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You have to admit there are loads of unscrupulous people out there who will take the compensation you're referring to, deliver nothing and leave. I've seen it myself at one start up I was at. The founders recieved a generous investment (on the order of $40m) to grow the business. They hired sr vp of sales and a sr vp of marketing who did exactly zero to move the business forward after 12 months. Both left having accomplished nothing, but were very well compensated (going from rumors and a few off the cuff comments from one of the founders son, I never saw concrete numbers). Granted their lack of production was probably just as well attributed to the owning cabals lack of agreeing on any damn thing rather than malice, but my point stands.

So ok, you have proven track record, how are you proving that again? I mean just coming in off he street and promising rainbows and money to fall out of the sky is easy.

There is a difference between promising a unicorn and having a proven track record. That you are too lazy to verify the background your potential hire is providing you is 100% your problem. Bite me.

Specially at VP level...

How would that background verification work exactly? Your groomed references are providing objective evaluations? Bite you indeed.

This seems to be a common theme on HN where folk who purport to be senior level profess their ignorance as to how one goes about performing one of the very basic tasks their role would require of them.

If you don't know how to do background verification on people then you have far bigger problems than your fears of being gamed.

Back channels would be one way, but then how to verify the back channel? Sibling "I know and your dumb" response not very illuminating here.

My ongoing experience is that this question is never asked in good faith so please don't misunderstand me.

What I am saying is: I think you know and you have an agenda.

If you truly don't know then this is really something you should know if you are doing the job you are saying you are doing.

To use an analogy: I would not waste my time explaining how type systems work to someone who is arguing rabidly against them in an online forum.

If they care then it's something that is so important they should actually go out and educate themselves before getting into conversations about it.

I was working at a company that went public. They hired a CTO that produced negative value. He decided we need to rewrite the software in .Net and left...

>>I'm now starting a software company.

So are you going to

a) hire the best developer you know and pay them whatever they ask, or

b) hire the best developer who falls within your budget (which, I presume, cannot be very high when you are starting)

If you answered b), then I guess you already know the problem. No matter how qualified you personally think you are (and you are, I am not doubting that) - the only thing that matters is whether you fit into the plans of your employer, which includes whatever nebulous salary range they have in mind.

I suppose you will say that you are already running a successful business. But IMO that doesn't actually amount to much when you are creating a software business. Why? Because you are now competing with the FAANGs of the market. And there is already a lot of talk that FAANGs are actively hiring to take the best labor off the talent pool even if they don't need the services of those hires. So suddenly you have just lost almost all opportunity you had to create arbitrage - that wonderful and probably mythical situation where you buy labor low and sell the output high and take home a handsome profit.

So you recalibrate your expectations and go one rung lower. And you do grow your company quite successfully, because, lets be honest, if you can "do things which do not scale" at first to grow companies, it pretty much follows that you can make plenty of money despite hiring ordinary talent in the beginning stages if you have a good business background - which you do. And at some point, because you grew so fast, you will face a similar shortage for some kind of skillset, only to find that you suddenly cannot really afford to pay what the very well qualified person wants because that isn't even a part of your culture anymore.

And ironically, said person then goes and writes a post about how your company completely lowballed them :-)

Huh? No, I'm writing the software myself.

If no equity was available, but profit sharing was? i.e if you brought in X million you get a % of that. Would you have taken the position?

I'm starting a company, but want to retain 100% ownership. I don't want to give equity as I don't want to lose control. Been there, done that. I'd much rather go down the road of profit sharing based on the results.

I might have been interested, depending on the startup.

One way to solve for both preferences, in tech, is to create an option pool. I broached this with an executive. He said they were looking into it, but it wouldn't be available until next year at the earliest. My interest in working full-time for them declined to 0 at that point.

Sounds like one of jobs I had. They treated options/warrant as something really really special, like awards/gift.

I couldn’t make them realize it was part of my compensation expectations and for that I wanted to know company valuation and dilution, even if a ballpark.

The problem with this is defining what profits are when you're reinvesting them or take VC and burning. At the end of the day you can't control how the CEO intends to spend the profits.

There’s a huge difference between losing control and giving equity. Namely, 50% (and that’s assuming equal voting eight per share). Why do you not want to give equity at all then?

Personally I'd see that as much more attractive for any not already pretty much 'made it' startup. It's a nearer term reward, and a more direct incentive (not just because it's nearer, but because `profit => reward` vs. `profit => ceteris paribus 'worth more' => might IPO/sell => reward`).

How many new companies are profitable, and if they are, why would you want to work for a new company that isn't plowing all of its profits back into research, product development, and growth?

Because I get a share of their profits? If they plow all of its profits back into R&D, assuming I got no equity, what do i get as a reward? A potential chance to say i worked for a company that IPO’d? More coworkers?

Profit sharing means money in the pocket for me. Actual hard, green cash.

That's exactly my point. Ideally, you should take a competitive salary. If you have to take some kind of alternative compensation because you believe in the mission or whatever, most startups aren't profitable even at IPO/aquihire stage, and in the case of Amazon, could have been profitable years earlier but reinvested everything and then some. I just can't see a scenario where it makes sense to take profit sharing at a new, growing, unproven company.

Doesn't all of that apply to equity too?

I'm only saying that profit sharing sounds better than equity, of an unknown unproven startup; not that it'sa guaranteed key to making you rich.

Personally, no, for a variety of reasons. A founder who is a control freak is a massive red flag on it's own. Profit sharing is also easy to game either for or against someone as the movie industry proves constantly. So I don't personally feel like playing under-handed games constantly (and if I don't, other will so we're back to square one) to maximize how much revenue is attributed to me. If I wanted to play politics I'd have joined a larger company and gotten paid a lot more than any startup.

edit: Also, incentives people to think short term and pump us revenue at all costs (then find another job when it comes crashing down) which is not a great environment to work in.

Equity and control are two different things. Board seats, voting rights, stock classes etc are all tools at your disposal to create the corporate structure. Furthermore, with control you can allocate yourself options as part of your compensation, which undo some of the dilution.

You certainly don't want to retain 100% ownership. You need partners who treat this business as their own and share your burden. I think cofounders are vastly overrated, while hiring key personnel and granting them significant options is not emphasised enough.

Revenue, maybe. Profit? I don't have any control over how you define profit, and you have an enormous amount of control over how you manage your revenue. Additionally, even a unicorn is going to stay in the red for years. Unless you have some financing structure that is radically different from typical startups and don't plan to reinvest in the business, profit sharing makes no sense.

Not to mention revenue sharing should count as an additional cost in the profit calculation. So they should be doing that regardless.

Explain to me again why I want to make you rich at my own expense? Really?

Profit sharing no, revenue sharing yes.

I'm starting to suspect that the best way to interject utter panic into a mid-level corporate interview is to mention an independent business venture.

While this may earn respect at the very top of the company from another founder or former founder, there more typically a lovely process of watching an insecure middle manager do the math about what you did and freak out....

…and this is the rational response to a sucker offer. Go into business for yourself because competition like that is going to be an absolute pushover!

I want to hear more of these experiences, and to learn how to manage my career this way. I care about my client's satisfaction and get tired of corporate mentality. I hope someday you can share your experiences without fear of anonymity.

As a former "VP of X" at a startup, titles don't mean shit at startups. If a startup can hire a janitor for less if they call him a "VP of Janitorial Services", they will offer that title to a janitor. I'm exaggerating, of course, but not by very much.

The corrolary of this is: not everyone knows this, so _after_ you're done negotiating salary, equity and benefits, it might be a good idea to inquire about a grandiose title to go with all of that. "Head of Javascript" if you're junior, or "VP of Backend" if you're senior, stuff like that. :-)

And as result of title inflation, a lot of titles are losing meaning even in big companies.

I know people becoming principal eng at FAANG who are just playing their cards right.

Becoming principal engineers is usually just playing the cards right in general. Very rarely does anyone get this far on technical merit alone. I know several people at Google who easily deserve the title based on quality and volume of their contributions, and several "principal" engineers who do not. Life isn't fair, what can I say. In addition to being good, you have to be at the right time at the right place, please the right set of people, and "play your cards" in other ways. In fact, if you do the "soft" things right, "being good" at technical stuff matters very little, beyond a certain basic threshold.

Very true, I see that the higher one goes with the increasing requirement of greater influence radius turns into politics.

However what I have noticed recently is that title inflation has arrived to big companies too; mostly to increase retention. So, when I mention played their cards right, I wasn’t referring on how they leverage the soft skills, etc. It was more on individual ability to do salary negotiation each perf review, bluffing/threatening to leave, etc.

At the end of the day I guess it is good for them and everyone who is in those markets. But again, my main point was around title inflation is not exclusive to startups, although director level and above seems still to be hard to get in FAANG (at least in the companies I worked for those require board approval) while in startups they are given more freely.

Threatening to leave is not the best strategy at Google BTW. You never know (by design) if a counter-offer will be extended, and you're very likely to be taken up on your bluff. :-)

Playing your cards right is a prerequisite for becoming principal.

I mean, it is not even wise politics. It is just hold on to their seats and let management know they know HR knows the attrition rate...

> 8 figures a year in revenue. This wasn't a broke startup

These statements don't exactly follow. Revenue is not a profit. It's possible they are broke with a great revenue.

I really want to understand your situation here.

When u say equity - do u mean they wouldnt offer u a standard options package ? Or was it too low ?

Or do u expect to get couple of % of a $10M ARR company?

I am curious because HR is hard and broken for everyone. But expectations are also very high.