Comment by siegel | Hacker News Reader

Comment by siegel | Hacker News Reader

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I agree these complaints are widespread in corporate America. In fact, I think these issues are worse OUTSIDE of the startup world.

Most of the founders I deal with pay their employees before the founders themselves get a dime of salary. Sure the founders get the bulk of the equity. But they also give their employees equity awards, even though the employees get paid a salary, as well (i.e. they don't take on the same risk).

In comparison, in generic corporate America, the people on top get substantially more guaranteed cash compensation, in addition to any stock awards.

In addition, I've had plenty of startup clients who did all sorts of generous things for their employees that were not required. For example, when getting acquired, I have had clients give special cash bonuses to employees to ensure they get a sufficient "upside" in the transaction (beyond what the employee was entitled to from their stock or options). I just haven't seen that type of behavior in more "mature" corporations.

In corporate America, young people don't get tricked into working severely underpaid for equity that very often doesn't turn into a lot, and sometimes the employees don't even realize they have to BUY the options and when it comes down to it, can't afford them. #Realtalk

In corporate America, it's not great, but it's less of a shill because people aren't pretending to save the world.

> In corporate America, young people don't get tricked into working severely underpaid for equity

No, they just get tricked into working severely underpaid for cash. Unfair compensation is unfair compensation. Fraudulent valuations are fraudulent. It has nothing to do with silicon valley vs corporate America it has to do with fraud and people taking unfair advantage of information differentials.

Well, I would say information differentials + a huge power imbalance. And I would add to that a huge cultural shift vs. decades ago in terms of what is considered "acceptable" and "moral" as relates to relative compensation of rank-and-file workers vs. executives. (One can debate the extent to which these cultural shifts are also the result of policy shifts.)

I appreciate that perspective and I see your point. Most of the employee questions re: equity that I am privy too are fairly sophisticated. But, of course, many employees never ask questions and, therefore, my experience may give me a skewed perspective on the sophistication of startup employees.

That being said, plenty of larger companies convince their employees (successfully) to "drink the Kool-Aid" and think that their company is saving the world. But, of course, those employees are also being paid a salary (unlike many startup employees, as you note).

> Most of the founders I deal with pay their employees before the founders themselves get a dime of salary. Sure the founders get the bulk of the equity. But they also give their employees equity awards, even though the employees get paid a salary, as well (i.e. they don't take on the same risk).

Employees don't take on the same risk because they typically can't bear the same risk. This is the equivalent of lauding the bravery of a stunt double for jumping off a roof when they've got a big blue safety cushion waiting for them just outside the frame.

Well, yes, that is often true. Many founders do have a family safety net that allows them to take on risks. I don't disagree with that. And I don't think we have the right set of gov't policies in place to incentivize and allow a broader set of potential founders to take such entrepreneurial risks.

But, to be quite honest, I also don't think this sets Silicon Valley apart from corporate America. In the broader world of corporate America, people from higher socioeconomic status have a greater chance of getting ahead because of a whole set of advantages granted to them - better education, connections, etc...And, as a result of getting ahead, obviously they are better compensated than their peers born into lower socioeconomic classes.

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