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Comment by pb | Hacker News Reader

I know that "employees get screwed" is the hn conventional wisdom, but it's generally false. If a startup is huge success, there will be many wealthy employees. Companies like Google and Facebook created thousands of millionaires. Uber and Airbnb will likely do the same. Of course if the company exits for less than money raised, then yes, common will likely not be worth much, but that's the risk of startup equity.

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Most successful startups aren't huge successes.

Most startups aren't successful period. If you're the 100th employee at a startup that sells for $30M, then no, you're not going to make a lot from that exit.

The economics of startups are such that the vast majority of the returns for both investors and employees are from the big successes, so if you're looking for $$, that's where you need to be.

Yeah but in your examples, the founders became multibillionaires. Quite a ratio there between founder and employee.

> I know that "employees get screwed" is the hn conventional wisdom, but it's generally false.

It's generally true. 90% of start-ups fail within 5 years. If any employee banked on their equity as a form of compensation (which, yes we know you shouldn't, most do as start-ups typically pay below average salaries) it's now gone. Successes are rare.

> Companies like Google and Facebook created thousands of millionaires.

Source? I had heard it was a few dozen at Google and a few hundred at Facebook. Thousands seems a little high but I could be remembering the data wrong.

If a start up fails then the equity is worthless. That's how equity is _supposed_ to work.

As for Facebook and Google, you heard wrong. I worked at both companies and know quite a bit about how much equity employees got.

> If a start up fails then the equity is worthless. That's how equity is _supposed_ to work.

Correct. I never said anything to the contrary...

> As for Facebook and Google, you heard wrong. I worked at both companies and know quite a bit about how much equity employees got.

Data? I'm fine with being wrong but being told that and given nothing is...a bit unsatisfying.

http://www.nytimes.com/2007/11/12/technology/12google.html

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