So yeah: I'll just go with Google I guess /shrug
They ended up making a barely acceptable offer because despite my horrible faux pas, I was a domain expert and they couldn’t keep staff for more than a year. And I accepted because I was 1 month away from being bankrupt and homeless. Lasted a year and a half. The business turned out to be solid but I left for greener pastures.
I have no idea why owners are so cagey about the health of their businesses and funding sources, to potential employees. Especially when things are basically fine! He was bootstrapped and evidently had fine cash flow. Why is this a faux pas to ask? HN is full of entrepreneurs: why are you so offended when a candidate asks about cash flow or to see the cap table?
You see the same behavior in non tech companies when VPs find out what their senior software engineers are paid, and start getting upset at the similar salary level, even though that's the market price. Or in things like rules that only Execs get to fly first class. I had a an executive have HR look into me "breaking the rules" when he saw me in first class with him on the way to a company event after I paid to upgrade my own seat.
Life is about observing the lizard brain rules.
Never be the bearer of bad news for example, because even if people are polite about it, the lizard brain says stab the bearer of bad news.
- The other common reason is those numbers are confidential not just from employees, a competitor or investor who is evaluating a competitor could use it against you, so founders worry about that stuff, you may not take the offer and mention it to next company you talk to etc.
- Few tech employees have the financial know-how to read financials, especially of startups . Most early stage investors rarely go through the actual books in any detail.
- Measures like churn, CAC, ARR, MRR are the go-to metrics . The actual book numbers basis cash flow can be very bad although company is in decent health, this is why banks will not loan early-stage startups money unlike small businesses as startup numbers are not simply good enough by traditional metrics.
- In small enough companies exposing the books to new employee will give rough idea of who is earning how much including the founders, and what else company is spending money on, keeping the information asymmetry can be seen as beneficial by founders.
So as a startup founder, unless you are ONLY looking for financially illiterate employees who are willing to get snowed, you need to show and tell.
Often I think the employer doesn't realise that me, the software engineer, might not have the financial know how.
But my buddy from college with a masters in finance, THEY do. I'm running the numbers past them.
the upside will be low unless you join very early stage and get decent amount of equity or join as a founding engineer or the company you join becomes valued at 10s of billions which is of course rare otherwise there is very little upside.
Almost always FANNG level companies will pay you close or better what you would make best case in most startups with much less risk and far better work life balance.
The reasons I have found people are most happy with are non financial, like can’t join big tech/ great dev but poor leet coder, learning opportunities, much more senior role , switch skills, less red tape to get things done, stepping stone to starting your own etc. You can’t quantify that , for some it is worth the risk and the paycuts , for others it isn’t.
Most startup recruiters or founders probably won’t pitch that picture to prospective employees, independent of their ability to pay you economics is going to be favorable in big tech any day compared to most startups .
The nature of the business is, employer's rarely ever have to hire an employee who knows how to negotiate, knows when to walk away from a deal, and knows their market price.
Most employees you've ever worked with are not quite that clever.
Most employers vastly prefer employing this slightly dim type of employee, because they cost a lot less money and ask for a much simpler quid pro quo.
I find capitalism extremely exploitative like that. At least with unions you have a hustling union boss advocating for the union employee so employees don't get ripped off too much.
Now it seems like the vast majority of people I work with are tired parents in their 30s and 40s, who are working a job they don't love for not all that much money.
Because they don't have the resources, socioeconomic and otherwise, to bargain and argue their corner.
Startups often have very, very mission critical technical problems.
The first 20 engineers will be solving some really important technical problems. And they'll need high speed & high quality, since what they do will probably directly manifest in the ole bank account.
Even outside of engineering.
A rule of thumb running a startup is you should overpay for your first 30 employees. Get smart people who are future leadership candidates.
If/when you expand to a 500 person company. Out of those 30, chances are quite a few will manage upwards of 30 people as their reports and child reports.
I'm sure there's a million different variations on this story. By no means is it universal.
But the "early employees are solving life or death business problems, and will transition to being leaders and force multipliers of large numbers of new hires" definitely happens.
I don’t know, many startups are solving business problems, tech is sometimes just fancy versions of CRUD apps.
I am evaluating options now and one of the reasons I am not so keen on offers from startups (even ones with multiple series of funding) is that they expect me to take the risk without sharing adequate information.
Having said that, if risk is a major concern most startups are not the perhapsright place to work. They are designed to fail quickly than become unsuccessful or low growth businesses, employees or founders do get short end of the stick frequently.
Risk appetite for each person is different. For anyone considering a start up an assessment of the degree of risk and rewards is essential. So if a startup does not offer me enough information to make that decision I will pass on the offer.
In my experience, all the good startups are transparent in helping employees evaluate equity offers. Ex. all YC companies I interviewed at were happy to share info on outstanding share count, valuations, and even preferred stock.
Meanwhile other lesser startups (often run by finance types) thought I was insane to even ask.
It's clear which group actually values engineers.
A couple years later, the ship came in, and it was a big payday for the other employees, but not him. He was furious.
I mean - I think it's fully legit for people to have a 'broad sense of the state of the company' - and companies should be prepared to speak to it in some way. But not exactly in the way people are asking.
If financing rounds are public, then at least there's that, and it's possible to 'very crudely guess' where companies are at.
~Every interview process I've gone through required an NDA at some point.
> I mean - I think it's fully legit for people to have a 'broad sense of the state of the company' - and companies should be prepared to speak to it in some way. But not exactly in the way people are asking.
A "sense of how the company is doing" is not anywhere near enough. The company can be doing extremely well and that still doesn't give me any indication what (for example) 10,000 shares are worth.
If a company won't provide at a minimum the percentage your equity grant represents and valuation at last funding round, you should rightfully value stock at $0.
The 'health of the company' and the 'valuation of you shares' are completely different things.
On your last point: "a minimum the percentage your equity grant represents and valuation at last funding round" - yes, they should probably do that. Because otherwise, the value of that equity could be anything, it's impossible to know what 10 000 shares means.
But that doesn't tell you anything about the company. Private valuations are mostly fantasy.
You'll want to get a sense if the company is healthy, and even 'burn rate' isn't so much the right question, it's probably new customers.
If the company is growing in terms of revenues and customers, it's probably the most positive signal of all not only in terms of stability, but also the actual value of the equity in then i.e. 'if it will be worth something'.
Finally, NDA's are not a very good protection, everything is still 'need to know'.
Your position is inconsistent and conceited. If you have actual points, you wouldn't resort to denigrating others.
Especially since you're moving the goal posts, your contribution to this thread is useless. You've swiftly gone from saying employees should scrounge info on funding rounds from the web to admitting employees need to be told info about outstanding equity and valuations.
I hope you're never in a position of hiring for a startup. Anyone with an attitude like yours would chase away quality candidates and only leave clueless rubes behind.
> You'll want to get a sense if the company is healthy, and even 'burn rate' isn't so much the right question, it's probably new customers.
This shows how incredibly uninformed you are. It's easy to acquire many customers by selling $1 for $0.50. It doesn't mean the business is healthy.
I highlight the fact that you did that - which validated my position that 'interviewees won't know specifically what to ask'.
You jumped into the ad hominem.
I have 'hired for startups' in fact several of them, including two Unicorns, and I'm an adviser to others, and I've helped set up a VC fund.
But that's besides the point.
You don't seem to understand the material being presented, but maybe worse, lack the self awareness to recognize that, and possibly have thin skin, all of which are not good attributes for dynamic environments like startups.
I'll help you. For each of these questions, do you think it's something employees should be told:
1. How many shares are outstanding and what preferences are included in the cap table? 2. What was the valuation at last raise and when did that round close? 3. What's the burn rate and remaining runway? 4. What are the 6/12/18 month plans for the company? What are the biggest risks and opportunities currently facing the company?
> You don't seem to understand the material being presented
Again with the ad hominem.