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Comment by hemantv | Hacker News Reader

Startup need to spend so much on other things because employees are not working 100% on making company a long term success. They are just doing yet another job.

Reward employees with good amount of equity, so that everybody long term interests are aligned in success of the company.

I don't see most startup giving meaningful equity, so they have to compensate with all of these perks and high salaries.

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The first part of this statement sounds like speculation, and the second part sounds a bit like Voodoo logic, no pun intended. There are many factors that will attribute to an employees stock in the company, and I'm not just referring to 'company stock'. Equity is an entrepreneurs best friend, and as such should be treated little different than a savings account (Rarely touched: with exceptions of a rainy day, or if something exists that you REALLY REALLY want/need e.g. a specific Employee) as opposed to monopoly money, where it is spent till the original owner has none of it left. If the company starts to award every employee high yields of equity, it hinders an entrepreneurs ability to leverage the companies assets to possibly position it's longterm stability. This is why there exist so many 'perks and high salaries', and they work... for the most part. However, to imply that these perks and high salaries are falsely impacting an employees investment at a company for long term duration's seems a bit of a stretch without data points, perhaps Hacker News should strike up an Anonymous Poll to find out if such claims are true? I will speculate that for some it is nothing more than 'just another job', but for the right person, it can be the right job. Thus, perhaps the solution isn't necessarily in an excessive amount of equity, or bloated perks, or high salaries; perhaps the true solution is taking the time to find a candidate that isn't necessarily as skilled as they could be, but over compensates by possessing a fervor of desire? If that is indeed the appropriate conclusion; isn't that in other words what Y.Combinator is all about? The ability to find individuals in the most unliklyist of places with a will and a heart to attempt what may just lie out of their reach, helping them grasp what once was only the impossible? It is people like this that attribute towards a companies long term standing, and without them, fulfilling the founders end goal will be much more difficult.

I'd recommend paying the going rate for your staff in any case.

Equity doesn't make up for a lower salary in my view. It makes up for the inherent risk in working in a startup (things might not go well and you might be out of a job in a year).

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