Some personal numbers, from 4 years at a SV startup (now at a larger company, couldn't take it anymore)
Over four years:
Total compensation: 80K (10-99) Debt: 8K Credit Card, 25K IRS Equity: ~1% (worthless probably, at most 50K)
Not worth it.
Over four years:
Total compensation: 80K (10-99) Debt: 8K Credit Card, 25K IRS Equity: ~1% (worthless probably, at most 50K)
Not worth it.
Seriously... the only thing I can come up with in my head is greed. You told that you would eventually receive this huge payout and that clouded your judgement.
Yes, he did something phenomenally stupid, by taking on the credit card debt and (much worse) the fucking tax debt (the IRS are not nice people) on behalf of any startup, much less one where he wasn't a founder. Bad decision. He seems to have learned his lesson.
That said, he deserves a fuckton of credit for having the courage to talk about it. Most people sweep their career mistakes under the rug. This guy has the guts to come out and talk about something stupid that he did and I commend him for it.
These second-circle startups that underpay egregiously, are sloppy with paperwork, and continually promise that "funding is just around the corner" may be more common than the VC darlings (which are pretty ethically sloppy themselves, but more prestigious on account of selectivity). They don't get much press because few people ever admit to having worked for them.
I've done similarly stupid things. Why? Because I was young, didn't know what I was getting in to, was easy to take advantage of, and got played.
Social class and access play a major role in this. Someone from Stanford is going to know not to take $2000 per month working for a smooth-talking douchebag who "knows investors" and "just needs a programmer". Some sharp but naive 21-year-old kid from Indiana who moved to California not knowing anyone? That's exactly who the douchebags prey upon.
There's a huge underclass of shoestring startups, most of which you'll never hear of, paying $2-5k per month, with some zero-interest deferred-cash arrangement and equity that is impossible to valuate. They run on some small amount of angel funding (often month-to-month) but never get to the point where they have enough product to get an A round.
These second-circle startups occasionally hit the first circle (great product, fortunate connection) and can get funded, but the odds aren't great, and you should never work for one as an employee.
I worked for one, at one point. I took the CEO at face value on his level of connectedness, so I believed that funding (and full salary) was "just around the corner". What he didn't tell me (and what took some research on my part, that I should have done sooner) was that most of his bridges were burned and that a lot of his connections were irrelevant to tech startups.
If you're saying that you made $80,000 for each of those 4 years...then you deliberately lived beyond your means and you deserve to have the tax debt hanging over your shoulders.
Also, if I understand his post correctly, it seems like he was paid as a 1099 contractor the whole time but received equity and operated like an employee. There's likely something highly illegal about that (on the part of the startup), but it's not worth going after them because I doubt they have any money.
[1] http://www.bankrate.com/calculators/tax-planning/1040-form-t...