Comment by fatnoah
6 years ago
>The reason why is the math changed.
Very true. Making it even more unbalanced is that a startup exit may not be profitable to non-founders. I spent the first 17 years of my career at 3 different startups. Two were acquired and one is still chugging as a lifestyle business for the founder. The net value of my options (> 1% even after dilution in two of them) amounted to a $2000 capital loss due to there being no money left over after debt and liquidation preferences. I did get $350k payout for one of them since I was an executive.
I recently started at a FANG, where the new grads make cash and stock comparable with my startup exec compensation and it won't take long for them to eclipse it. I'll be making multiples of my previous compensation.
That said, I wouldn't change my path one bit. I learned so much in those startups that I wouldn't have learned anywhere else. I had a level of scope and responsibility that apply to nearly any tech job. It also lets me appreciate the benefits and stability of a large company. When I joined those companies, I was also not even thinking about making bank on an exit. I just wanted to work with nice people and build cool stuff.
I think this is a really good argument as why graduated corporate taxes really need to be increased in the US. I'd be curious how productive you felt at each position and if you think the FAANG job is more difficult and stressful.
I'd like to think that no matter which of these paths we chose - the more stressful and risky life or the more secure and corporate FAANG one - we'd all have a chance to live a decent life. I really enjoy working at a small company and we make a notable impact on society, but the money will never approach FAANG levels.
I really think the issue is that many startups don't offer alternative compensation and don't play to their strengths. You can be compensated in other ways, but often I've found much of the work at startups can be no more interesting than their Big N counterparts. Your career growth might also be similar. In theory, for startups, you sacrifice pay for other facets. The reality is quite different.
The work might be similar but you're paid 50-75% of your peers. That was my experience in startup land, at least. Few good challenges or career growth and half of what I felt like I was worth.
I think the benefit of working at startups is similar to the benefit of working for smaller companies in general. With a small team you'll get to touch more of the stack, and maybe even parts outside of your job domain altogether. In my first job I was the 2nd developer, the first was the CIO. In addition to writing most of the code for this project, I set up the entire production network including load balancers, database replication, firewalls, etc. I even picked out our hardware and physically installed it in the rack we rented at a local ATT data center. Now that's an extreme case obviously, but you will never get anything close to that broad of a base of experience working for a BigCo.
I’m intrigued by your idea of alternative compensation. Care to expand?
Are you thinking like bonuses for growth? Deferred bonuses?
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> I'd be curious how productive you felt at each position
I definitely felt "more productive" at startups since my work felt like it had a bigger impact to the company.
> and if you think the FAANG job is more difficult and stressful.
So far, it feels no more difficult and is stressful in a different way. With a startup, there's the stress of worrying about the company going under. At the FAANG, there's the stress of performing at a high enough level to justify the compensation.
I think you need to reform employee stock options - in the UK there are far less possibilities to screw employees over stock options.
Absolutely, stock options in the US are super strange, they can be performance tied and for non-qualified shares. The thing I'd actually like to see is a better default governance for companies - companies are wholly owned by founders and I think there is just something fundamentally wrong with treating all employees as contractors by default until it's decided to grant them options or actual ownership.
A bunch of people gather together and build a thing - why is the first person to the table the person who takes home all the profit? Sure employees are technically signing away their rights by agreeing to work without being compensated with a portion of their work, but it'd be really hard to actually pursue proportional ownership in the current labour market.
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No it’s a good argument for eliminating corporate tax- no matter what the level it hits entrepreneurs the hardest.
This. In my experience, the burden of taxes and regulations are most felt by new entrepreneurs and smaller organizations.
I'm interested in your transition, how did you go about the move from Startup Exec to working in a FANG?
The startup I was an exec at was acquired by a large (>$100B market cap) company. Going through that process and adjusting to life as a much smaller cog in a much bigger wheel was definitely educational. I was no longer "the boss" and had to work very closely with people that I had no authority over, possibly had different goals than me, and who were thousands of miles away. The startup skills of being lean, problem solving, leading people, etc. still applied, but building the skills to work in a bigger company environment was very important. Going through that experience definitely helps with my life here at a FAANG.