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Comment by KaiserPro | Hacker News Reader

I think the bigger issue is that most of the financial upsides of startups were illusory

Unless you're a founder, you're unlikely to make any money, and predatory VC/backers using convertibles/senior debt to turn your equity into Zimbabwean dollars. Thats before any stats are calculated for lasting long enough to either IPO, make money or get bought out.

As someone who did successfully exit, the stories of multiple-millions being handed out turned out to be legends. Dodgy accounting & staff retention meant that actually you don't get fuckyou money.

The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way.

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I was the ~15th engineer at a YC startup that had a very big exit. Over 4 years I made less than $80k total (20k/yr) from my options while the founders made high 8 figures. Had I joined BigTech I would have made over $1 M just from stock and I would have worked less.

Back during the dot com days, everyone from the secretaries to the chefs to the founders were getting rich but nowadays YC teaches their founders to keep the money and stock options for themselves and for the investors. The only way employees make life changing money is if the company exits for over $10B.

> nowadays YC teaches their founders to keep the money and stock options for themselves and for the investors.

In founder-matching profiles, I've started saying that I wanted to spread the wealth around with early hires, more than the convention. If founders win, the early hires also win.

Lesson learned: no matter how busy a founder is, they are no less petty than anyone else, and some will make time for a call, just to see who this hippie a--h--- is. :)

I joined a startup that was big on this message. They were previously at startups and felt they didn’t get a fair share in an exit.

Well it turns out even that wasn’t enough and they did the same thing. I suspect VCs control too much of the financing.

Maybe, but people are generally like that. When they’re in the same situations they do the same things. I think few people are honest with themselves, or even know themselves what they would be like if situations were reversed.

I’m not sure it’s just the financing being controlled by “the VC’s”, but also definitely the entire culture.

I mean, the model for most companies - having a very heavy legal component when big money figures are being generated/spent - requires a great deal of bureaucracy which, somehow, inherently prohibits participation at an individual scale, in the massive profits.

It seems that a lot of it hinges on the nature of work for hire. If only there were systems in place that could make every human being a work for hire payment, even those performing CEO duties, then possibly the profits would be easier to spread.

I think a lot of startup problems exist in the Founder/CEO versus Founder/CTO versus Founder/CFO dynamic, which is what any company following the legislated structures must deal with.

VC’s exploit these dynamics, they can do it with money/financing, and they can do it without it, as well.

The crazy thing is, cases exist throughout history of three individuals getting together, building something great, and doing it without requiring any venture capital, generating through their own efforts, adventure capital.

We were rejected from YC because we wouldn’t dilute to 0 some of the early people at the company

They first told us we were in, but that we would need to adjust our cap table so that only 2 founders would have equity. They gave us a phone call, we pushed back, and later they sent us a rejection email

Commendable. We need more people with decency, principles, and backbone.

Interesting. Why would they care about something like that? Would it not just come out of the pockets of the 2 founders?

Your guess is as good as mine. My memory is a bit fuzzy about the details now, but I remember a very awkward phone call with one of the partners in which they were saying things like “the cap table is too busy” and that they only wanted founders having equity

We were willing to compromise to some degree, and the non-founders said they would give up most equity if that meant getting into YC

But after the call, we got a rejection email saying something weird like “your cap table seems to be in flux”, thus disqualifying us

> Back during the dot com days, everyone from the secretaries to the chefs to the founders were getting rich

As someone who is old enough to have been working in tech since the 1990s... not really. I mean, it happened on occasion but it wasn't actually a common occurrence even during the heyday of large dot com exits.

The idea of this was massively propped up by overhyping the vanishingly few cases in which it did happen.

I'm not at all refuting your basic point that the "we're all getting lambos" fiction got increasingly disconnected from reality over time, but it was always more apocryphal than real.

I also worked during the dotcom days and worked for a recently ipo'ed startup. Everyone made money from it, so this is from experience. One of the assistants made enough money to buy a vineyard and this was from a company that IPO'ed for less than $1 billion.

How can that happen, can you share details?

I was the second engineer (series A) at a company that IPO’d at a unicorn valuation. By all rights that’s a great outcome. I made about as much in that exit as I would have if I were just at a FAANG instead

This tracks.

I think the real value employees get is riding the rocketship in their career.

Early engineers often have first dibs on higher level roles, like CTO or director over people that join late.

Your initial grant might not be great, but being director at such a company is huge

Yeah, this is often overlooked in all the talk of $300k FAANG salaries.

Few people get those senior salaries, and those who do get it because of their unusual skills and experiences.

A stint at a startup is still a pretty good way to get those skills and experiences, compared to spending the same amount of time as a junior developer somewhere else. If you can make capital gains equivalent to FAANG senior salaries while doing so, even better! But if not, at least you'll have come out with a more interesting resume.

levels.fyi will give you some confidence in the wage.

Google, Meta, Amazon & microsoft all do banding, so the base wages is mostly public (hence why its all bollocks about wage negotiation, there isn't any.) The first level of senior for most of these orgs will tip the scales at around $300k

Having worked at both startup and FAANG, I don;t think startups actually give you the skills to flourish here in corp land. Sure, you might be a good coder, but most of the time its navigating politics that actually gets you promotion (that or good luck with a successful project)

You really don't need to be a good coder to be at a FAANG. Sure there are specialisms as you point out. but most of the time its just entry level CRUD, followed by manic debugging with shitty non-documented tools.

Wage negotiation means getting to the top of the band sooner. Other people might have to perform well at the level to get to the band, but a wage negotiator might just get there on their first day.

Most of the time the wage is not up for negotiation. Forget about it, you can't change it. HR and your future boss are tied up with company policy which says you start at X and you can't change that.

Spend your time instead on getting more vacation from the start. If instead you ask for 25 days of vacation per year instead of the default 10 you have a deal (or maybe they bring you down to 20 days). You can't get 50 days of vacation (there is a company max they can't go beyond), but you can get a lot more time.

I haven’t experienced what you claim. I’ve succeeded to the 99th percentile with wage negotiation the last 2 times I job hopped (both FAANG). The trick is you really do need to do the work to collect a poker-hand of competing offers with which to have leverage. You can then say “I won’t take your offer unless you make it (top of band, L+1, remote)” etc.

This has not backfired on me. It just takes 8 times more effort than getting hired at one place. I figured the benefit would compound.

Wait so you got an offer at a FAANG for one level, and you negotiated to go up a level in pay, but not actually go up a level?

Every company is different. Congratulations for pulling that off. It won't work everywhere though. The real trick is figuring out where they can negotiate - there is always something.

I know multiple successful wage negotiators at FAANG. Before their promotion their annual salary increase is on the order of hundreds to low thousands because they are already at the top salary for their level.

negotiation is very much a thing even at FAANG. If anything, it can help you being at the top of your assigned band. Other things can be negotiated.

Source: I am no great negotiator, but I've always negotiated my salary and got 10-15 % more than what I would have had w/o asking anything. This compounds after a few stints. And I've been a manager in startup/mid size/big tech: always negotiate.

There is also the signing bonus, which is usually available for a recruiter to sweeten things if the first offer is marginal. Google-recruiters for years claimed it was non-negotiable, all the while negotiating it for people who were willing to play the game.

Funny, my experience is engineers (at ICT level) at big companies are also really bad at politics - all they do in public setting is ask for more perks and benefits.

I see this too. An incredible amount of griping about the Wednesday cookies. Not much about how the shop across the street is giving an extra $100,000 for the same work profile.

Being successful at a startup isn't about being a good coder, either.

Especially if you're a founding member or an early hire, it often has much more to do with having good insights about where technology meets business, knowing how to tackle difficult problems using limited resources (IRL, not just in a computer), and even a sprinkle of politics if your startup happens to "disrupt" the wrong kind of industry.

If your startup has a management team that can abstract away all of that stuff so that you can just code in peace, I agree that your tenure there will probably not be worth the hassle in a resume.

That doesn't really address that the burnout/startup/hustle culture is part of the risk/reward valuation employees make to work at a startup.

If I can get the same compensation working at a FAANG with less stress, better hours and more balance/control over my life, and the resume entry may be 'more interesting' in some ways, but its hard to argue with FAANG on a resume either why wouldn't I? the choice to risk all of that for only a chance at reaching that compensation is a hard sell.

The possibility of pouring your hard work into a company from the start/early on with others equally dedicated, and if it blows up you all blow up is the selling factor.

On top of that, how many startups came from employees of previous successes that turned that wealth into more innovation? Restricting that path to wealth for many and concentrating the profits to a smaller and smaller group doesn't seem to me the best economic bet to make long-term.

Some people just like the hustle culture. They can't seem to stand the boredom of a sustainable company with years of runway. So it obviously depends on your personality. For some, the thrill is worth the risk. For others, it's a huge bag of nope. I for one am clearly moving toward the latter group as I get older.

>I for one am clearly moving toward the latter group as I get older.

For me, I'm strongly moving towards the mentality that a startup I care about would at least give me outcomes I care about and an environment I can enjoy without the BS of big tech corporate and the need to prioritize stability, but its largely because I can increasingly afford to consider risks and lower income positions because my current job and income that isn't a startup.

The time/stress trade offs at big tech are increasingly diminishing vs startups (hussle culture taking over there now too), so if I'm going to have to deal with it it might as well have the least amount of BS possible... Its interesting how I prioritized stability early on in my career, and now consider less stable/risky roles that are more interesting or exciting, while you seem to be going the other direction. There are certainly a lot of different journeys through life.

This is the opposite of my experience. Big tech is far more hours and stress. And the work is much narrower and boring. The system is designed to make people into commodities and make you do work in the way that most benefits managers senior to yourself. Solve this narrow piece of a problem using this specific method alongside 5 other people doing other narrow pieces, versus a startup where you can just own the whole thing and iterate it faster.

Startups pay less and have to take what the can get. This probably causes a vicious cycle that makes the pay gap worse and worse.

IMO the stress is different. In startups you own things a lot more personally, and depending on how you handle stress that can be more challenging than the stress at big tech.

Hours can very much depend on the big tech and startup individually, but big tech is certainly moving in the wrong direction here, and in the typically big corporation/enterprisey worst way possible (increased employee monitoring, shallow and manipulable KPI's that act more as perverse incentives than actually improve anything and that increasingly show the disconnect between upper management and engineers)

> And the work is much narrower and boring. The system is designed to make people into commodities and make you do work in the way that most benefits managers senior to yourself. Solve this narrow piece of a problem using this specific method alongside 5 other people doing other narrow pieces, versus a startup where you can just own the whole thing and iterate it faster.

I agree and its my primary complaint/dislike for my job. I would love to, and probably will change to a startup or other job with a company I actually care about and a role I find valuable, but I expect the pay to be a significant drop when I do. Until then I'm leaning on the salary to reduce the amount of time I need to work overall significantly and putting in my time so to speak.

For now big tech is winning, but if startups and employee equity start having the potential payoffs they used to then it changes the balance of the above equation by quite a bit.

What skills precisely you think about when it comes to an early engineer, but not founder/business person?

Scaling up a business, for one. By the time "scaling up" is actually computationally relevant, the founders are no longer coding.

Also general coding practices for large teams or multiple intersecting teams.

You'll find that outside the startup, the director/vp/cto title doesn't translate. Larger companies will often write you off as being "not experienced" enough which is often code for "you don't look old enough for this position". Unlike engineering and the startup world, big companies want you to look the part not just know the part.

The corporate world is simply a different environment with a different set of rules and a different set of engagements and thus requiring a different set of skills. A director or VP at a startup and a director or VP at a Fortune 500 company are two totally different things.

A CTO of a startup might be coding day to day, making technology decisions, and have a team or two underneath them. In F500 or Corpro world, this is more like a engineering manager or tech lead. In most big companies a manager does zero coding and rarely makes a tech decision, you go up to a director level, they might have 100-200 people under them, direct reports are almost all managers, and they never touch tech. Go higher up to VP or CTO levels and they are just so divorced from code that it doesn't make sense why a CTO in a startup would translate.

> Larger companies will often write you off as being "not experienced" enough which is often code for "you don't look old enough for this position".

It's not about age, it's about what you actually had to do. Company size, company age and political complexity are strongly correlated.

A successful large company engineering director spends their day mostly doing politics across the org, while a successful small company engineering director spends a lot of their day writing code, being an architect, filling in for product management.

> Unlike engineering and the startup world, big companies want you to look the part not just know the part.

Big companies want you to know how to play the long game.

That latter person sounds like a normal L6 at FAANG. Director is 8. They truly haven’t had the exposure to build the required skills for that lateral transfer.

Unfortunately, the company preferred to hire experienced ex-FAANG managers for those roles.

Everyone: Big Tech ruins news/social media/small businesses/democracy!

Also everyone: FAANG employees are better than everyone else!

I dont think FAANG employees are better than everyone else, but these two things don’t sound mutually exclusive.

Agree. Just an inflammatory observation that we are prone to both villainize and glorify the institutions that be without much cognitive dissonance. :)

On second thought, "irrationally preferred during hiring" gets at that idea better.

> Also everyone: FAANG employees are better than everyone else!

Rather: FAANG employees are pushed into startups by VCs.

How so? They get paraded around as tokens of competence by VCs?

I've always found it amusing that FAANG pedigree is considered a plus for startup founders when the skill set is not only different but sometimes detrimental.

No, the VCs tell the founder/CEO to hire people who've done it before to help pay down the risks of unknown unknowns (which are real – this advice is overly simplistic but isn't conceptually wrong). This translates into them hiring from FAANGs if they take the advice semi-literally.

>> I think the real value employees get is riding the rocketship in their career.

Startups hire those people when they are risky and the future is unclear. Once there is traction, the VCs and insiders bring in friends for cush Director/VC posts. Quite often the people who took the real risks get left out.

And that seems like safe capital preserving thing to do. A director role isn’t a prize for loyalty, it’s a job with a skill set. Your second programmer isn’t going to be as good at is as some guy who has been a director 6 years else where

Sorta. A very common pattern is for startups to make abysmal hires for these "executive" roles, because the people in those roles in big tech bring loads of politics and a very narrow type of experience. They bring in their friends, and it isn't terribly long before the people who got the company to the place of initial success are gone. I've seen this play out many times.

Not to say that the early employee is necessarily guaranteed to be better, but at least they're a known quantity, have demonstrated loyalty, and have loads of business context that the shiny exec hire won't have.

Good points about roles not being prizes (unless that was the deal, which it sometimes is), but I'll devil's advocate this anyway.

> Your second programmer isn’t going to be as good at is as some guy who has been a director 6 years else where

If you hire smart people who learn, and who believe in the mission and team... that programmer might well be in the running to lead engineering.

Knowing tech industry a bit, I'd be at least as skeptical of directors from outside. Of course I'd have to consider them, at times. But I expect at least half of the outside candidates for leadership roles will be disingenuous halfwits.

Meanwhile, if you've got people who had the grit to help get you to that point, and demonstrated alignment and loyalty when it mattered, and who foster that trust in your company culture, then you'd be an idiot not to try to find a way to get rare goodness like that in your leadership.

The CTO of Grab (my employer and $10b company) was an early engineer hire. Same for a lot of the L7+ talent.

You’re not wrong, but I don’t think 100% of the high level roles are filled this way.

It depends on the investors. Sometimes they will insist on bringing in their own people who will skip ahead. This can happen if bigger investors are brought on late or if the business is not developing according to plan and equity has to be sold.

Not everyone is in a position to work for a FAANG - they don't support working in all areas in all countries, often have formal education requirements and generally will be less flexible hours-wise than working for yourself.

If you don't want to leave where you are, a full time or side-project web startup can be started and bootstrapped with barely any prior requirements that you can't teach yourself and could be a good option.

I've learned not to expect anything from being an early employee. It's right in the name, you're an employee. Expecting some sort of consideration for being early is naive. Every time you receive a paycheck you and your employer are even and you shouldn't expect anything more.

This is true, except in the usual case where early employees are made offers that include some presumption of partial ownership of the company through stock grants or options, often with a corresponding decrease in salary that scales inversely with the strength of the founder's reality distortion field.

There's no such thing as presumptive partial ownership. Lando had a presumptive partial ownership and if you do you should expect the Vader treatment, "I am altering the deal. Pray I don't alter it any further".

The other bit here is that hacker news attracted a lot more engineers (vs more entrepreneurial-leaning folk) in the intervening time - and engineers never really made bank on startups. Even in successful startups the engineers are typically lower on the pay-out ranking than the less-technical founders and the VCs...

That’s a good point. Also the engineer personality tends to be extremely risk averse.

Thank goodness.

I'm not sure I agree with that - good engineers should be experts at managing risk. True risk aversion is an impediment in most fields that engineers are called to solve problems in.

That said, we're also pretty analytical, and when one could warm a seat in FAANG for ~$400k/year, even many successful startups weren't outperforming that TC.

People generally don’t look at risk for work projects than same as risk to their personal life.

All I’m saying is engineers tend to like certainty and predictability in their personal life.

This. FAANG and adjacent pays so well, it's a better and more guaranteed outcome than startups - for people that have that option.

Dan Luu wrote about it over a decade ago: https://danluu.com/startup-tradeoffs/

The math is not in favor of working at a startup, if you do it, don't do it for the money. People finally wised up to this.

Even as the founder, working at a FAANG usually works out better financially and is much less stressful. VC's do all kinds of horrible things to founders, like firing them, forcing them to sell at a price that means they get $0 (VC's get preference usually up to 2x their investment - if the sale price is lower than 2x the investment, founders and employees alike get wiped out.) People are also wising up to this.

If you're going to found a company think really hard about joining YC and/or going the VC funded route.

I think it'd be a lot more pleasant to found a company worth $10 million after 10 years, and own 100% of it, than to found a company worth $100 million after 10 years and own 10% of it.

VC is only really for when you've found real product market fit and your biggest problem every day is meeting the insane demand. Everything is just falling over and you can't scale fast enough and you're leaving piles of money on the floor because you just don't have the resources to serve those customers. Then maybe it becomes a good tradeoff.

You definitely don't have that in the beginning, and most companies never experience that.

I used to drink the koolaid, I applied to YC multiple times. I'm still trying to start stuff on the side of my day job, but I no longer apply to YC and fully intend to bootstrap a smaller but profitable software business.

To add, VC is for when you have a market that is large enough to pay off their investment with something left over. There are a lot a business opportunities out there that only can return a million per year and they won't scale. This isn't worth VC time, but if you can find one, a million - overhead is still a nice income for you the private business owner. Just remember that as a business owner you need to watch the bottom line, many small businesses go under because they don't account for all the costs of running a business (both time doing bookwork instead of what the business is about and costs of supplies)

Yes, this is a great point

> I think the bigger issue is that most of the financial upsides of startups were illusory

I wouldn't say I'm an old-timer by any metrics, but even back in 2012 when I first discovered and joined HN, I remember it was pretty clear in the community (and people I spoke to around me) you shouldn't go to work at a startup if you were looking for "a lot + safe" money.

Sure, you could belong to the 0.001% and work on the next Dropbox, but most likely you would end up not, so don't start at a startup to chase riches, as there are better venues for that. Do work at a startup if the environment/mission/team feels right to you, but with no expectations of a big payday-exit.

Technology is inherently a domination force and you can see this invisible domination battle between technology startups all the time.

Have a moat* or get exhausted battling against other similar startups until one is the major winner.

Technology is the easy part (for most people) Winning the battle is the hard part.

TO summarize, win battle=big-payday

That's assuming "Winning" means "More money", but that's not everyone's goal in life. There is plenty of space for smaller companies that earn enough profits to let every employee live a good life, without chasing unicorns.

Correct, but if you're interested in that, you start a regular small business, and you take a loan from a bank for seed capital. Venture Capital will give you much more more money and ask less questions precisely because they expect you to go for world domination - and they expect corresponding returns.

You don't reach for VC if you just want a lifestyle business, much like you don't reach for mafia money just to pay down your mortgage earlier. You have to know who you're getting in bed with, and what their expectations are.

This is called a "lifestyle business", which some people get very annoyed about. And as mentioned you can't get VC for this model.

I think a lot of people get annoyed (probably including myself) because the term sort of implies that there's great work-life balance which definitely isn't the case with a lot of small businesses.

Actually, what I was referring to is just called "company" or "business", or at least used to be called that.

I understood "lifestyle business" to be a company that tries to be adoptable to the lifestyle of the founder/owner, but maybe I understood it wrong or it changed.

Here's a question: what's the list of startups fitting the criteria of

- after 2008 Great Financial Crisis

- actual startup, not spinoff from larger company

- financially successful exit

- early non-founder employees made a substantial amount of money?

GPT: whatsapp, instagram, airbnb, slack, uber, snap

Openai?

The slave isn't going to turn on its master ;)

No exit in view.

Fact check: almost totally correct, most founded in 2009 except Airbnb which was 2007. Interesting. Seems like 2009 was a good year for startups; I guess building at the market bottom is a good way to ride the market up.

Also coincides with the start of the app + REST economy

The gig economy at least in part grew out of a giant wave of unemployment.

There were also suddenly a lot of people without a home to sleep in, and suddenly a lot of homes on the market.

Basically, right after a crash is the best time to do anything.

Why the after 2008 foundatuon criteria. Someone who joined FB in 2010 could have got rich right? Same with Google, Amazon, most other unicorns that established before 2008.

Oh, it's somewhat arbitrary, but Facebook was founded in 2004 and by 2010 no longer counts to me as a "startup". I suppose 2010 is still pre-IPO (2012) and therefore has a chance for advantageous stock grants.

(Not lost in all this: over the years the tax treatment of option grants has changed! It used to be a hugely advantageous way of giving employees something of value, and that's been eroded a lot.)

Get rich in the sense of "decent salary, and HODL the company stock", sure. Get rich in the sense of riding that startup VC wave, no.

Amazon had north of 100,000 employees by the time I joined in 2012. The "plucky startup" days were long gone, even if they did still tell the fable of the door desks at every orientation class

Solidfire (which never got talked about at all on HN) fits the bill nicely.

Everyone has a different interpretation of "substantial", but I'll say Nest.

If you look at the companies that went public from 2018-2021 (boom/tail end of the latest "bubble"), you should assume that all of those generated somewhere in the range of 25-500+ non-founders who cleared $1m+ worth of stock pre-tax (a small-mid cap SaaS will be on the lower end, Uber/AirBnB will be at the higher end).

It's harder to know from acquisitions, but I'd guess that most of those with sale prices >$1b generated ~10-250 non-founders with $1m+ share packages. I think that the Qualtrics founders said that they minted 250 millionaires from their initial sale to SAP.

The thing that puzzles me is the early "only eating Ramen and pulling all nighters" startup founder story. I suppose nobody believes this anymore, fortunately.

I mean... we all agree, it would seem, this is not the path to getting rich for most people. And it's unhealthy and stressful, so it's also not the best way to work.

So it has to come down to "the mission". You must be doing something so amazing, so innovative, a boon to mankind, that all else is secondary and you're willing to endure financial risk and a stressful job, right. Right?

But no. Most startups' products are unremarkable or banal -- with some honorable exceptions -- and mankind doesn't really care either way.

“The mission” isn’t the only meaningful drive.

It is hard to build a successful business out of even a most mundane ideas. That alone can be a great accomplishment that many people strive for. Also to be able to set and execute initiatives is also a great motivation. Seeing the fruits of your labor can be very rewarding.

Or you think you’re special. You know it’s risky and many people fail, but you’ve got the right idea, intelligence, work ethic, etc. It might even be true sometimes. I’m sure success isn’t randomly distributed. The trouble is figuring out if you really do have it or if it’s self delusion.

I'm not saying it's completely random. It's very likely a combination of skill [1] and luck, with luck being the bigger factor. So even if you're "special", you're unlikely to make it.

[1] And possibly contacts, or safety net, or wealthy family and/or friends.

I think there are special circumstances where success, while far from assured, is a lot more likely than usual. Apple and Google probably had decent odds. (Where “decent” here means something like 10%.) But they’re really rare, and honestly and correctly evaluating whether you have an opportunity like that is really hard. I think that’s why a lot of people do startups, anyway.

I saw the same posts you did, but how many people actually listened? How many, instead, came back later asking how to salvage a situation that didn't match the dream?

There are always cooler heads raising alarms on these booms. What turns them into bubbles is the inflection point where there are more people coming for the dream than for the thing that motivates people who understand the risks and know the statistics.

I seem to remember 2015 or near it as that inflection point. Tech media went from worrying about the steady march of unicorns to not talking much about valuations.

It's so nice to see my homeland is famous for something! :-) Zimbabwe Dollars FTW. I have 500 billion dollars in a cupboard somewhere BTW.

Sorry, I do love Zim really. I was looking for a metaphor that non-history nerds wouldnt confuse. Papiermark would have been better, but needed explaining.

Germany’s worthless currency got overshadowed by subsequent events, so I suppose there’s something to be said for Zimbabwe still being notorious for this.

I have the $100 trillion dollar iirc.

I've had one successful exit as an engineer. Made enough for a (very) fancy dinner for two, or a short city break. Just a fun bit of pocket money, essentially.

Founders made more than I'll probably earn in a lifetime.

Usually, the only engineer who has any chance of making a significant amount of money is the technical co-founder, often called the CTO.

The rest of the money belongs to the MBAs and the bankers. It's always been their money, it will always be theirs.

Yes, that's probably true. Investors, or people who take a risk, get the payoff from the risk. If you join as a salaried person, you're taking zero risk (other than that you might need to get another job if the place folds, but then all the money's gone anyway), as you're just getting paid a salary each month regardless of how the company's doing, so you don't get an outsized reward.

Generally this is not true - the "risk" taken by these people is very small, because of how wealthy they or their parents are.

If I had $1M and lost it, I would be devastated.

If I had $1B and lost $1M, it would be a rounding error.

I don't have any money, so how do I even get to $1M? And neither does my parents.

We're not talking about that kind of risk. It's just a synonym for the amount somebody is going to lose if the company fails, regardless of what the amount means to them personally.

VC invests $1M in a startup, they are risking $1M. You just work at a company, get paid every month, and don't buy any stock, you are risking $0. That's all.

If the company does well and the VC makes $5M back, it probably won't mean much to them, either. But that's how the contract was written, because the company needed that $1M.

Yes I understand this. My point is, what “risk” are the investor class actually taking? Not much, because they have enough to hedge their bets many times over, while a salaried employee can’t even be in the game. They simply can’t afford one measly chip.

The risk of investing time in a startup is in the lost opportunities (ie. opportunity cost). It can be dollarized with discounted cash flow as an approximation. Could you earn more at a large company than at a startup? What are your options? Do you even have better options? How high and how likely must the "lottery ticket payout" be to break even? And don't forget the time value of money: How much could you gain by investing the excess money during those years?

Time is the most precious resource we have. It's per-se underrated whenever it's dollarized. Unfortunately, most don't have a choice than to sell their time for money. Thus, it's even more important to spend time wisely.

Thinking, you don't risk anything because you don't spend money on a startup is wishful thinking. Or more likely: It's just a good story VCs and founders like to tell, because it's in their interest.

There are opportunity costs no matter which job you take, from startup to FAANG. So of course this is assuming that you joined the startup after carefully considering other employment options, as you absolutely should. No disagreement there. :)

During the dotcom bubble, me and my buddies often said, "We could be thousandaires!"

"Sell for half a billion and get nothing (2021)" https://news.ycombinator.com/item?id=39598903

This looks exactly like the story that convinced me I would never accept a loan with the preferred stock bullshit. Except the year 2021 is much later than when I decided that.

> The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way.

Or the startup was a stepping stone in your career. Big Tech wouldn't hire you, b/c you have a different background, so you work at a startup to develop experience and then switch to Big Tech.

Then go from a CTO to an L4 at Google.

and that’s a good thing! As you get a little older and your life needs more stability (oh no I only make 400k at my 9-5)

I mean yeah kinda. But the skills for a startup map poorly to big companies.

Startup: you look at something, plan, execute, learn skills as you go. Big company: here is x, do as I say. You must use these things from these teams, don't make it yourself.

Coping with the step down in responsibility is hard. Going from owning the entire stack to not even having a real decision in planning is very hard to deal with, especially if you've done that $thing before, and have to mount effectively an election campaign to change direction.

The mindset change isn’t that different. This is just part of the experience of growing and maturing in your career.

I think people with startup backgrounds in big tech tend to hustle harder in their careers than people that were “born” in that environment.

I can see your point of view, but I gently disagree. This is based on my own experience.

Being able to see, react and change based on changing business goals was the key to my career success. Being able to talk to decision makers and get something in place to mitigate risk/take advantage is a key thing in buisness.

Going from being able to do that, to not even knowing what the business goals are, much less getting access to any kind of decision maker is a tough change. Its like having the scope of a CTO and then going to a scope of an intern. You feel infantalised.

> The only realy reason to join a startup is that you either believe in the "mission" or that you believe it will bring you joy to work in that way.

If the goal is economic security (FU money) then the quickest path is to get a job at a big tech company. This requires engineering skills and also the ability to play the various corporate games (ugh).

For the rest of us there's entrepreneurship and joining startups.

But there are plenty of "startup games" to be played at startups. Maybe slightly different to corporate games, but also unnerving.

Having done both for a long time, I have to agree. However, generally, there's more choice as to whose games you want to play with startups. And being a startup with limited resources means there's only so many games that can be played before the noise overwhelms the signal and the company goes under (essentially a self correcting effect).

At big companies with lots of revenue the shenanigans can become fortresses of crazy (cough Google cough) that can go on forever.

It's almost like the people that have control of capital set up a system where they never lose...

I've worked at a few startups now but never do it for the equity. I do take equity, but as far as I'm concerned its more a signal that I'm "invested" and have a stake in the game.

I work at startups because I prefer the type of work generally found there. I like smaller teams, I enjoy having to learn new things, and I (usually) enjoy how quickly projects and direction can change.

For anyone considering a startup I'd say to just consider equity a lottery ticket for a decent bonus. It will probably not amount to anything, and it probably won't be worth what many expect, but it can be a nice bonus if you like the job and team regardless of an exit.

> predatory VC/backers using convertibles/senior debt to turn your equity into Zimbabwean dollars

Liquidation preference!

I'm a little older than probably the average HN visitor, but I bet my experience matches a lot of peoples:

Mid 90's startup: Sold company, proceeds company covered debt, basically. I learned a ton on those 2.5 years, but had to have a part time job to make ends meet (and I was not living a lavish lifestyle).

Late 90's - Mid- 00's: Partner in consultancy that made generational wealth for at least one client, worked to burnout multiple times, never able to use the consultancy to develop a product with ARR. Made good profit share and salary the years prior to dotcom bust. Company was sold for basically the debt on the line of credit.

Mid-00's - Mid twenty-teens: Joined a "startup" that was really a consultancy. Spearheaded substantial growth, Shareholders just increased the dividend amount every time company grew year over year. Unable to negotiate an equity position that aligned incentives (me giving up my life and energy to further build the business) so I left. I was forced to surrender the equity in another startup when I quit the first one. The other start up is limping along, I think losing a (manageable) amount of money annually. I never valued this equity because the shareholder group was the same as the parent company, so this one had the same issues.

So I guess in a 25 year period I had something like 2-3 exits. I worked more than full time between 1998-2015.

I'm now a firm believer in that a successful exit takes knowing the right people and getting lucky.

The best reason to join a startup is to learn how to create a startup. That’s the main thing you won’t get at a FANG job.

I guess even if, and that’s a big if, a founder agrees to give an early employee Class A shares (I guess that would be the top tier, wouldn’t it?), even that could be turned into nothing, wouldn’t it? Unless you’re already rich enough to be able to legally stand up for yourself.

Even class A shares are given in the form of options? Such that even to make it yours after a certain period (usually after leaving) you actually have to “buy” it and then pay taxes on its fictitious price difference.

I have come across ESOPs just once from an American startup (but I worked in my home country) and the whole thing just shocked me. The price used to change as if someone (Board? Banks? Founders?) woke up and just threw a dart on a number chart and that became FMV of that day! Even when there’s no funding round or so!

If you join early, got plenty of stock options and the startup turns into a unicorn, those millions are totally possible.

Until then, naturally, it's all paper money. A bet. Maybe an investment, of your time and effort.

The majority of startups fail and the majority of startups having an IPO will not make anyone rich via stock grants.

It's definitely a safer bet to find a high paying job in a stable company.

> If you join early, got plenty of stock options and the startup turns into a unicorn, those millions are totally possible.

GP comment argues correctly that there's no guarantee that employee stock options will return a profit even in the case of successful exits. Valuation multiples, senior debt, clawback options (see Skype exit [0]), fractional stocks being rounded down to zero after stock splits have all been implemented successfully by startups and VCs. I wouldn't invest my time, which is very precious compared to my capital, into any company that is managed by someone I don't know personally. I would rather earn surplus money to invest into high risk high return options. Treat startup equity as a lottery ticket and don't pay too much for one.

[0] Skype options turn out to be worthless. https://news.ycombinator.com/item?id=2692985

This is why I joined AWS 9 years ago, and left the startup world. I own (still?) 15% of a company as a founding engineer (with no voting rights). As part of a raise, the company sold its IP to another company for a 0.5% stake in that company. So now I own 15% of 0.5%....... I just didn't understand the business side of all this at the start. As I understand it, the raise wouldn't have happened and the original company would have folded if the deal wasn't done, so you can't really argue fraud.

Since then, I have seen similar things happen more than once to other friends. I can only imagine that as the number get larger, the problems become more complex.

15% of 0.5% of a billion dollar company is just over $700,000. That's not FU money, but that's a down payment on a 3.5MM home.

My other option was AWS though. That $700k is like 4 years of effort, and I get vacations. Actually realizing a sale on a billion dollar company after 4 years is just incomprehensibly low. TBH Amazon is also less work than running a startup. If you think AWS oncall is bad, think about having even less people on your team to handle the load, or to build the product durably in the first place :)

Also, I have no way of knowing if the same ownership thing is going to happen again. Giving me another 0.5% of the above calculation. Sure, lots of people make millions in a startup. Way more people make millions, although over a longer time span, in tech companies and index funds.

> If you join early, got plenty of stock options and the startup turns into a unicorn, those millions are totally possible

That's the thing: there's literally no business idea in most startups beyond "sell to the highest bidder at 1B+ valuation". And the rest are hoping to coast on unlimited investor money.

That's it.

There are no business plans of, you know, building a sustainably profitable company.

For me the better question is: Why is anyone with enough money to invest in startups not just investing that money in a safe index fund or real estate instead?

Gambling is an addiction :)

Also, if you manage to get rich, you can afford more risks... in the hopes of getting even richer

> Also, if you manage to get rich, you can afford more risks... in the hopes of getting even richer

I lacked the empathy to consider it from that perspective.

I guess "Even if I got rich, I would play it safe." is just my poor people scarcity mindset instead of an abundance mindset.

> I lacked the empathy to consider it from that perspective.

It wasn't my original idea either :)

> If you join early, got plenty of stock options and the startup turns into a unicorn, those millions are totally possible.

lets take this bit by bit.

First, you need to have a decent % of the company. At each raise your share of the company will dilute. So you might have 1% at join, but by series d its been diluted in % as well as seniority.

You reach unicorn status,but the company isn't making money. So it might take on debt.

Eventually you then IPO. You either have your options converted to real stock (for a fee) and a covenant saying that if you leave before x, you'll have to hand back those shares. or if you are lucky you might be able to sell after say 6 months (super rare)

so after n years, you are able to sell your 10k in ordinary shares.

But in 2024 there were 21 IPOs. The chances of IPO are vanishingly small.

I wonder if part of the issue isn’t the startup world but the corporate world. There’s enough capital and anti competitive practices at big tech companies that startups are fighting for scraps. I would love to see a new movement to reshape antitrust laws and improve competition.

>> Dodgy accounting & staff retention meant that actually you don't get fuckyou money.

The insiders get rich via salary, bonus, benefits, and looking for their next job while they are on startup-expensed conference tours, paid forbes articles, and company-sponsored fellowships.

Another reason to work at a startup is if you have subpar grades and the company is willing to take on a risky hire (and pay peanuts for the risk). An alternative for those who don't have the option of working for MANGA. Speaking from personal experience :)

Are you able to say more on your startup story, through the exit?

This reason I think more than any of the other reasons stated is the cause.

Once the financiers took control and ensured they would reap the majority of the rewards, the risk/reward ratio was no longer there for many workers who gravitated towards big-tech instead.

Now big-tech is pushing burnout culture hard, and with higher interest rates limiting capital investments from VC's I wonder if we will start to see movements of people away from big-tech to more traditional startups again in the near future?

AI startups I believe are already showing this trend away from big business (and even away from their own 'big business' towards smaller startups within AI), but that probably falls more into the group that "believe in the 'mission'" as you point out.

>Dodgy accounting & staff retention meant that actually you don't get fuckyou money.

What is fuckyou money at this point? Take the Mega Millions lottery jackpot, it's default is $20 million nominal. You get cash payout instead of annuity, now it's about $10 million. Maybe you live in a state without income tax (I do), but the feds get their cut, now it's $5 millionish. You look for a nicer house (been living in an apartment)... and, since you don't want to lose it to property tax arrears all that quickly, you budget for that too for the next 20 years. How much house can you afford? Turns out, you're getting at most some upper middle class home in a second class city. Maybe with a nice car in the garage too. No live-in maids and chefs, no 40,000sqft mansions with indoor Olympic swimming pools and gold-plated toilets.

Hardly seems like fuckyou money at all. I think while we weren't looking, inflation snuck in and changed what fuckyou money actually was. You basically need to not just be a multimillionaire anymore, but a sub-billionaire.

My definition is very different. It is about my ability to have control over my life in the areas that matter most to me. I value my time and personal development above material wealth (to a point). I don't need a giant house. I don't need regular fancy vacations or to own a car. I personally have been not working and living comfortably on much much less than 5mm in a high cost of living city for over five years. I do have to make many tradeoffs but I am happier than working a soul sucking job. It's not a path for everyone.

>I value my time and personal development abov

That's a young man thing. Still trying to grow, to attract mates, etc. It switches (at least for those who develop correctly), to be able to provide for offspring and descendants material wealth is key.

>I don't need a giant house.

Perhaps, but we were talking about fuckyou money. Living in a crackerbox isn't an indication or test of fuckyou money... if Warren Buffet drives a beat up pickup truck, he's not interested in signalling fuckyou money. But he could also drive 31 different Ferraris, one for every day of the month right? My point was that fuckyou money has changed, and that by any measure even lottery jackpots aren't really fuckyou money anymore. Those are "yay, we get to send the kids to college without them being debt slaves" money. It's a strange world now days, that didn't used to be the case.

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