This was how you could get rich. Maybe I'm overly cynical, but I feel that these days VC and founders know all the right tricks to play to remove value from the contributors and reallocate it to the investors.
The easiest way is to join companies that are obviously doing well and will likely IPO in 2-3 years. This is still a lottery, but one with much higher odds and a lower potential payout. You can make $600k-1m every few years in equity alone by hopping around these companies.
If you ever wondered why so many people have ~1-2 years of experience at each company on their resume, this is often why. They join, get a decent chunk of their equity grant (in RSUs), then go to another company to get more equity. Some of these companies will do well, others will do poorly. You end up distributing your risk and ensuring you'll get a decent payout.
I would say that if you want to hit a lotto ticket, this is your best route. Increased variance is your friend when you are at the downside and it’s all uphill.
But if you want to get rich, and you are the average HN reader, it’s better to bet on the typical case.
(That said, if you have a list of companies that meet your current criteria, I would love to know! I know a lot of faang engineers who are bored and would love a shot at millions.)
I thought that RSUs were limited to public companies (since they are essentially grants of stock, not options).
Part of why I wanted to be a contractor was precisely because I didn’t want to play the startup lottery. But RSUs would give an alternative.
GP said "anymore", so I assume he was talking about newer startups.
If you're in your 20s or 30s, 2M is probably not "retire tomorrow" money, but it would probably let you retire very early if you managed it and made smart investments with it. Maybe I'm wrong but I don't think many ICs are getting even 50k from startup equity, nevermind 2M.
20M is "retire tomorrow" money for sure. And definitely workers do not get that kind of money from startup equity.
Most of what I hear now is companies giving fake "shares" that are ostensibly tied to the value of the company but are not actually shares and do not represent any ownership. If they do give shares it's not enough to pay out big, and they get diluted repeatedly over time.
Yep. It's a thing unfortunately: https://en.wikipedia.org/wiki/Phantom_stock