Comment by KoftaBob
6 years ago
Startups paying better than tech giants seems counter intuitive to me.
The giants can pay high salaries because they're hugely profitable and don't need to worry about being hyper efficient to make the most of VC money.
Startups on the other hand, are still weak on the profitability part, but have massive room for growth when it comes to valuation. Therefore, the equity they can offer has way more potential value than stock in a large company that's averaging 5% growth or something.
I don't see how a founder of a startup would benefit much from cheaping out on salaries for employees. The vast majority of the payout for founders is company value increasing, not how much of the VC money they keep.
Founders are not even giving enough equity for employees to match the income they lose not working for big tech. Its common to still make less on equity + salary after a successful exit compared to the yearly total compensation at big tech.
Fair point. However another selling point of working at a startup vs a big company is the impact you get to have on a product. Being able to say you were one of 5 people that built out a core feature of Uber in its early days is immensely valuable for career trajectory.
Once a company is large, it's hard to have that level of impact until you're a director/vp/etc.
Google makes so much money that it makes sense to overpay? I mean that keeps people from leaving and starting their own thing that might be competition to Google. Plus give them the resources inside Google and they might build something there.