Google or tiny startup?

Jan 6 31 Comments

If you had an option to stay at Google at 300k or seed startup at 100k what makes more sense?

Is the potential success of startup worth it or is it usually never worth it. Start up is funded by Khosla Ventures, which I know is decently big but being new don't know how prestigious they are.

Thanks,

Ask me more questions for detail, I'm pretty new to this.

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TOP 31 Comments
  • Google / Eng FhAJ18
    Why are you interested in the startup? The mention of TC in your post suggests that you're trying to optimize financially - in which case you should steer very, very far away from just about any startup

    A startup is good for many things - you can be much more closely attached to a product, you can operate at a more senior level than your YoE would suggest, and you can dabble in many fields at once, but unless you are joining at the cofounder level they will - even in very optimistic scenarios - not pay.

    Others have mentioned dilution which is just scratching the surface - look into liquidation preferences and ratchets. In short, the way VC-funded startups have things structured the VCs will always, always get first, often at multiples exceeding actual valuation appreciation. Even a successful startup frequently pays little to nothing to line employees due to investors absorbing the bulk of any actual gains. Remember, as a line employee you are *last* in line to get paid even when the startup succeeds.
    Jan 6 2
    • Snapchat / Eng Fabby Mike
      I can confirm you get paid last as an employee when it liquidates too. You might even not get paid anything.
      Jan 6
    • Google / Eng FhAJ18
      Yeah. The common narrative of "startups don't pay because so many fail" is not even the full story. It's more "startups don't pay (for line employees) even if they are wild successes"

      Also to OP: another problem is if you can actually hold out for the equity to be useful. Most startup options contracts expire 90 days after you leave the job - so unless you stay glued to this company for the N years it takes to exit, you are likely walking away with zero equity anyway, since the odds of you leaving before the exit is... High.

      If you want to optimize for earnings, negotiate really high FAANG offers and ride the wave.
      Jan 6
  • Snapchat / Eng Fabby Mike
    Since you don't sound sure about the startup, I say go with G.
    Jan 6 3
    • Snapchat / Eng Fabby Mike
      Most startups fail. Unless you REALLY believe in it and you really know and click with the people, you should avoid it. First hand experience.
      Jan 6
    • Amazon vriP37
      OP
      Thanks Mike, it's always better to hear more of these stories vs fantasizing off of one off experience you hear.
      Jan 6
  • Northwestern Mutual nm_eng
    You should do it. Free up more FAANG jobs for the rest of us who appreciate them.
    Jan 6 1
    • Amazon vriP37
      OP
      Lolol great comment. Hmmm this is making me consider it.
      Jan 6
  • FormFactor Tove1
    Higher risk, higher reward
    Jan 6 6
    • Facebook / Eng SFENG
      90% fail, most within 5 years, and SaaS takes 9 years to exit. Most of my friends who joined successful startups mid-way couldn’t retire on the exit. With risk adjusted expected value it is hard to beat FAANG.

      That being said, you can have lots more fun and grow your skills much faster at startups. Just be prepared for the downs that come with those ups.

      Depends on what you are optimizing for.
      Jan 6
    • Amazon vriP37
      OP
      Thanks Tove1. Yeah already have A and G on resume but honestly the struggle is like anyone else. When comparing myself to folks on top everything looks like a long road ahead. Maybe I need to be more grateful.

      SFENG, yeah I feel like my current job is too predictable and not enough learning right now. I think you're right... Risk adjusted I'm doing like 7 year calculation and I'm like garuenteed money vs potential... Man this doesn't look like rainbows and butterflies.
      Jan 6
  • LinkedIn U💰S💰D
    100K + how much equity? People who work for seed stage startups probably do it for the equity.
    Jan 6 3
    • LinkedIn U💰S💰D
      Be extremely careful on the equity contract. You don’t want them to dilute your ‘percentages’ into ‘ten-thousandths’
      Jan 6
    • Amazon vriP37
      OP
      Thanks for letting me know, still learning need to be reminded of potential dilution.
      Jan 6
  • Amazon not_mossad
    Find out how much equity you will get, then factor in future dilution from subsequent funding rounds. Then do a bull/base/bear case for valuation of company at exit (probably assume 0 for bear case). Apply probabilities to those cases and do a weighted average of the valuation, times your future diluted equity stake.

    If it looks good and you are fine with 1/3rd TC for the foreseeable future, and you are fine with the risk, go for it. Otherwise, stay
    Jan 6 2
    • Amazon vriP37
      OP
      Thank you for a very good answer about how I should think about this. Gotta pull out my good old basic finance calculation. How do you know how much is going to be diluted?
      Jan 6
    • Amazon not_mossad
      Really depends on the stage of the company/current valuation/how much they plan to or will raise in the future.
      Jan 6
  • “Potential success” will always be “potential” and you’ll never get the payoff.
    Jan 6 1
    • Amazon vriP37
      OP
      Folks has been telling me this... They are saying dude you got a good job stay, you will never become a millionaire joining seed startup and will fail.
      Jan 6
  • Snapchat / Eng Fabby Mike
    OP, I think you should give more info about the startup if you want a nontrivial answer.
    Jan 6 0
  • Bloomberg GO<GO>
    How is this even a question?! I thought it's common knowledge that 19/20 startups fail without being acquired or going public.
    Jan 6 2
    • Amazon vriP37
      OP
      Is it really that obvious? Sorry... Maybe I was being too biased on the hope that these will succeed. How much does the founding team matter?

      For example our chief strategy office was the CPO at Netflix for 12 years, is this all kind of marketing bs where they could leave without risk but for someone like me it's literally red flags?
      Jan 7
    • Bloomberg GO<GO>
      Founders from brand name schools/companies increase a startup's probability of success, but it probably remains less than 1/5 even in that case.

      Don't sign any offer letter that doesn't specify the strike price of your options. And definitely read up on liquidity preference. It ensures that investors and founders are the first to cash out their shares. Employees often get nothing even if the company is acquired, if there is not enough money left after investors recover their investment and founders sell their stake (as happened with my last company).
      Jan 7
  • Capital One gully
    If you’re asking this question, don’t go. You’re thinking about money as a driver. You join a startup not for money but for growth (learn business, meeting people) usually at loss of some earnings.
    Jan 6 0

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