What if they give 1-2% and good market rate salary (~200k/y) to a founding engineer? Is that still a bad deal?
Unless the company hits unicorn AND your shares become liquid (secondaries don't count—you generally won't be able to sell enough shares to make a meaningful dent), you'd make just as much or more at a FAANG firm with way less risk.
Of course, I say this while not at a FAANG firm, because I prefer startup type work.
So you would get paid like at another company but get equity on top and it's not a good deal? How comes?
If it were truly market rate (total comp not just base salary) then sure, it's a good deal. How likely are you to find that in an early startup? It must be pretty close to zero percent chance. But if you find it, sure, it's good.
You'll still work harder and be more stressed but it'll be a different learning experience which is always nice.
That's what makes the early startup scene the only thing available for some.
Maybe you'd lose our on some tiny perk/benefit but that's not always the case.
So I'm not seeing what's wrong with this deal with the only caveat that the engineer has the experience not to overwork/burn out.
The startup can go bankrupt any moment, thats a big deal. You get crappy perks, often poor benefits.
At least with a startup you are going into it knowing that you have a higher probability of thing going south financially. With a big company, you might not get any warning at all.
Titles obviously don’t transfer back to big companies, we had plenty of ex-cofounders and CTOs hired into the same junior roles as anyone else who could LeetCode.
OR....you could just become a founding engineer by actually founding and keep 90% of the equity. You can get that salary with an equity raise, its worth not being the low-person on the totem pole.
First employee is always a sucker
So I am not sure it's that easy.
Of course, the idea is to keep the same work/life balance one would have at a more established company.
It’s Baby’s First Labor Exploitation.