Hacker News Reader

Comment by jklm | Hacker News Reader

It'll be interesting to see how this'll affect startups down the line. If employees aren't cashing out in a reasonable amount of time (or at all), will the majority of startups suffer a brain drain of top talent? Will startups need to come up with a new way of compensation beyond just equity?

View on HN

I think that's already happening to some degree, though it's not a "new way" exactly. Totally anecdotal, of course, but based on watching people move between jobs in my professional circle, it seems like experienced people are no longer willing to take nearly as much of a salary cut for the sake of equity as they used to. A startup that doesn't offer competitive salary and equity will have a pretty tough time hiring the most in-demand employees.

On the flip side, it seems there's still an endless pool of less-experienced people who are chomping at the bit to work at startups. There's a reason startups recruit primarily people in their 20s.

Can't private companies give out equity just fine?

Yes? But if there is no intention of an IPO, where an early employee has a reasonably easy path to liquidate their stock/options, what is the benefit of owning equity in a private company when there may be a limited/non-existent market for said equity?

Potentially entitled to a percentage of quarterly profits, among other things. Draft whatever terms you'd like.

Startups these days eschew profits for "reinvesting in the bueiness." Heck, many publicly traded companies do this, too.

Also, let's be realistic in what you're asking for here.

Reply on news.ycombinator.com