Career Question: Startup or FAANG

Feb 16, 2021 26 Comments

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.

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TOP 26 Comments
  • Airbnb
    v58d8y

    Go to company page Airbnb

    v58d8y
    What's you nw? Do you own a house etc? Spouse income?
    Feb 16, 2021 4
    • Thanks! 🙏. The plan is if I go in I make sure there is a closure. Does the equity and salary make sense?
      Feb 16, 2021
    • Airbnb
      v58d8y

      Go to company page Airbnb

      v58d8y
      Yeah equity is pretty good. I heard 1% for founding engineers. It is a bit of red flag for me that it's this high but maybe the starting valuation is lower.
      Feb 16, 2021
  • Apple
    kahjillion

    Go to company page Apple

    kahjillion
    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
    Feb 16, 2021 1
  • 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.
    Feb 16, 2021 1
  • eBay
    eBay area

    Go to company page eBay

    eBay area
    go for it only if your spouse says so
    Feb 16, 2021 0
  • NIO
    GraySky

    Go to company page NIO

    GraySky
    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.
    Feb 16, 2021 3
    • 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.
      Feb 16, 2021
    • Apple
      kahjillion

      Go to company page Apple

      kahjillion
      Ah that makes a lot more sense lol
      Feb 16, 2021