Assume that the VCs are top class and the founders are very experienced (very senior positions at large tech co at the level of PayPal, Twitter etc) and the company has raised a Series A currently with a prototype. Assume I get 0.3% equity as an engineer and a standard base salary (~150s). Assume my payout after 4 years of vesting but only after 8 years or so accounting for time it takes to IPO is 250k-400k per year from equity (assuming we even succeed). 3 yoe How does this compare with working at a Lyft/Facebook/Uber/Google? My guess is that the comp in big cos would be comparable esp if it's liquid sooner. My read : Pros of working at a startup : growth opportunities, connections, better use of my time, fast paced. Cons: it'll be a lot of work and risk for relatively little gain financially. What do you guys think?
"With a prototype" implies to me that there is no clear sense of product market fit yet. Even very experienced tech people can and do screw up. If it seems obvious that the product will get traction, then this might be a good risk. But there is nothing more frustrating than a well funded startup that doesn't have a product generating real revenues yet. Like you said, a lot of risk with pretty small upside if your numbers are accurate.
True that. I hate vcs who pour money into startups out of fomo, leaving employees taking more risk at higher valuations
I'd say you should consider startup stocks strictly as paper with a chance of a fairy showing up and turning them into money. It would make it more realistic wrt expectations. (I went through 3 startups: Post-C, Post-A and as a founding engineer).
Was it worth it work at all those start ups? Or more of a career set back?
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Don’t !!! Only founders and Vcs make money - you will get to slog !!
Joining an early stage was pretty cool. Founding was infinitely better. Opened doors I never knew existed, introduced me to people I’d never otherwise have met, and gave me an incredible education. Worth it even without a payout. I’d never join an early stage again without being a cofounder.
💯
No if you’re going in strictly for financial reasons. The experience may be worth it though if you’re just starting out in the industry.
Financial and growth related reasons. If I can become a manager within 2-3 years, that'd be cool and should sweeten the deal
Financially, it depends on what percent of the company you get, the potential company size if everything goes well, the odds of successful outcome (are the founders experienced? Is there product-market fit?), and your personal risk tolerance. Other than that, working at a startup means doing more things and learning a lot, some people prefer it, others prefer to focus on one tech.
What is a good median ballpark for per annum earnings in the top cos (fb, Google, Lyft etc) for 3 yoe? Is 250-300k per year a reasonable estimate?
I dont agree I made few millions from my previous companies ipo... I joined it as a fresher
Really cool. What stage and % equity did you have?
I have made 2.8M, 200k and 0 from equity in three startups. ☺ If you weight between them, its an average of 1M each. Several years of life into each though. A sure thing of 400k-500k with growth to 1M+ is a better thing these days for an old fart like me though. If you are a kid, maybe your math looks different.
But I think it's different. Most of the early stars are going nowhere. Joining before IPO is actually not a bad idea.
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In my experience unless you're a founder it's almost never worth the risk and time investment. Mostly because the majority of the work will be on your shoulders but not a commensurate reward. If you really believe in the product and you own a significant stake in the company then do it. Otherwise hard pass
Define significant stake
A founders position stake