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Comment by kristiandupont | Hacker News Reader

>Equity = compensation for taking the risk of working at a company with a high chance of failure

But if you are getting a normal salary, what is this risk?

You're probably drawing lousy benefits and a no-frills 401k with bad funds. Plus the bonus of having to figure out when the payroll dollars run out.

I worked at a startup where towards the end before their buyout, they weren't paying the phone bills, and their core profit center was a call center. When you work in that situation and trying to troubleshoot downed circuits, which turn out to be shut off for non-payment, that's some serious stress.

Right now I work for a government org with some really awesome technology challenges. Plenty if politics, but also security and ok pay. I'd rather have a constitutionally protected pension and startup+ pay than startup pay and no equity

It is much more likely the startup will fail than an established company. Consequently startup employees are taking a greater risk than established company employees. This, however, isn't really reflected in salary and is instead reflected in the lottery ticket/equity grant.

And just to add: my view is that at a startup, "market rate" is too low, even with equity on the table (to a certain extent--if it gets to double-digit equity my opinion is the negotiation isn't about bringing on an employee so much as a legitimate co-founder) especially given the broad responsibilities early employees are tasked with and the high likelihood of failure.

That is a bit shortsighted way to look at value added for being part of a startup. Experience and an elevated role can increase earning power regardless of the start-up outcome.

You're assuming this evaluation is from the point of view of someone early in a programming career. If you've already got a bunch of experience, and had elevated roles, the cost benefit analysis is going to be different.

I think you're either overestimating the value of experience and title gained at a startup, or undervaluing the same at established companies, or possibly both.

Having a role at a startup doesn't automatically imply useful experience has been gained, or that the specific position and duties are somehow more solid than equivalent roles at established companies.

It's the risk you'll be out of a job in three months when the seed funding runs out, right before your benefits kick in.

That you can lose that job all of a sudden.

Increased risk of losing your job.

Right, but for engineers working in startup hubs, is that really a risk? You can pick up a phone and have a parade of offers on your desk in a few days.

At most your risk is missing out on, say, a week's wages between jobs.

There are many of us on an H1-B here potatolicious. Technically I get 10 days to wrap my affairs and leave the country, not to mention losing any greencard application...

I'm also on a H1B, transferring one is trivial, though you're right that green cards make it more complicated.

You may loose your job at start up at the most unfortunate moment. In 2000 you can find 10 jobs in about an hour, in 2001 you could not find one job if you life dependent on it. Big companies do layoffs too of cause - but probability to be cut is lower and they almost always offer generous severance package. Also your personal circumstances may make lay off extremely inconvenient - for example right before child is born or you have medical emergency.

You should definitely get some premium for this risk - how much is open to interpretation.

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