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Comment by jiveturkey | Hacker News Reader

> recruiter working very hard to convince me I'd be rich when they IPO

recruiters still do that? so unethical.

I had a similar comical situation with Uber a couple months ago.

I was arguing that the offer they gave me was a paycut compared to my current position. The recruiter explained to me that I should value the stocks not on the latest valuation but on the 100% certain 250B$ valuation on IPO day.

Unfortunately recruiters get a bonus when you sign and are not accountable for anything down the line. They have all the incentives to lie to get a candidate to sign.

> I should value the stocks

I only accept sign on bonuses, keep your stock, it's worth a lot... right?

I had a similar (ridiculous) conversation with a startup that had already listed on the public stock exchange.

Okay, if the shares are really worth much more than their current market value, and you want to hire me for $X salary and $X/50 market value worth of your stock, it'd make more sense for me to take a different job that just pays $2X salary in cash, and then buy stock on the market...

I joined my current employer a couple days pre-IPO, was given stock options and told they might be worth a lot. Despite my insistence, I wasn't told the exercise price, nor how many shares were outstanding, nor any other relevant information, so (sensibly?) valued the options at around zero. They turned out to be worth more than my base salary.

Good for you but this is still extremely shady. Any respectable company should tell you how much you are getting and how those are currently being valued. Attaching no value to a private company RSU is pretty smart though.

Anecdotally, I was a bit sad that I didn't get past the first round with Uber, but then a few days later they announced their hiring freeze and terrible financial performance... probably for the better!

Are employees even able to sell on IPO day?

In a traditional IPO, there is generally a 90-180 day lockup period for existing shareholders (to prevent shares from flooding the market on day 1). This is one of the big benefits of a direct listing (see Spotify/Slack)...any shareholder can sell stock on day one.

> to prevent shares from flooding the market on day 1

These are common, but I don't think they apply to all share classes, so the big boys are free to get their money out.

usually it doesn't apply to the "Big" VCs and founders. So they are quietly able to get out before the stock crashes a couple months later.

Could you share some examples of that occurring? To my knowledge, a lockup period is almost always a standard requirement from the underwriter (on any larger IPO), and in some states is even required as part of their Blue Sky Laws.

If a founder/VC wants to get out before the IPO, they usually just do so on the secondary market. Example: Benchmark cashing out a portion of their Uber stake to SoftBank pre-IPO.

https://www.sec.gov/fast-answers/answerslockuphtm.html

I think Ubers lockup expires November 6th. should be an interesting day to watch that stock.

I had a unicorn's VP-operations try to convince me that my job-offer isn't below market - I should be valuing their stock at 10-100x the valuation used in their most recent round (a few months ago), because this company is sure to become the next big thing.

That's disgusting. It should be illegal to mislead people like this.

Employees aren't like A16z, they're not getting preferred shares and their primary source of income isn't likely to be investing in corps.

Stuff like this can ruin people's lives.

> Stuff like this can ruin people's lives.

But does it really? Sure, it sucks if you get tricked to accept a lower salary, but I'd assume that even a below average software developer salary will be enough to lead a somewhat comfortable life.

Think about it this way:

Joining a startup is an opportunity to be part of a team that's doing something really hard, so you need to trust each other. Lying about the compensation structure isn't a good foundation for trust.

Now, you're spending at least a year of your life, working 40+ hour weeks in close proximity to someone who cheaply misled you.

s/40/80/g

Can you give me some money? you seem comfortable. $40k ought to do it. Thanks.

It is illegal, which is why you'll never see them do it in writing.

It is? I'd believe it, but I'm naive on these matters. Can you explain?

I had a company in Richmond try to get me to work part time in exchange for stock. They haven't even had an initial round of funding yet. Same situation, told it was to be the next big thing. I'm a gambling man, most projects won't get off the ground, most won't last 3 years, even fewer will reach IPO. We have a lot of crackpots in this industry who think an idea is actually worth something.

Even FANG companies try to play this game (our stock will appreciate more, our company is more volatile the upside is way higher, etc...)

At least the A-part or FAANG, the one that sounds like a river and not a fruit, was pretty surprised by the stock development after 2013/2014. This resulted in them over-paying a lot of the people they recruited in that period. Not that I would complain, so. But they didn't over sell the potential of RSUs during recruiting. My trick was to settle for sufficient base salary and take the RSUs as bonus I never really planned with.

Regardless, they put quite some emphasis on the RSUs being part of the salary as base salaries, while not bad per-se, were mere average for the region. And kind of sub-par considering the size of the company.

I’ve heard the opposite pitch from FANG recruiters: Our stock is pretty stable and/or appreciates modestly. But if you don’t believe me we are a public company so you can sell on day one. Unlike those startups that are just offering pieces of paper with promises of riches on them.

Maybe they’re just good at tailoring their messages. They look at me and see an old guy so they bring out the “stable liquidity” pitch.

This could be the case, I figured they were trying to spin some sort of message to me given my age.

Netflix assuredly does not play this game. Their compensation almost 100% cash. It used to be exactly 100%

But regardless with those companies you tend to get options or grants. That’s real money with the reporting requirements of a public coma-any and entirely on you to decide whether to take it and ride it out.

They also tend to just pay more and have real bonus structures.

Not sure this is the same game.

We detached this subthread from https://news.ycombinator.com/item?id=21062373.

bad ones do. they'll be selected out of the industry over time.

The problem is, they aren't being selected out of the industry...they're becoming the industry.

Unfortunately there's always new recruiters that are willing to press this point either because they believe it or they just want the commission and will say what it takes to place a candidate. This is not something that will be fixed just by having the "bad" recruiters slowly removed over time. It's a constant task to educate job seekers that such an event is very unlikely.

Recruiters get paid by the companies seeking employees. If these tactics do indeed provide employees, then the company pays them and they stay in the business.

Recruiters are selected for recruiting talent. As long as the talent stays for some length of time that the recruiter isn't blamed for poor retention, then the recruiter wins. This time is months, not years.

That's why recruiters who work these angles still exist. It's not like this is a new phenomenon. It has been going on as long as there have been tech-recruiters.

If they did get selected out, they would all be gone already.

There's almost no barrier to entry to become a recruiter.

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