Career Question: Startup or FAANG
I am currently working in one of the FAANG’s with a TC ~525+. So far it’s going pretty well from career perspective and I am expecting a level bump by 2022. I have been approached by founders of a startup to join them as their first employee with ~170K salary and 5% equity. These founder have over 1B dollars in exits and are well known ( sorry, can not reveal names). I am pretty bullish about the startup. I have never made the kind of money I am making now but at the same time I might not get an opportunity to build a startup with established founders from the ground up. I am reaching out to the blind community for advice as I am unable to decide what to do! TC: ~525K Future TC (170K + 5% of X ) Edit: additional context: Family with a Kid , working spouse, mid 30’s. Citizen if it matters.
go for it only if your spouse says so
What's you nw? Do you own a house etc? Spouse income?
I own a house I have less than 200K left on it so almost paid off. Spouse TC ~270
Go for the startup. Make some equity and leave in a couple of years. You probably don't need lot of liquid income right now.
Are you a SWE or PM? I'd say if you have enough saved and invested such that you could float for a few months if the startup doesn't pan out while you interview for a job back in the industry, then go for it. You seem passionate about what this startup could become. Join up and help drive them to success.
I am a SWE. I have a working wife and we can survive ( albeit not lavishly) on her income.
I suspect you already know what you should do already, follow your intuition it is your best advisor. If you have a a goal in life that scares you and excites you at the same time then you are on to something. The question you should ask yourself about the decision you are about to make either way, “is this something you want to sacrifice a chunk of of your life (time) perusing? “
I do not actually. It’s bimodal , I feel at times to jump and make a difference and then at times I should stay on course to minimize risk. While I do not hate making more money, I am happy with what we make to live a very comfortable life. But then there is this urge to nit take the proven path and do something big. And this might be that opportunity to learn the chops from people who have been there and done that!
Go for it, you won't get such chances time and again. You can anytime move back to faang/high TC jobs.
Go for it. The odds are stacked in your favor. Prior exits(1B+) mean a very smooth flow for funding in the future. Doesn’t guarantee success but a lot of head banging moments are smoothened out. Do ask around about the founders though. Also make sure that you know it might take 5+ years to see any ROI.
Thanks! The founders are credible and I did a soft background check on them from people we have in common. I do not think funding will be a problem unless they screw up.
Go for it. I missed a chance for being a co founder of a YC backend startup 2 years back. Was certain about the success but had personal commitments due to which I couldn’t make the switch. If your gut tells you to take the plunge, take it. Go in with at least 3 years of heads-down push-mode mindset. Re-evaluate if your chance of success then are bleak And you can always get a job.
You'll probably have a 95% failure rate at the startup. With that said, you should go for it because it seems like you and your family don't really need the TC and can afford to absorb the 95% failure rate for a chance at huge once-in-a-lifetime payoff.
5% is standard 1st engineer offer for a startup. Let me give you a real world example. I was offered the same percentage of ownership for SignalFx in 2013. SignalFx was acquired by Splunk in $1B in 2019. In hindsight, would the offer have been a better deal vs working at FAANG in the same period. Once you take into account dilution and paying off preferred stockholders 1st, it wasn't. Hence, join the startup if you believe in their vision and founders 1st and for a massive payout 2nd. Most startups don't exit, some startups exit, even fewer exit at $1B and even then the payoff is not that awesome - something to keep in mind.
Am i doing the math wrong? 5% of 1B is 50M. Say you take off half for tax. Are you saying dilution and paying preferred holders cost that much such that you made more from faang in 5 years?
I think your calculation is incorrect . You buy options as first engineer and file 83b that reduces your tax liability. SignalFx raised 175M. 65M of it came in their E round. With 70% dilution across multiple rounds, You would have made 10-15M unless they did something shady. Pretty cool payoff for 6 years. The calculation does not include any salary. If we consider more dilution, you will still end up with 5M -7.5M unless they did something shady. Which is still cool for 6year of work. I am not including additional options or grants that you might get after you warp up 4 years. Also the calculation above does not include base salary. Usually startups pay market post series B.
faang
If the premise of this post is true lol, it’d depend on a lot of factors such as age, family, financial situation, and career aspirations among other things. If you are relatively younger, don’t have a growing family, are financially stable, and want to progress more into management, I’d go for the startup
Premise is true :) would not have posted otherwise..