prove yourself at a startup or advance your career faster before transitioning to a bigger company at a better position
If you take a premise that society is better off most of the time if the business is less efficient but the law is obeyed, then it makes the whole concept of modern VC-backed startup businesses generally a destructive endeavor on society.
Obviously not in every individual case, but overall and pretty consistently in the largest growth start-ups.
Pittsburgh has a great tech scene and a pretty good 'stable, 10 years in company' scene. It's got dick all for startups (duolingo yes there are always exceptions) because there's just no VC capital.
IMO we're mostly fine with that. It's certainly a hell of a lot cheaper to live here than San Fran.
You reduce VC earnings by having more VC competition. You increase founder earnings by having more VC competition as well. Also by providing a better environment for success (that VC's provide, like it or not) You increaes employee payout by the number of competing startups for talent-> more VC and more founders better deals for employees.
There are things that tip the scales amongst the players, but its not true employees lose out as a whole: the majority of minted millionaires in this game are employees, not founders. Even more than VC's. VC's meanwhile have not great returns as an entire industry. And in the founders game, most lose out with detrmient to health, status, or family fortunes.
When you take that (significant) compensation away it should make the job much less appealing. I think a lot of younger (by which I mean years of experience in the industry rather than age) talent has forgotten or is not aware that this is why a startup job became the "done thing".
For many, they'd be better served by working at an established company (even temporarily if they have ambitions of their own startup in the future) as the package will be much better, and because the traditional upside of working for a startup largely doesn't exist anymore.
Still significant for someone just starting their career.
For some people, "100% on" environments are the right choice, and entrepreneurial activities are a natural outlet, whether in isolation or with others. For others, traditional careers offering stability and insurance from any threat of rapid change, or even hermit-like isolation may be favorable. Personally I've fluctuated between the former and the latter, and VC has done well by me as an employee. YMMV. Do what excites you.
> What does that mean for startup employees? Well, they got the worst of all worlds. High risk and little to no upside. Their eggs are also in one basket as they work for only one company AND they don't have the huge upsides that VCs and founders have
Presumably both of them get paid for their efforts...not entirely worthless
Are they getting paid enough to account for the risk? A VC will make more money and have less risk (overall). An employee will most likely make not much more than working for an established company and have a high chance of losing his job within a few years.
Chances are low you will be there or your job will in 5 years
There’s no difference in the risk of a founder and employee 1. They’re both out of a job and perhaps underpaid at first.
If you're not the capitalist then you're probably the capital.
VCs were able to control the startups they invested in to a pretty big degree.
What does that mean for founders? It means that you are putting all your eggs into one basket. A founder does not found 20 startups at the same time in the hope that one succeeds. A founder puts his effort usually into only one. So founders take a larger risk than VCs. They make it big or go bust. And the vast majority goes bust when running in supercharged mode.
What does that mean for startup employees? Well, they got the worst of all worlds. High risk and little to no upside. Their eggs are also in one basket as they work for only one company AND they don't have the huge upsides that VCs and founders have.
The whole game favors only VCs and founders who like big bets. But for the vast majority of people (which includes employees), the VC game is not a great game to play.