Ask HN: I am a startup employee "getting screwed" by offshore talent

Sounds like you learned all your lessons in one go. Well done.

Never take a pay cut in exchange for lottery tickets. Check. Never take a pay cut in exchange for a vague promise of returning to your real rate later. Check. Never let anybody position your market value in the context of what another developer has negotiated for himself. Check.

You got all that out of the way in the first year. Time to move on to that better job that pays you in money. Bet you'll never make any of those mistakes again.

Good luck!

1. Note that an effective salary cut of 50% means you can double your salary with a new job.

2. The single most effective way to get a salary raise is to show how much you're worth on the market, ie, get an outside offer. Use this tactic carefully.

3. My unscientific method is to value stock vesting at Series A companies at 40% of face value due to them being high-risk assets.

Worth to VC = 1% / 4 years vesting = 0.25% / year * $12M = $30k / year.

Worth to you, adjustment for being a high-risk asset: ($30k / year) * 40% = $12.5k / year.

That's how much your equity is worth, maybe a bit more since you have additional traction.

Thanks a lot, interesting reading!

"That's how much your equity is worth"

On the other hand, if the company never becomes successful enough to go public or be bought by a larger company, your equity is worth zero.

As for what to do: I agree with the people who say look for a job somewhere else. They've already lied to you about bringing your salary up to market rate, so why should you trust them to look out for your best interests in the future?

I really don't understand the thinking that %1 equity should have anything to do with salary especially after the company raised some money. That %1 is compensation for the risk you took joining a company with a questionable future... pretty much every new business by the way - even one that raised three million bucks. The only way you should ever, ever earn less than market rate is if you are a founder with a founder level stake and control in the company. Call it 10% or more... and even then it's a bad idea not to pay founders after raising capital. People who are worried about their bills are less effective. So yeah, I agree with samt in this thread "Either double down and ask for a shit-ton more equity, or quit and find a better job. Life is too short."

edit: You are not getting screwed by offshore talent you have already been screwed by the founder :)

> with the "very vague" promise

So it wasn't in writing. Therefore it didn't exist. Writing has a memory that promises do not. Everything jasonkester said.

I would merely add that anyone who makes promises, vague or not, but won't commit them to writing has precisely no intention of keeping them. Full stop. They might decide to keep them at some point, because they're feeling magnanimous or something. At the intersection of "make promise" and "refuse to document", they're telling you "I want the flexibility to not keep my word without consequence and I'm betting you're gullible enough to believe me". And if they say something like "we're doing this on trust and trust is important to our success" or "there's no need to bring a lawyer into this", you are rapidly approaching a 100% guarantee of getting screwed.

Either double down and ask for a shit-ton more equity, or quit and find a better job. Life is too short.

First, determine what leverage you have.

How essential are you to the startup's success? (how much would it cost to "replace" you). This might be higher than you think .. they may need a couple engineers physically in SV.

What % of your equity is vested? With standard terms, I'm guessing 1/4th (so 0.25%), unless there is a cliff longer than a year (which I've never seen).

How likely is the startup to exit in different scenarios: acquihire, bought for user base, bought for product, or IPO. How likely are each of these scenarios?

Just remember, this is a pure business decision. Don't worry much about "loyalty", "promises", "reputation" etc. If you're seriously good, these things don't matter much. Simply calculate the likelihood and payout for the possible decisions and then pick.

That's how good founders should make decisions and how good employees should make decisions. I wouldn't hire people who didn't think this way, or work for people who didn't.

Have you already had a serious discussion about you being unable to stay if you can't get a fair pay rise?

I think your last paragraph says it all. I would find another job. Good luck!

What i would do ?

I would definitely start looking for a job elsewhere. If he believe that with the talents he has abroad at the 1/3 of your salary he can do what he wants, then you will soon be deemed over-paid.

Getting the raise will be extremely hard, unless you are really core to the company and they will be affected heavily if you leave.

I would start looking for another job that it will make you happy as well.

You shouldn't have a problem finding a job at this market but before you resign, communicate with the founders. Send them email telling them what your expectation was when you first joined the startup. Since the company is doing well right now, the right thing to do is to raise your salary to the current market. If they deny your request, just move on.

First, your math is way off. If the company had a valuation of 12M, 1% equity is $120k. 4 year vesting makes it $30k/year. Also, VCs get preferred shares, making your equity worth even less than $30k/year.

So, you were an idiot to take a pay cut of $30k or more for this job.

At this point, moving on is your best option. When you get a new job offer, don't take a counter-offer, just leave.

Echoing the points the other people made, never take a pay cut on the vague promise they will make it up to you later. That never happens. When you took the foolish pay cut, you established yourself in their minds as an idiot, and they will never properly respect you.

Fish or Cut Bait?

Areas to explore: Do you trust the Founder? Do you still buy into his vision? Does the Founder actively demonstrate that he respects you as a valued business partner, (even if you are junior)? Are you financially/mentally prepared to walk?

Before you bail-- suggest a serious one-on-one conversation with the founder. Get some clarity on where he is on growth plans and compensation. Also, it's fair to share with him exactly what your expectations are. Manage up, look for a win-win scenario. Friday afternoon is a perfect time for this conversation. Suggest you guys go grab a beer together.

Would recommend lining up other potential companies/offers before that conversation, in case it turns into a quick "thank you for your time" and being let go. Not necessarily as leverage for the raise, but as a contingency plan.

Get an offer letter from another company with fantastic salary, bonus, and stock options - Google is always hiring good solid engineers, and so is Apple and 300 other SV companies.

Once you have good offer letter then go to your CEO for a 'man-to-man' talk.

If he has any ounce of courage then he will match the offer or it will be your last day at work.

Good luck!

Just as a datapoint: raising their next round might be easier if they have a CTO in the US. You could be that CTO. But also, look for another job.

run