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Comment by goalonetwo | Hacker News Reader

In my 20s I joined a couple startups as "early engineer" or "founding engineer".

I quickly realized those are the absolute worst positions to be in. You take almost as much risk as the founders but almost none of the upside. One startup died, the other one sold for 100m$. Out of that I saw 400k$ as an exit. Not too bad but even with that exit I ended up making way less than if I joined a FAANG. In both cases the founders made millions (through the exit or through liquidity)

Now I'm a realist. Either you create/found a startup or it's not worth joining one as an employee. You have way more upside at a FAANG/pre-IPO mid-life startup that already found a great product market fit.

Essentially, founders are pushing a crazy narrative of Startups being worth it to early employees because they need them. It was sometimes fun but I wish I just joined a FAANG like most of my friends, I would have a couple millions by now if I did.

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I second this. I took a large salary cut to be 1/2 of an engineering team at a seed stage startup for ~1.25%. After 2 years of pretty grueling work I left to go back to big tech for 3x the pay. I wouldn't call it a total waste of time in the sense that it made me a better engineer, but it certainly wasn't worth it financially. The company still exists and has had a relatively successful series A and "A extension" but I don't think my equity will ever be worth anything.

I really wouldn't recommend anyone work as an engineer at an early stage startup unless you're getting ~5% or more (this would be unprecedented) because the risk is barely less than the founders and the pay is generally terrible. Series B or later (growth stage) may be a sweet spot where the salaries are decent and there is still significant equity upside without the insane hours.

This is very valuable sharing, thanks

Founding engineers are so underpaid relative to founders. I’ve seen it be founding CTO with 40% and founding engineer with 1%. It’s ridiculous and we should not accept it as the standard.

A few good early hires can be just as valuable as good founders.

Yeah. Founding engineers are drinking the koolaid narrative from the founders. I know I have been in the past.

Is it? If founders were getting only 10% of ownership which would be further diluted in following funding rounds, how many of them would take the risk of starting a company? On the other hand, if early employees were not getting any equity, how many of them would apply anyway because they need the job / or want to gain experience and build their network with limited risk? (not saying that they should not be getting equity). If 1% seems unfair, they can start their own company, then they would quickly find out that the difficulty / risk / stress / responsibility is an order of magnitude larger and equity reflects that.

Many founding engineers do later start their own company after they see how much of a better deal the founder can get (mentioned in the article).

Foinding engineers that need the job and would take it without any equity aren’t the difference-makers I’m talking about.

> Either you create/found a startup or it's not worth joining one as an employee. You have way more upside at a FAANG/pre-IPO mid-life startup that already found a great product market fit.

I'm glad you mention the pre-IPO mid-life startup and not solely trot out the usual "work for a FAANG instead and make $600k/yr out the gate" nonsense. There are quite a few pre-IPO mid-life (or even vaguely-but-not-super-early) startups out there that are doing well, growing more or less sustainably, will pay you a market-rate (or even above) base salary, and give you a solid equity package that has a much higher likelihood of being worth something than those early-stage startup options have. You might not make $600k/yr at a FAANG, but most people at a FAANG aren't making that, and many smart, talented people won't pass a FAANG interview anyway.

How do the startups that you found flourish without employees?

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