Unless you’re a founder, I actively steer colleagues away from working at a startup. The sense of accomplishment, impact, or whatever the feel good term is, isn’t worth shorting yourself on significant comp for years (while founders and funds are getting almost all the upside).

Edit: If you want to compete, pay more and provide more equity with less risk. Throw “hire fast, fire fast” out the door; anyone who isn’t single and in their 20s can’t rely on a job like that. Maybe consider giving preferred shares to early employees as well, so they share in early liquidity events during pre-IPO/acquisition offerings.

At my company we have a great selection of healthcare that's fairly affordable both for employees and the company. I think it's as good or better than any packages I've seen from big brand-name enterprises. However, as a European founder, I was shocked by the complexity and effort that went into the comparison shopping necessary to get anything other than expensive, poor coverage. The quality of what's out there from JustWorks, Gusto, Zenefits et al was frankly shocking - and they are feted as "making it all easy and affordable". (We use Trinet which although in many ways antediluvian has very, very good health options at least for NY).

It's a barrier to anyone with nearly any disability, chronic illness, or precondition (or with family members who may have them).

A friend's wife has to take medication that is classed as Tier 4 in California (least coverage). He has had to turn down many offers as he would then have to put the family on their own insurance, potentially costing upwards of $1200/mo. just for the one set of medications. As is, the meds are <$10/mo. on the insurance via their current employer.

US Healthcare is a giant hurdle for small businesses. We need UHC in the US.

Be careful about those who offer you emotional fulfillment or purpose in your job. There’s always a cost.

Having startups be more remote-friendly by default would be a huge boon for everyone involved.

One of the risks of remote work is the next opportunity. What happens if you land a great remote job, move your family across the country, and then realize the new job/boss/company is not a great fit? Right now, it can be a challenge to find a comparable position offering full time remote flexibility. But if all startups offered full time remote, then the network effect occurs, leading more candidates to want this option and opening up a larger pool of qualified applicants for startup companies to work with.

If YC could facilitate this industry trend, you could be helping startups with talent acquisition, helping workers establish better lives in lower cost locales, helping to spread tech talent and opportunities around the country, and helping the Bay Area (and other highly impacted tech hubs) ease some of the housing and transportation issues. If this is a successful startup trend, I guarantee the big tech companies will follow.

While hiring remote makes sense for startups, working for a startup might not be the best option for remote workers.

Plenty of money floating around. Find another remote friendly guy and go to town!

Seems how most remote friendly places have started...

Not to say you get fired, but you miss too much. You miss watercooler talk. You miss the invite to a new project. You get sent maintenance and bug work.

If you want to work a 9-3 and coast, sure. If you want to do cool stuff and move up the chain? Being remote in a local company is totally suicide.

I’ll admit I would not choose to join one if they were to force me to live in SF and not give me a competitive salary.

Startups are really good at providing two things - a sense of being able to affect change and working on something novel/new (assuming you actually go with a startup that does something new)

Unless you are a founder, go with the money.

Better Estimated Value.

Most startups are not competing for talent that would otherwise be making $400k.

From my experience, Google/FB pay much more than Amazon and Microsoft if we're talking about total compensation so I think it's a little more rare than what you're saying.

I don't think it's that easy to hit L5 either. My teammate is amazing and had like 8+ years at Microsoft before joining Google but was hired as an L4.

For most SWEs, L5 would be the last level they ever reach in their entire career..

Actually my salary was very similar at Amazon when compared with Google and my friends have similar salaries. The problem with Amazon is that their vesting schedule is very heavily weighted towards the 3rd and fourth year.

It's true that if you stay the entire time, that might work to your benefit since by that time the stock value may have increased greatly, but I'm not sure how much that should count since you could in theory just sell your RSUs and buy Amazon stocks if you wanted to.

My experience is that total comp at Google is much higher than Amazon but again this may be anecdotal?

I have interviewed on two separate occasions by Amazon, and only contacted by Microsoft (submitted some forms, but they never called me back). Both times, it was from an internal recruiter making first contact with me. But when I try to reach out to them first (applications or LinkedIn), nobody answers.

Are these FAANG companies usually recruiting candidates on the basis of "don't contact us, we'll decide if we want to contact you"? Other than knowing an acquaintance that works in the company I see no other way to get into an interview more quickly.

My best advice is find someone who can submit your resume as an internal referral. Those carry a lot more weight (at least where I work). However, make sure that person is someone you know and is comfortable “vouching” for you. These referrals are looked at more favorably since the thinking is that it’s somewhat of a known quantity.

Other than knowing an acquaintance that works in the company I see no other way to get into an interview more quickly. You should certainly cultivate an internal advocate. In no circumstance will that be worse than applying cold; it will often be better.

Go to Google and search "python list comprehension" in a bunch of different tabs. Make sure it's exactly that. If you have an extra 's', or if you do "list comprehension python", it's not gonna work.

If you go through the first 3 levels, then they'll ask you to send in a resume.

Admittedly, I only know results from the perspective of students, but I know several people who were initially rejected that got callbacks after finishing Foobar.

Anyway, I did that search in 20 tabs and didn't get anything.

https://imgur.com/a/XMt7PAq

I wouldn't worry too much about getting into them though. SE's are in high demand across the Valley; expand your horizons and interview with some of the late stage startups and other SE companies as well (e.g. Atlassian). They will provide amazing compensation as well as being a smaller company where you can have a bigger impact. Once you build a few years of experience delivering products, your problem will be rejecting 99% of the recruiters that reach out to you lol.

Seriously as a CS student, you really just have to get a job where you can learn and write actual code and watch your career soar.

If you are on a team of n<10 responsible for keeping a company/product alive you tend to learn a lot more than if you're on a team of n>1000.

Yep, say hello to startups who go cheap by outsourcing to developers who are not as good in their craft or don't care about learning more.

And like someone else said, first level managers are more like 250-350k range, not 400k, yes even at G and FB.

Uber and Airbnb don't pay that much either. Sorry I don't count paper money as real money.

None of the companies in top tier tech can afford to pay substantially less than any of its competitors. That's why they're "top tech".

If what you said was true, and FB or Google paid a lot more than say MSFT or AMZN, then all the best senior engineers would eventually leave the latter for the former, and only the bottom talent will retain. Then the latter won't be top tech in any meaningful sense.

In reality, FAANG are grouped together because they pay about the same and can compete with each other for the same level of talent. Other companies are in this category, just not as famous.

My total compensation went up by ~80% going from MSFT to FB (but my housing costs 3x in the Bay Area vs what I had in Boston so it’s not as large an increase as it sounds).

Even in Seattle it's well known that FB pays more than MSFT. So your theory about top tech needing to pay top dollar etc, doesn't hold.

> There are only a handful of companies that pay $400k/yr for senior software engineers and MSFT ain't one of them

This claim is false.

There are a lot more than "a handful" of companies paying $400k for senior engineers. MSFT will also pay you this amount in the Bay.

Overall, top tech pay about the same. You say FB pays better than MS in Seattle, and perhaps that is the case (as I stated above, I'm mostly familiar with the Bay, not so much with Seattle). In the Bay, the pay is very similar. There could be many reasons why FB would pay more than MSFT in the Seattle: for example, MSFT has a huge office there, and FB probably only a small one. So it's a pretty wise strategy for FB to offer larger pay for the small amount of positions they have there, and in this manner poach some of the best talent in Seattle, while for MSFT it would be prohibitively expensive to raise salaries across the board at Redmond.

That still doesn't change the big picture, which is that top tech pay is largely equivalent, outside of a few anomalies here and there.

No, they do not. Again, obviously you have never worked at a FANG company otherwise you would probably realize this. It's quite a well known fact in the Valley that FB/Google pay much better than MSFT/AMZN.

FYI, I got offers from FANG companies, specifically the ones you mentioned. There used to be a gap, but on the last round the AMZN numbers were effectively the same as Google's. My guess is that over the last few years they faced the necessity to pay equally.

I have friends working at MSFT in the Bay and their current pay also falls in line with the numbers mentioned in this thread. Of course, they're senior engineers.

I think you are quite the bitter one trying to refute every single one of my comments.

(Or at least that's the official line. I haven't examined any de facto pre-tax pay disparities between the two locations. But at least they don't adjust comp when one transfers between those locations, or between either of them and NYC; whereas they do for relos those areas and significantly cheaper areas.)

Source: personal memories of policies from 3-5 years ago, which could have changed but probably haven't.

Also, Uber and Airbnb gives RSUs which are not paper money. I am confident that an IPO for both these companies are inevitable.

Everybody has a different assessment of how likely each outcome is, so everybody has a different expected value.

Course, with the average house going for $1 million in Kirkland, they have to spend it.

That does not necessarily correlate with salary. At least it doesn't outside of SV.

If I'm making a $1M profit on you, I'll be willing to pay you up to a high fraction of this amount if I have to. Financially, even if I pay you $950K, I'm still making money. Assuming my business scales, I'd hire as many engineers like you as possible, and pay them the same. Why not? I'm making a profit for each one. Great deal for me.

Of course, if you're willing to work for $100k, I'd rather pay you that instead. Hell, I'd rather you worked for me for free!

Where does the money come for dividends, taxes, and overhead?

If there is enough supply of engineers at the same quality, no one will pay more.

Although I don't regret the time I spent outside of SV, from a financial perspective as a single young engineer, it absolutely, 100% makes financial sense to consider opportunities in SF that compensate you so well.

In my case, SV is so different that it actually made me want to leave. Personally, I can't recommend SV to anyone if monetary wealth isn't the only goal.

Furthermore, the headcounts of the really big companies, particularly Amazon and Microsoft, are inflated by non-engineers. Citing them doesn't really say much.

[1] https://en.m.wikipedia.org/wiki/Software_engineering_demogra...

This in some case makes a huge difference, especially now, where all the tech stocks have gone to the moon.

I believe that a lot of 400k$ packages would actually be no more than 250k$ if calculated correctly

You could have invested in the same stock and receive the same upside also. This is part of the luck in being in the right company or pick the right stock. That's why Total comp should be the number you got with the information you got at the time of the offer

Base salary will be around 200K, and bonus would be another 200K. Can easily be 50-100K more than that on some years.

Outlier would be 750K or more, which means the engineer is one of the most valuable members of the team.

I'm pulling these numbers from direct contact with recruiters in these companies, and in some cases job offers.

Incidentally, there's an anonymous reply from a Facebook engineer under one of my other comments in this thread. His total compensation last year was $450k.

I never claimed that median engineer is making $400k. This entire thread is about the senior engineers and their payout after 4-5 of working at a company like FB vs at a startup.

If you could do good work as an engineer at a startup for 4-5 years, pulling $400k at FB is very realistic for you. With the median being $240k, it's not going to be a whole lot less.

I'm not sure why you're trying to prove me wrong, but let's face facts: even that absolute median of $240k that includes non-engineers is better than what most engineers would pull at a startup.

Bottom line: if you can stick it out as a senior engineer at a startup for the 4-5 years it takes your options to vest, then you can realistically pull $400k/yr at FB. Except at the startup, you'd make maybe $180k base, and your "bonus" would be your bottom-preference 0.01% equity that would almost certainly be worth 0.

I think there has been a common disbelief among many commenters on this forum about engineers making that high compensation. There really isn't any upside to trying to convince others of this reality. Its easier to mock you here than to face the facts that many are losing quite a lot in opportunity cost by not working in SV. So its natural you will face a lot of animosity here.

Are you talking software engineers? Software engineers in the Bay Area? Software engineers in the Bay Area working for a subset of companies?

I suspect the reason this 'debate' exists is that we are not specific enough with our language to make our meanings clear to one another. :)

To me it's difficult to tell whether the commenters here are disagreeing over the objective reality of compensation distributions or the subjective reality of what counts as 'normal'.

Yes, to be clear that's what this argument was predicated on. Someone said "A significant percentage of SWEs at FANG style companies take home more than 400K per year" and other people said "I don't believe you.

No one ever said "A significant portion of all swes everywhere make more than 400K." That would indeed be a silly statement.

Specifically, this was the statement that started this thread:

>400k is not unusual for a senior engineer working at big tech for several years in the Bay, Seattle, NYC, or even a city like LA

That statement is objectively true for practically any reasonable definitions of "not unusual".

What evidence do you have to the contrary?

Compensation data isn't typically shared openly. Well-paid engineers have no reason to share their pay figures and create animosity or worse problems.

I'm trying to learn the truth. The previous commenter made claims about the distribution of comp. No doubt they had reasons for believing that claim. I want to know their reasons so I can update my own beliefs.

I have made no claims so I don't understand why you are asking me for the answer. I'm trying to learn the answer! :)

There are also past threads on reddit and hacker news which include anecdata that points to such compensation being reasonably common, but again that requires believing anonymous internet people.

The thing is, part of my job lets me see some outlier salary data for AI jobs and uh, I see the extreme right end of the salaried with-benefits spectrum hit a base cash comp around $300 with bonuses to $400.

Now, if we're talking, "With stock, benefits and maximum bonus included" then yes, $400k is high end but not absurd. And if you're talking a lot of work as a contractor I'd expect more.

Because if not you're RSU grant is grossly low (since I'm an L3 who isn't fully refreshed and if my grant quadrupled, I'd be nearing 400K, and my grant isn't exceptionally high).

There's more l3 & l4 employees that. L5. And way less l6/l7 than l5.

Also Uber and Airbnb don't offer liquid rsu. Nobody knows their ipo price and ipo valuation.

https://www.teamblind.com/article/Breakdown-of-compensation-...

Do bear in mind that it takes almost 10 years of steady relevant experience to get to that level (L5+). As another commenter points out, 8 years of solid experince only made an L4.

- top tech company (i.e. FAANG)

- high growth, public, mid-sized tech company (e.g. top enterprise cloud companies)

Your base salary will be between maybe $130K - $160K. And not just for engineers, technical product/program/project managers make this as well. Your bonus will be 15-20% of your base, so another $20-30K, bringing your total comp minus RSUs to $150-200K. Your first RSU grant will prob be worth $100K per year once you start vesting. If you are a top 20% performer, you will get another grant within the next year or two.

After you've been at the company for three or so years, you will have multiple RSU grants starting to vest. Once you stack these RSU grants on top of each other, your total comp can easily reach $400K for some period of time.

A couple of caveats/risks with this comp structure

- it seems companies are much more willing to throw more RSU's at you than a significant base salary increase.

- as long as the markets are rewarding growth vs profitability, the RSU's will continue to flow

- if the market crashes, the whole comp structure may crumble.

Someone coming in straight from college can realistically expect L5 in 6-8 years. Back in the day, you used to get basically kicked out if it took longer than that.

Even coming in as an L4, you can plausibly expect L5 in 2-3 years.

But why not?

Obviously you shouldn't only hire $400k-TC engineers. But if you're going to hire a team of 5-10, wouldn't it make sense to hire at least one more-senior engineer to help lead and mentor the more-junior ones?

When I was an early-stage startup founder, I was told by various advisers* that $150k should be the absolute upper limit on engineer salaries, and that I should try to talk engineers down to $110k or even sub-$100k by selling them on the "vision". I was told I should make up the difference in equity, but also that I shouldn't give an employee more than 1% in equity or maybe 2% for a "rockstar".

Do the math here. A company raises a typical seed round at $6M valuation cap, and is offering 2% over four years (considered VERY generous!). Even if we pretended that was preferred stock rather than common, it's worth $30k/yr. So you're trying to hire senior engineers while offering less than half their previous total compensation.

What ends up happening is you hire people straight out of college or away from other startups. But you cannot hire a senior Google engineer.

In my opinion, a tech-oriented startup should plan that exactly one of their first 5-10 engineers should be a senior engineer for whom they offer a salary of $200k-$250k and equity of 3-5%. Aim to poach an L6 from Google with this offer. (But only hire one such engineer early on. A team with too many senior engineers can be even worse than a team with none.)

Or alternatively, make sure one of your co-founders is such an engineer and is able to focus their time entirely on engineering, not other founder duties.

* Advisers all say different things, often contradictory. It's probably best not to listen to them, TBH. Yes, that advice applies to this comment as well, and even this footnote. Have fun.

A) actual, i.e. what you've built or

B) potential, i.e. what will you build

And then to get rich you need a multiplier on those things. But just being a good engineer, in general, does not get richly rewarded. If you show me a pure engineer who makes 1 million, I can show you a founder who made 100x from his work.

If anything, landing a job at an unicorn is much harder cause they care about things like culture fit, enthusiasm, esoteric FotM frameworks, and entrepreneurial spirit.

Point is, compensation and skill don't correlate as strongly as people think.

I heard Oracle OCI also pays in the 300-400k range (even for Seattle).

My friend at a startup is ready to quit because he's only paid $170k for the last 5 years and he regrets not staying at Apple because the shares he left on the table were worth over $1M now. He is now 0/2 in startups, both of which you have heard of, and he's very frustrated.

Before this I was first employee of a startup that eventually sold to Google. Even if I'd stuck around for the acquisition I'd have gotten $0 from my stock options—employee options were wiped out completely. Why put up with that bullshit when a big publicly-traded company will reliably deposit large sums of money into my bank account every quarter and I don't have to work crazy hours?

Plus I joined as a SWE1 so there are two promos in there.

In that specific case, I believe the startup was worth the opportunity cost. I was coming from San Antonio, not exactly a tech hotbed, and from a small liberal arts school nobody's heard of. I'd interviewed at a bunch of companies out the Bay and was rejected by all of them. A friend was an investor in TechStars' seed fund for their San Antonio program and he put me in touch with the founders of one of their companies. Those guys took a chance on me and hired me on a contract to solve some scaling issues while they were still in the program.

Once they graduated and raised a series A, they brought me on full-time. I worked remote for another six months after they moved the company up to Boulder, eventually following myself. They let me go after about two years but during that time I gained a ton of StackOverflow reputation for Scala and Akka, which led me to one of Twitter's open source advocates who made the intro for Twitter's Boulder office. That was back in 2015. About a year later the company sort-of sold to Google, who then fired almost everyone and re-sold the IP (or something, it was weird and I wasn't there, but my investor friend gave me some of the details).

So, in my specific case, the startup was worth the opportunity cost because my opportunity cost wasn't that high. I didn't have a six-figure SV job as a backup, but I was able to leverage the risk I took into that sort of job.

With that said, I'm super interested in how we can make it better for early employers, and the obvious solution is to give them more equity. Why do founders get over 10x early employees ? Just doesn't seem fair.

Choose wisely.

That being said, I'd go for a startup if you want to eventually run your own. There's so much you'll learn from seeing things actually occur that you'll never learn from anywhere else.

In the last startup I was in, even though we're in a team of only 3 engineers, implementing design changes was an uphill battle. The senior engineer lives in Eastern Europe so communication time was difficult, and he had a very impractical way of doing things (preferred his own hand-made JavaScript framework over third parties, no modules, no integrated testing). These things lead to making myself a harder sell for companies that follow less unorthodox software development practices.

Yeah, they can often be more freeform, but also by giving you the illusion that you can flip things around, or be a big fish in a small pond. Being that big fish is not good if the pond itself stinks.

In reality, many if not most startups are run by inexperienced and often immature managers and engineers who are substantially less qualified and skilled at running a team than their equivalents in more mature tech companies.

There's an attitude I've noticed also of, "we're not Xyz." Hate to break it, but most problems aren't really that unique. If you resist learning the lessons from other companies, you will repeat their mistakes.

As is often the case...

Very often the first generation of employees at a startup will consist mostly or solely of folks with 0-3 years experience at most. Then if that startup survives, all these people are "naturally" promoted to senior / team lead / tech lead levels...

> It can be very frustrating being someone with experience that has to sit back and watch big mistakes be made despite warnings from people who have done it before.

I feel you, brother. I've been there too.

> There's an attitude I've noticed also of, "we're not Xyz."

It's called "young arrogance".

"Hey, we're a bunch of straight-out-of-school engineers, but clearly we can do better than Google because we're awesome!".

This times 1000. Too many stories to tell, especially in SV.

> you may find yourself having to explain your decisions/code to people who's engineering skills are 'being able to convince a VC to give them money'

> you'll also probably not tackle 'large problems' but hack and slash a Node/Django/React app into meeting an MVP

Those hit way too close to home for me. I made the mistake of joining such a business when I was fresh from college and broke. The only good thing that happened is that I got some savings out of it. Issues included broken spaghetti code, hacking together MVPs with enough fancy graphics to impress clients (faking it all the way), and having to explain to my tech illiterate boss why I couldn't "just fix it" on the harder problems.

Oh, and the micromanaging is real too. It can wreck your mind to the point of needing professional help.

The real kicker was that it was all on an indefinite "contract" (1099 but you sit in the office like a regular worker - I already filed the IRS contest forms) with low pay and zero benefits. Never working at an early startup again.

Because founders take at least 100x the risk of an early employee, and 100x the personal risk and commitment.

Founders generally aren't getting paid (at least until revenue or significant funding comes through) and they have 100x the impact that an early employee does on the success of the company. If an early employee doesn't work out, the founders just replace that person. If the founders aren't working out, the company fails. If an early employee isn't working out and the founders don't replace that person, and the company fails, that is again the founder's fault.

Early startup employees have higher risk and generally more stress than at established companies, and if the market was rational, they would be compensated more, in cash, to offset this risk and stress.

Equity is not the solution, for many reasons. The biggest reason is that the founders will always value the equity higher than early employees. If not, they should not have founded the company.

It sometimes makes sense for founders to sell some of that early equity to VCs (anyone who has buckets of cash and wants more risk/reward exposure) who can afford to hedge by investing in lots of early stage companies, only one of which needs to be a winner. Once the VCs put the money in, it makes sense for founders to hire people at market rates.

VCs should be people who are swimming in cash, and therefore looking for a high rate of return, and with a high tolerance for risk in the amounts that they are going to invest. Early employees in general do not meet any of these criteria.

For early employees to accept equity in place of a market-clearing salary is then just a mistake. We see engineers settling for half the salary they could have at an established company, plus lottery tickets. This is absolutely crazy. Early engineers in the vast majority of cases should not be going anywhere near the kinds of crazy risk that pouring half your salary into a long-shot investment represents. Especially when the salary that you are left with is tied up in that same risky venture.

The reasonable position for early employees is to insist on not also being early investors. Raising money is the founders' responsibility, they should go out and do that, and early employees should demand the same salary they could get at an established company.

The argument that equity compensation aligns incentives makes sense for co-founders and for executives. It almost never makes sense for early technical hires who can easily be replaced.

In terms of market rate salary, the startup will never match FAANG. Seriously. I'm talking about Sign-on bonus, annual bonus, re-ups, benefits (like a heart-transplant $100k operation for your kids), gym membership, rent subsidies, etc...

So it has to be equity since that's all the startup can offer. It's income inequality 101, what we're living in.

Anyways, at some point, I'm complaining, because the system is the way it is and we have to live with reality. And I understand that if founders didn't make it out big enough, they wouldn't start one in the first place. But I have a feeling that if enough people were educated on how much a bad deal being an early employee was, we could tip the scale a bit.

> "if enough people were educated on how much a bad deal being an early employee was, we could tip the scale a bit."

Yes. The reason why startup compensation is much lower are because of perception (people aren't rational) and only a shift in perception will shift the balance.

The reason why equity is not the solution is that the default outcome is not the Camry, it's giving up some multiple of your salary in exchange for nothing. People overvalue lottery tickets. We're not rational.

If a funded company (series A, say) is offering you equity as a large part of comp, you have to ask yourself why the VCs don't buy back that equity for the cost of paying market rates for talent. If it makes sense for you, it should make even more sense for them. Unless you think you have a higher appetite for risk than early-stage investors, something doesn't add up.

Because the company wants to align your incentives with its own success, of course. That's the original reason why equity was offered to employees in SV, back in the good old chip-making days.

According to your argument, equity never made sense as a compensation factor. Obviously that's not the case, it has been an important factor in the past, and if enough people wisen up, will probably be so again in the future.

Look, either startups sell equity and pay developers market rate, or they give them more equity to compensate for under-market pay. Otherwise, these startups are underpaying developers, plain and simple, and these developers will prefer to work in companies that compensate them fairly, which this thread's commentary suggests is already happening.

Incidentally, I agree that paying market rate in cash isn't the solution, because startups need harder, more dedicated workers than the average company in the market.

That's exactly why equity is crucial.

Tellingly, startup founders agree when they pitch their startup as "definitely a unicorn, stick around and your options will be worth millions of dollars" to every single candidate. It's just that the equity factor is now only empty promises, because even early employees only get tiny amounts of bottom-preference options.

I agree. So hire harder and more dedicated people. This is not impossible.

The idea that people will work harder for equity than they would for EV-equivalent cash is where we disagree.

If you have 5% of the company, and your direct contribution makes 5% of the difference in whether the company meets its objectives, setting aside whatever external market factors that are totally beyond your control--how motivating is this really? How motivating would it be to a more economically rational actor? Maybe this is the real reason why startup employees tend to skew younger...

Depends what you mean by "early". The first engineers should be getting 1% or a bit more and getting diluted along the way. This can still be $400k-1M for 4 years of work with a base that is more than enough to "pay the bills".

Not quite nothing ...

The option is available to all, but very few take it. For really good reasons.

The answer is not and will never be writing bigger checks with money you don’t have. It’s getting real up close and personal with your team and figuring out a way for everybody to win. If folks want to ride my ride, that’s super, but most cats don’t really have a taste for my risk and work profile. Where I excel is professional development and lifestyle. I can move the needle for people there.

I know what I’m doing. Been at it for years. It works for everybody. There are so many people who deserve a shot but will never get one, if you’re willing to dig and develop there is no shortage.

The risk part of this isn't remotely true in many cases,or rather it's offset by so many other benefits accruing to them. Founders generally are drawing at least a small salary and, in this context (YC/VC funded) they are not necessarily risking much if any of their own capital. Moreover they are benefitting in ways early employees don't (e.g. social/network connections).

It usually takes 2-3 years before a typical founder can get seed funding and even think about hiring employees. During that time period, they are funding the company themselves, and doing all the work themselves. Yes, they usually draw a small salary once the company is VC-funded. By that point, ~95% of founders have been flushed out of the market and failed.

There are a small minority of people who can raise VC on just an idea because they're white, wealthy, and went to Stanford or because they're roommates with a VC's daughter or because they're an unusually slick salesman who can swindle lots of people. I would highly recommend not working for these people - or really, any founding team who did not build and sell the initial version of the product themself - because they generally do not know what they're doing, and these startups become a miserable experience for the employees. But they are, I'll reiterate, a very small minority of founders. They are a somewhat larger minority of the founders who can hire employees, because getting VC investment automatically puts you in the pool of startups that is looking to hire. That's an information distortion between the viewpoint of employees (who only see the startups who have gotten at least to the first funding round) and founders (who see all startups, including the ones that struggle for years to get their first revenue).

Really? Does white people baiting have to become totally normalised? It’s not like East and South Asians aren’t over represented in VC land.

(Exception: if you are Chinese and your investor is Chinese and you have a personal connection to that investor you can sometimes raise money on "Hi I have an idea and trust me." This is a recent development and comes from the massive amount of Chinese capital floating around these days, and is sometimes not actually the best move for your startup.)

I know YC is a relatively small part of the VC ecosystem but it’s pretty influential. If the VC ecosystem is as racist as you say there should be plenty of opportunity to make better returns out there for some enterprising VC.

There are a few other VC firms that similarly work hard to avoid missing promising founders of minority backgrounds, but they are still the exception rather than the rule. Over time, the "rich, dumb, and prejudiced" folks will get flushed out of the market, but that's over a lot of time. Besides, they'll probably just get replaced by a different set of prejudices - nobody can be 100% unbiased, you can only hope to replace biases that are useless and arbitrary with ones that are somewhat more useful.

This is an exaggeration at best. For the vast majority of employees there is a lead time to begin employment at most places. Typically this will be a minimum of one month (interviews + decision + org readiness to onboard).

By the way, it applies equally to founders as you describe (anecdotally I've seen a number of founders get regular jobs while they wound down a business).

"Left with nothing" except social connections and, exactly like the employees they had to fire when the business failed, a need to generate income from another source.

Founder lionization is absurd.

What social connections do you think founders get that employees somehow dont? And what is this worth? So founding a company and losing everything is fine because you make some friends? If you talk to any entrepreneurs, you'll quickly realize you'll lose more friends and connections than you gain, precisely because of lack of time and ability to relate. It's a very lonely road, not some glamorous jet-setting adventure.

What's absurd is thinking that starting a company is just some hobby that is no different than any normal job. Until you actually do it, it's easy to overlook the incredible personal investment and stress it takes to put something together from nothing. Most companies fail, and many do not raise capital or have some quick meteoric rise but rather suffer through years of trying to make it work. The upside for founders is incredibly rare while the downsides are very common. Employees get paid either way.

Maybe if they stopped treating themselves like some anointed class and shared the equity with their employees instead of viewing them like lower-class citizens it wouldn't be so hard to find comrades.

That's a fine view to take! But don't come rattling the cup around going "but poor founders, so lonely, nobody to talk to" when they've made that choice.

Nobody is complaining really, certainly not the founders who chose what they do. In fact it seems like people who aren't founders that are complaining about the supposed benefits and lack of work without actually understanding what it entails.

Simply untrue.

Many early startup employees work intense 12-14 hour days. Are you saying founders work 1,200-1,400 hour days?

Early startup employees also risk about the same as founders. Maybe a little less, financially.

> Founders generally aren't getting paid (at least until revenue or significant funding comes through)

That often happens fast, particularly in markets with well-established, well-oiled VC machines like SV.

Founders usually start out with under market pay, but it's maybe x3-5 under market, not x100 as you imply.

> Early startup employees have higher risk and generally more stress than at established companies, and if the market was rational, they would be compensated more, in cash, to offset this risk and stress.

You're talking about it as if it's some sort of impossibility. There's no natural law that says that early employees must get a fraction of 1% non-preferred shares and almost never make any money from it.

Early employees can and should get a bigger piece of the pie. If they don't, then it's not just something to be wistful about ("if only the market was rational!"), but there will be very real consequences, which we are already seeing: startups won't be able to hire top talent, because the top talent will go to companies that pay it better.

> Equity is not the solution, for many reasons. The biggest reason is that the founders will always value the equity higher than early employees. If not, they should not have founded the company.

So you're telling early employees working 12-14 hour days that they don't value the startup? Irrelevant, unsubstantiated nonsense. "You shouldn't get more equity, you probably don't want it anyway!". If they don't want it, or don't believe in the startup, what are they doing there?!

Hours and days don’t capture the value. I have risked my house, every minute of spare time, I have put Heroku bills on my personal credit card, paid contractors out of my pocket and had to create something out of nothing within a difficult market vertical. Comparing that to a “long day at the office” doesn’t even compute.

Early employees also get paid. In my little company, I am the last person to get paid. My employees are the first even when it’s coming out of my own pocket.

It’s asinine to equate an early employee with a founder. As far as 12-16 hour days for employees — if that’s the case then you are doing it wrong. Nothing good comes from those sorts of hours — it isn’t sustainable even for a little bit.

I finally burned out and “retired” to 10x the salary at half the time and energy cost.

My point is that people will do things that are not in their financial interests because they are believers. Early employees are believers. I think you are underestimating the amount that early employees are putting on the line, including things like out of pocket costs for services for those businesses. People ARE doing it wrong, if rationally self-interested is your metric.

First of all, kudos to you for being so dedicated and courageous.

Most startup founders that I know aren't like you at all.

Often they have seed funding very early. Not only do they pay nothing out of pocket, but typically they can draw a modest salary pretty early on.

The other thing is that nobody is claiming you shouldn't get more equity, that is fair. My argument is against ridiculous assessments that "founders always work x100 harder than any employee".

Most founders I've seen weren't like you, and I've seen early employees working harder than founders in some cases.

By the time the employees start to get hired, a large part of the risk and work that a founder does to earn their hopeful future fat stacks has already been done.

Now, are startup compensation packages a little low and relying on the money making reputation of past decades? Sure. That doesnt mean there isn't a world of difference between working hard on something that has a decent amount of vetting for below market rate, and working hard on working that's almost certainly not going to pan out for zero dollars.

What you describe isn't the case for most tech startups I know.

These startups need a lot of highly involved technical work done, and often need to hire a small team early on. They typically get seed money quickly. It's not unusual to see seed money right from the start.

> Now, are startup compensation packages a little low and relying on the money making reputation of past decades? Sure.

The point in this thread is not that it's "a little low".

The numbers quoted is that if you're a good engineer at a top tech company, you can almost guarantee about $2m over 4-5 years. In a startup, you'd make less than half of that in cash, with the only compensation being some stock options, that people are rapidly realizing are worth nothing in most cases.

That's a big difference, especially over many years. And we didn't even mention the large gaps in benefits, healthcare, work-life balance, job stability...

The bottom line is that the startups were so good at squeezing the real value out of their job offers, that now only irrational developers will choose them over bigger already successful companies.

If you're 15 years in at Google then yeah, no shit you shouldnt take a job at some hinky dink no name company. You're severely demoting yourself. You wouldn't go wait tables at a restaurant and expect the compensation to be competitive with your software engineer salary. Your skills aren't that useful to the restaurant, they wouldn't make anywhere near enough money from you for it to make sense.

Senior level big software company employee vs startup employee is like that but on a less extreme scale. You're more useful to them than you are to a restaurant, but you still have a lot of skills and experience that it doesn't make sense for them to pay for that it does for a big company.

Its on me for not specifying and making assumptions, but imo when talking startup competitiveness it should be focused on fresh grads or those with a couple years experience in industry but not necessarily at big tech. That's where startups are going to find their cost effective generalists, and its where I think the compensation is "a little low and relying on past reputation".

Also, with good devs making $400-500k/year at bigco, I think it needs to be kept in mind that those numbers are with a lot of their compensation being in stock and big tech stock having risen a lot in the last decade. Someone whose compensation at Facebook happened to turn out to be $400k/year would have been getting signed each year for far less.

Using those numbers would be like evaluating startup packages as if theyre guaranteed a large ipo.

As for startups getting funding right from the start, that means they're being funded based on founder credentials rather than the qualities of the business. If you have those kind of credentials and use them to start a company then your opportunity cost is likely huge. That's the founders additional risk there.

It's a job. Early employees working 12-14 hour days are not doing themselves or the startup any favors.

If the market were rational, compensation would be more in cash and less in kool-aid, the importance of work-life balance would be understood even at the early stages, and the idea that a startup has some special kind of magic--where people sleep under their desks and believe in the dream--would be replaced by professionalism and the sober assessment of probable outcomes.

The reasons that startups have yet to learn lessons that other industries learned decades and centuries ago are easy to see in the startup culture if you look for them.

I worked in early stage startups. There is absolutely a strong sense of a small, intimate team working hard for a common goal.

Nobody is claiming or treating it as "a job". When the founders were asking the whole team to regularly work entire weekends before launch, nobody said it was "a job".

> If the market were rational [...]

You keep repeating that, but it is a sort of truism that doesn't stand up to even cursory scrutiny.

High-acceleration startups are, by definition, trying to reach ambitious goals quickly. They're not about providing a nice work-life balance to their members.

If a startup founder pitched a VC with "we all have great work-life balance, and it's our goal to stay this way!" she wouldn't get a dime.

Startups are intense, and have intense expectations.

The reality is that startups need people to work harder, sacrifice more of their lives, for a few years, in a hope of a big payout, which is where the equity component comes in.

This formula worked well in SV for decades, but recently the VCs and founders got greedy, and said "hey, why should we reserve millions of dollars for our early employees, if they'll work just as hard for empty promises of such amounts instead"?

That's the current situation, as reflected in this thread.

There's probably two areas where we might disagree here.

One is that "sacrificing more of their lives" leads to better outcomes. Reasonable people can disagree on whether, or under what circumstances, 80-hour weeks and weekends at the office actually do help the company.

When you are a founder, it is hard not to work all day every day, and you have to actually force yourself to take time off or you're likely to become less effective without even realizing it. Often this same intensity and drive filters down, but in a distorted way, by the "nobody wants to leave the office first" effect. Hard work "theater" is just as common in startups as it is anywhere else, but the hours are longer and it is even more destructive in the long run. Where the correct balance should be between "real artists ship" and professionalism and having a life outside of work--that's a big issue.

Setting that aside, the other area where we might disagree is that if you decide long hours are where it's at (and I'm not going to disagree with how you run a company if it's yours) then how do you motivate people to do that?

> When the founders were asking the whole team to regularly work entire weekends before launch, nobody said it was "a job".

Is that because nobody would do that for just "a job"? Or is that because nobody would rationally do that unless they were being fairly compensated? Finance and petroleum are very different industries but in both of them people put in long hours, risk their health, and are (sometimes) well compensated.

Leaving aside pep talks, let's say you can motivate people to work long hours by giving them either equity or cash. Even if the expected value of the equity is higher, the higher variance makes the cash a far better choice for most employees. The question is, if employees were compensated wholly in cash at whatever rate the market would set, but had the option to buy the equity they are getting for the salary they are giving up, as a totally unrelated and optional transaction, how many of them would take it?

> This formula worked well in SV for decades

How do you avoid survivorship bias here?

Regardless, we can agree that the situation has gotten worse, in the sense of people taking compensation packages that you need a finance degree to understand, but I wouldn't say it was rational for most employees taking early equity even before it got worse.

Don't act like founders are unique in this affliction.

I am not an expert, but between dilution of stock, the high risk involved with any startup, the timeline to payoff on equity and accompanying opportunity cost for non-founding engineers, and the overall lack of control which even early employees have relative to founders, it’s not unreasonable for an early employee to say “I do value the company but do not want to bet the farm on it for the next five years of my life. I will, however, as an employee, give it my all.”

Especially if said employee is > 24 years of age.

Or, you know, they can try to keep getting away with offering 0.01% non-preferred stock, and telling every employee that the startup will sell for $1BN at least, and they will become millionaires.

It's really only obvious why founders deserve a much larger exit than employees after you've tried to start and run a company.

There's plenty of edge cases where it doesn't feel fair, but in general, starting and running a successful startup is nothing like being an engineer. And it deserves a very different level of comp.

Also - there's plenty of engineers at startups that wouldn't get a job at a large tech companies.

Now imagine having to create convince people to invest in your crazy boat idea, build the darn ship, prove it won’t sink, and then finally do some sailing.

In no alternate universe is sailing a ship the same as all the other steps. Maybe you’re just as talented as the main dude/owner of the ship. But you sure as heck don’t have the experience or skill in building a sea worthy ship.

And who's guaranteeing all these fallback jobs? Other founders just hire failed entrepreneurs so they can stick together? That's a great way to lose money. You must be reading about the 0.01% of founders who get all the attention and the fluffy feel-good startup posts because this is definitely not how it works.

And yes, more risk deserves more reward, why is that even controversial?

I think the argument is that the current reward to an early employee is a joke compared to the risk their taking, given the other job options available to them.

So its not that the founder shouldn't be rewarded fairly for their risk, but that early employees are not. Thus the answer to this thread is just that being an EE isn't worth it.

I think that makes sense, an EE should end up making more money then a non EE for the same effort/time. Otherwise, why would you risk ending up making less in case the startup fails?

So say a startup has 10% chance of success. On failure, the EE loses 200K compared to non EE jobs. That's a 9 in 10 chance of making 200k less, so maybe the 1 in 10 chance should give at least a 9 time payout, where the EE would end up making 1800k in case startup succeeds.

Otherwise, you'd be crazy to accept an EE job, unless you just can't find any other non EE work.

That said, I think its obvious for a tech worker currently that unless you're located somewhere which only has startup jobs, and you don't want to relocate, then you're better of going with an established business with more guaranteed pay and equity.

I’ve noticed people tend to specialize at larger places, and not everyone wants to go deep rather than wide. Startups are a super easy way to optimize for a wider skill base, albeit at a sharp cost of depth.

YMMV, but it depends on the type of education you value.

Generalization will limit career and compensation eventually. There will be a point where the market will have a glut for general skillset.

Specialization, on the other hand, usually leads to higher compensation and valuable skillset.

This does not mean that Specialist can't be Generalist. It could be that Specialist was once Generalist and get bored :).

By 2012-2014, the landscape of web development has not changed drastically so if a Generalist stops doing what he/she did and chose to be a Specialist from 2014-2018 (say, in Storage design, Distributed Systems, Machine Learning, or AI), that doesn't mean he/she can't go down to the product/web layer and contribute: it's still MVC doing CRUD backed by MySQL/PostgreSQL and with a touch of some client-side stuff.

Which risks did you take?

You should. They're constantly impressed with the quantity of their applicants that they will only reply to you if they want to hire you at all. Otherwise, you'll spend another six months waiting for an email that will never come.

Try doing that with a startup whose bulk of development is done overseas. No personal work connection, lack of meaningful discussion (due to time zones and cultural/philosophy barrier), no concern for your growth as an individual. You are more likely to be distant from your workers due to startups' smaller budgets discouraging the use of in-house developers.

I can second this. But it's not just the money though. One big thing for me is lack of actual vacation/sick time accrual in favor of this "unlimited PTO" nonsense. It leads to a culture where no one ever feels comfortable taking vacation or sick time (the obvious goal of the policy), and work life balance is a nightmare as a result.

In fact, to call it unlimited and not have a minimum is probably always a scam - its so easy to post a minimum, to not do so must be deliberate.

Of course, I am sure a lot of this has to do with management culture /values. Another colleague in a different department is being discouraged from taking FMLA (which is borderline illegal). However, he feels stuck as the company is doing his Green card application and has him by the balls.

All that to say, I took my FMLA and handed in my notice as soon as I returned.

Unlimited PTO doesn't lead to work-balance nightmares; it's the result of management discouraging employees from taking breaks.

Absolutely. I've seen multiple startups with this ridiculous policy. The net effect of it is that people hardly ever take any time off, and certainly less than employees with more sensible policies, since taking any time off directly reflects on your moral character.

These issues around having vacation days "approved" seems like a function of your bosses, not your PTO plan. If you have to get your time approved, it doesn't matter the size of the bucket you're pulling from.

My experience is much more "hey I've got a couple weeks off coming up, by the way, I'm thinking of [x, y, z] for making sure everyone's up to speed while i'm out" and no pushback.