Hello all! Im genuinely interested to hear your thoughts and strategies here. The focus of this discussion is maximizing networth, not necessarily TC or job benefits, etc. So, from your perspective (talking only networth maximization), why don't more people have the strategy to work at a company with high TC (FAANG+), become an accredited investor, and then invest in SEVERAL start-ups at once? There are several pre-ipo investment companies, like EquityZen, that help reduce the per investment costs of a startup to 10-20k vs 100k. From my rationale, Netflix would be the best place to work due to their awesome cash-heavy TC package. This would allow you to invest in any start-ups that you think will become unicorns. #amazon #google #netflix #investments #tech #startup #tc $345k TC
"Investing" in startups is like "investing" in power ball tickets. Hell, the expected value might actually be lower.
exactly so why work for one when you could 'diversify' into several to hopefully hit one unicorn?
Sometimes the work at fang is boring and stagnating
You're right. Be a stakeholder instead of a laborer. Faang allows you to he a highly paid laborer which gives you enough money to also become a stakeholder
Why you work at amazon when you can work at Google ? Same reason people work in different companies
Lower ROI. Shares are more expensive.
You can't invest in the companies you want to
You know you can sell your RSUs as soon as they vest right (initial cliff is like 3 months)? Netflix isnβt any better than other places with similar TC.
Assuming you're far enough along in your career to be an accredited investor with enough cash to support a portfolio of startup investments, the biggest problem is probably deal flow. The hot startups frequently have oversubscribed rounds. No one's going to take your $25k check seriously in a Series B where they're trying to raise $50m from venture funds unless you have a relationship and they're really cutting you in as a favor. So you're probably limited mostly to seed and preseed rounds. But even then quality deal flow is hard. The best companies coming out of YC have probably already closed their seed round before demo day. So you need a strong network bringing you quality deals, and you need to have the wherewithal to sort out who will be a high quality startup at the ultra early stage. Taking a job gives you a lot more options in terms of where you can get equity. You can get equity at a company that just started or is about to IPO or anywhere in between. It also doesn't require you to risk existing capital, which could be making good returns in the public markets. You're risking your money either way. Either you risk your future earnings (your startup equity being worth nothing vs the "guaranteed" faang equity you could've had) or you risk your current capital in the exact same gamble.
this is one of the best replies, great points and insight!
Why not both? Invest in pre-ipos and choose a highly convicted unicorn and join them even in late stage. You already know companies that will ipo more or less. It is not power ball ticket anymore especially with the advent of SPACs unless you are investing in pre series or series a, b, c companies.
As someone who's actually done this and also had 2 companies ipo, I would not recommend it. You don't get the deal access you want. And this ends up being much riskier than you're thinking. You're severely underestimating illiquidity risk and golden handcuffs
Could you please elaborate? I understand the illiquidity part but I am not sure how does that matter when you join a company that IPOs within a year - this is what I meant by late stage. I also don't understand the deal flow part - do you mean on platforms like forge deal flow is not great?
Do what kind of work appeals to you most. Take risks, work hard, and move around a lot. Invest as much as you can. Keep doing that and you'll gain more clarity on what you want