Ask HN: What's your experience working for a YC backed startup?
What was experience? How large was the team? Good things, bad things?
My father died a couple weeks before re:invent. In my grieving I took us there and hooked us up with netflix and yahoo, probably worth more than the funding we had at that time.
During the conference a creep was hitting on our married office admin and basically stalked her. Our cto and ceo were cowards and did nothing so I protected her.
Ashamed of their cowardice they fired me. A month later we hung out and they offered to bring me on as a marketing consultant. We got drunk and they admitted a higher up at YC told them to fire me because I had too much stock.
I would never, ever do businesd with a YC company again.
I will get shadowbanned for this post.
We don't ban people for criticizing YC or YC startups (https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...). When we've banned your previous accounts, it has been for obvious abuses as we explained when we've banned you in each case, and then only after warnings that you were certainly aware of, since you responded to them (rather aggressively as I recall). I have no idea what happened at PagerDuty (though the bit about a "higher up at YC" strikes me as unlikely based on everything I've personally observed at YC). Just generally though, if you want your internet story to have credibility, you should probably omit demonstrable falsehoods.
Which is why I'm super-skeptical of anyone who says they're at some rocketship growth startup because they just want to make "great products". Unless their definition of a "great product" is one that makes a lot of money or is popular, they either aren't being honest or don't fully understand their own motivations.
Back in the 90s they weren't as good at it, so everyone made retirement money. But now you're not making retirement money unless you happen to work for the next Facebook or AirBnb. Basically unless the founders are making 10 figure exits, you aren't making much at all.
1. If you're joining in the very early stages (like YC batch time), make a plan in writing with the founders for how your compensation will change once the company raises/grows. Those early days will be hectic and it's easy to let those changes get delayed, and something unexpected (good or bad) always comes up since they're startups. You are going to be sweating a lot to get things done by Demo Day or whatever the milestone is, so make sure the comp situation is clear.
2. Do your own analysis on the unit economics of the business to evaluate your potential payout. There will be lots of projections thrown around to attract investors -- as an engineer, you will be able to see all the data and make your own projections.
3. The more industry experience the founders have, the better. Worked for a top 100-500 company? Managed? You're de-risking the job culturally.
4. As far as evaluating character/people you want to work with, pay close attention to how people you are considering working with treat people significantly below them in pay grade. Go out for a coffee and see how the founder treats the waiter -- it sounds silly or obvious but I find it's a good judge of character.
Teams I've worked with: 2-6 people, very early stages.
Let me know if you are willing to sell any options that you have at $0 from YC-backed companies. I’d be happy to buy as much as you have :)
It is true that there is risk, but there is also more upside if things go well. Make some educated guesses on outcomes and adjust by probability. The important thing is to revise your model periodically as you have materially new information.
Of course, this is just the economic consideration. There are many more important considerations.
Compare this and the rest of your comp to other opportunities you have, and factor in how miserable it would make you if it fails (you aren't a rational actor).
Also
Even if the "expected value" is high, how would you feel after spending years on what turns out to be a pretty low salary with no extra equity value, which is a very high probability event? Up to everyone to answer.
Those two are why I'm pricing such things at $0, unless there's a liquid market, simple capital structure and ordinary 10-Ks in EDGAR.
Whatever you call this sort of thing (predatory or otherwise), obviously it goes into your EV estimate/swag.
FWIW my answer to this stuff is never take a salary so low you would be unhappy if it tanks, which isn't the same thing as valuing equity at zero.
Understand that the "shares" that you get may end up being worth exactly $0, while the "shares" of the venture capital investor may end up being worth substantially > $0, because they sometimes are different things.
Just saying "oh yeah factor that in" doesn't help anyone who may not even know there could be a whole different class of "shares", as well as other corporate liabilities.
Relevant XKCD: https://xkcd.com/793/
By all means educate yourself, but this information has been out there for decades at this point.
I'm in no way advocating you saying "Oh, they gave me 1% on day 1, that means I'll get 5mm on a 500mm exit". You need to think about impacts of dilution and preference at minimum, but there's data on this.
And note I never claimed it would be accurate, the error bars are huge. But it's obviously more accurate than just setting it equal to zero. Which people really don't do, by observed preference.
Since we are in the weeds now, my actual advice on seed or earlier equity is mostly judge it as a measure of commitment and interest.
And at the moment the very top comment in this thread is about someone who got $100k, same as everyone, except the founders who somehow got out with 8 figures.
My point is to realize you're actually significantly disadvantaged. But i guess the youth has to do all the same mistakes over and over again, that's how the system goes forward. I should be cheering from the sidelines like most people do, it seems more fun :)
That's true, but it shouldn't lead to valuing equity at $0.
Before worrying about the impact of cap table structure you should also understand how and when they get that way - it really shouldn't be at the beginning (and if they won't show you some details then, walk away).
If you truly value equity at $0, why accept it at all? Fwiw I've seen this experiment done with founding engineers, offer a sliding scale of salary and equity, in bounded ranges. 100% of people in that case (small sample) took some equity in exchange for a bit lower salary. Obviously they didn't actually value it at $0.
They stated "as you go with the decision making"; which really means "don't make financial decisions based on an assumption that your options are going to be worth what your recruiter says they will be".
> Make some educated guesses on outcomes
I have seen tons of people make "educated guesses", which are all extremely rose-y outlooks. "Even if the company only sells for $30M I'll still own 1%", which completely ignores most of the underlying reasons why your stock will be worth absoutely 0.
Of course if you do understand all of the underlying risk and outcomes, go ahead and make educated models, but the majority of the time people don't even know what they don't know.
Startups are not the right answer for everyone.
Still a risk. Albeit smaller.
I would actually focus more on what kinds of behaviours, skills, and values you appreciate in your coworkers and apply that to the founders. The culture of any company is dictated by them primarily, so meet with them after you decide what works best for you.
I spent a couple months on contract with a friend's startup that had been accepted to YC. The company was just 2 founders when I joined with a barebones concept and no customers. I ended up doing (in my biased view) most of the meaningful engineering work during my 2 months there, including 100% of the work to build the marketing page and the product demo that was used for their pre-seed raise. There was no semblance of work-life balance. There was an expectation to work every day. Every coding marathon to ship bled into the next day's work on equally urgent tickets.
The offer I got to stay long-term was a few percentage points, vesting over 4 years, and a salary that would basically just cover living expenses. Another friend of mine had just got an offer at 350k total comp at a large company as a (MID-LEVEL!) engineer, so the decision to leave seemed pretty obvious.
That said, I think there are some decent reasons to join a YC startup.
- If you really believe in the company's mission, product, or founders
- If you prefer the go-go-go work environment. Some people are just wired this way
- If you plan to start your own company, it might make sense as a stepping stone and learning experience
As this seems like asking "What is your experience working for a publicly traded company?"
A lot of responses seem to believe this question is either naive or asked in bad faith. Insofar as YC is a network of founders and mentors with strong opinions on how to successfully start any grow a venture, it would be shocking if there were no generalizations that you could make.
- They grow fast. Unlike larger companies, there's room for promotion. Unlike smaller companies, you're not stuck being the sole person responsible for a thing for the next two years.
- Lots of tech debt. All startups have them, but YC ones are on another level. Like the Collison validation method, where they'd give an API and there would be a human on the other end handling all payments that went through it. They often acknowledge and manage it better than most startups.
- Product oriented. They believe good product leads to profits, which leads to investors. You don't end up building as much crap that nobody uses.
- Hard work. Some are proud, some are defensive/hide it, some hint it (free dinners).
Other than that, culture is mixed. You have liberals and racists. High and low pay. Bureaucratic and flat. Sincere bosses and charlatans.
It sounds like your definition of “racist” is “disagrees with me politically”? Do you think such a definition helps victims of “old-fashioned” racism where people treat you worse because of your skin color?
For context, a lot of these are Asian, where American political definitions don't apply. Maybe a better word might be "family business".
Some companies are built like gangs. They're there to protect a certain ethnicity. You're expected to speak Mandarin, or it's "expat friendly", or they appreciate those who pray 5 times a day. Certain religious holidays are acknowledged and some are not. But very few people can build a unicorn and a family business at the same time.
Maybe what I meant was some companies try to hire "people like me" and others try to hire "people not like me".