Options vs. Cash - <AUTHOR> https://danluu.com/startup-options/ <comment><USER3> "If you look at companies that have made a lot of people rich, like Microsoft, Google, and Facebook, almost none of the employees who became rich had an instrumental role in the company's success. "

100% false.

<comment><USER4> This article[0] from almost 10 years ago estimated that the Google IPO resulted in 1,000 people having more than $5 million worth of Google shares.

So I guess it hinges on how you define "instrumental" and "almost none". It's a tautology to say that "instrumental" means "they contributed to the effort", so I would say "instrumental" means "it seems like no one else could have done it" and "almost none" means less than 5%. If you had to take a wild guess about Google, what percentage of that 1,000 would you estimate were instrumental? Furthermore, presumably there are more Google millionaires now, 10 years later. I wonder what percentage of those were also instrumental in Google's success?

[0] [http://www.nytimes.com/2007/11/12/technology/12google.html](http://www.nytimes.com/2007/11/12/technology/12google.html)

<comment><USER5> I am not sure "it seems like no one else could have done it" applies to Nobel Prize type discoveries or Moon Landing like feats of engineering, much less to software companies.

Don't get me wrong, I don't mean to say that many employees at companies like Google are not brilliant or not extremely effective in their work, but "no one else could have done it" is a useless test that relies on mythologizing people. The way I figure out, the people getting rich (as employees) are those that: a) took the risk to get in early enough, b) performed their jobs competently enough to stay long term and to give the company a chance to succeed, c) got lucky enough in that all the imponderable external factors also resulted in that particular company succeeding. That doesn't mean they weren't "instrumental", in the sense of being the people who actually happened to get the work done. But that's different from "irreplaceable".

</comment></comment></comment><comment><USER6> I started off once thinking "yay, X% means I get X% of the company!" and then I found out the shares can be diluted. Then I learned "non-dillutable".

Then I learned about vesting periods, windows for exercising options, and a whole slew of financial terms and devices; each one seemed to come with its own unique "gotcha" that, if you didn't know about, would cost you nearly everything.

Everyone I talk to about these always says "well, don't do that one thing, or if you do that one thing be sure you do it in this way and you're set". The cumulative knowledge you need becomes pretty high pretty quickly though, and the chances of me doing the right legal and financial incantation at the right moment becomes lower.

Nowadays I go with cash. I don't get 'golden handcuffs' that hold me to a job I don't like because it might pay off later. I can calculate the expected value and risks with cash without tons of research. I know my legal recourses if I get screwed out of cash.

<comment><USER7> _> "yay, X% means I get X% of the company!" and then I found out the shares can be diluted. _

There seems to be a common misunderstanding about dilution.

Dilution is not really the issue. In fact, dilution is a _positive sign_. It means more investors value the company and want to buy into the ownership.

How do current owners who collectively own 100% of the shares "sell" _more shares_ to future owners?!? By way of dilution. That means _everybody gets diluted_ including the founders, the angels, the VCs, and yes the employees too.

More important than dilution is the shares multiplied by price.

<comment><USER8> I hear this argument a lot. Mostly from people trying to sell the idea of a highly dilutive funding round.

Sure, further rounds are a sign the company is doing well. The important word being "sign," they don't actually make the company more valuable (what the company does with the money they raise does). If you own a lot of stock, you probably already know if the company is doing well or not. In that respect, the round just puts a number on what you already know.

The math is simple. All things being equal, owning more % of a company == more money. To try to spin dilution in any other way is stretching the truth pretty far, and is rather manipulative IMHO.

<comment><USER7> _> All things being equal, owning more % of a company == more money._

The point is all things _are not equal_. To restate a sibling comment, dilution means you own a smaller % of a _more valuable_ company.

If it helps, think of "dilution == sell_equity". Dilution is the perspective of the sellers' side (x% - y%). Equity purchased is perspective of the buyer's side (investor's ownership goes from 0% to y%).

 _> To try to spin dilution in any other way is stretching the truth pretty far, and is rather manipulative IMHO._

Dilution explanation doesn't require "spin" nor mental trickery. It is the _natural side effect_ of how companies sell equity to grow.

E.g. Larry Page's ownership of Google Inc got _diluted_ from 50% in 1998 down to 16% in 2004. That smaller 16% was worth ~$3 billion around the time of the IPO[1]. If Larry insisted on _" no dilution"_, no VC would invest money to help the search engine grow and therefore, he would own 50% of a worthless company.

So all things _not being equal_ :

      50% of $0 = $0
      16% of $20 billion = ~$3 billion.

Obviously $3 billion is _more money_ than $0. Thinking that 50% is better than 16% doesn't make sense for companies that require outside investors to grow. Similar story for Bill Gates' dilution, Jeff Bezos' dilution, etc.

Let's imagine Larry Page had a different conversation with Sequoia Capital to match this misunderstood fixation over _" anti dilution"_

>1998: Larry owns 50% + Sergei owns 50% = 100%

>1999: Sequoia: "we'd like to buy 10% of Google Inc for $12.5 million"

>Larry responds: "Yes! Great! We need your $12.5 investment but keep in mind that both Sergei and I have anti-dilution clauses so our ownership both stays at 50%."

> Sequoia responds, "So you want me to buy 0% of the company for $12.5 > million? Uh, you guys are idiots"

Somebody in that imaginary conversation doesn't understand "dilution" or "equity" or simple math.

[1] [http://www.nbcnews.com/id/5033780/ns/business- stocks_and_eco...](http://www.nbcnews.com/id/5033780/ns/business- stocks_and_economy/t/google-founders-sitting-billion-stakes/)

<comment><USER9> Sure, but dilution without representation can be a big risk for a regular employee. You might get a smaller slice of a bigger pie, but it may also represents a smaller real-world valuation if you get diluted too far.

If you have no say over how much you're diluted (like most employees), you could be diluted away to nothing. You have no control. So you must calculate worth accordingly.

Is everyone to get diluted equally. No? Well then, calculate worth accordingly.

In addition, I thought the pie getting bigger was the WHOLE POINT OF HAVING THE SHARES TO BEGIN WITH.

<comment><USER7> _> You might get a smaller slice of a bigger pie, but it may also represents a smaller real-world valuation if you get diluted too far._

Show example math of how someone could get "diluted too far" resulting in less total value (shares x price) after an investment round that prices the company higher than before. If the total value was truly less, it means it was "down round" which is a different beast.

 _> , you could be diluted away to nothing._

Show how it is mathematically possible to dilute employee's 1% ownership in to 0% without illegal tricks.

When Mark Zuckerberg tried to dilute Eduardo (without also diluting the other owners), he tried to hide the reduced % via a newly created company. He got sued for the financial deception and lost.

<comment><USER10> It is a lot different if some of the founders/past investors have anti dilution clauses

</comment></comment></comment></comment></comment></comment></comment><comment><USER11> Working at a startup as an employee with the expectation your gonna get rich is a fools game.

Negotiate for the best deal on options you can get (I.e quantity, terms like early excercise etc) but treat them as a lottery ticket.

A startup is a good way to learn rapidly so focus more on the quality of the people you will be working with, technologies used, what your role will be, vcs backing it etc.

In the long run the network and experience you build from doing this will probably have a greater impact on your networth. Especially if you yourself want to start a startup.

<comment><USER12> I'm a founder at a high-growth startup in Mountain View. I always tell potential hires, "options are worth nothing until they're worth something. And, they may never be worth anything."

I think that's the opposite of the unrealistic optimism job candidates get. But I think it also helps set the stage for a culture of transparency and honesty very early. Even before that person becomes an employee.

I'm curios to know what HN'ers think of that explanation vs hearing only the optimistic case. Does it make you second guess the company prospects?

<comment><USER13> Taken literally, this implies comparing offers strictly on cash+benefits, which typically skews things in favor of large companies.

<comment><USER14> Benefits could mean other things.

Many of us will take less money for remote options or more say in product development.

At my last company I left a few months before they sold. Been wondering if I made a mistake not buying my options. I was finally able to get the final selling price. It was half price per stock than the options were valued at. Looking back I made the right choice even thought it feels like I missed an opportunity.

</comment></comment></comment></comment><comment><USER13> I know 100+ people from a dozen companies who've made $1mm+ on equity. None of my friends would write a post like this.

That said, valuing equity is complicated:

\- most offers include a healthy mix of cash and equity and benefits. Evaluate the whole package.

\- unless you can pre-exercise via 83(b), I generally avoid options. RSUs are fine and many companies are offering them. Clever hack: counter the offer with a demand that the company pay 2% of the cost of exercising for each month you're employed, grossed up for taxes.

\- watch out for illiquidity: whales often delay IPO which locks up employees. This compounds the exercise issue. Clever hack: counter the offer with a requirement that the company offer to buy back the equity at the most recent preferred share price, if the company accepts investment at a valuation exceeding $100mm.

Stay positive!

<comment><USER15> > I know 100+ people from a dozen companies who've made $1mm+ on equity. None > of my friends would write a post like this.

This is addressed in the post:

> Another common objection is something like "I know lots of people who've > made $1m from startups". Me too, but I also know lots of people who've made > much more than that working at public companies. This post is about the > relative value of compensation packages, not the absolute value.

<comment><USER16> How different are startup salaries vs public company salaries? Is that $1m at Public Company the total salary over a certain period, or is it extra salary on top of the potential salary at Startup Company? The quote seems to say it is extra (relative).

If I am supposed to make $1m more at Public Company over -- say -- a 10 year period, then that means my salary at Public Company would have to be $100k _more_ per year than at Startup Company. Is the difference between startup and public really that big?

<comment><USER17> Yes. Assume $300k total comp at Facebook/Google/Netflix for a Senior Engineer. Getting $200k at a non unicorn startup is very rare for a Senior Engineer. $180k is more often the cap and $160k is the norm.

And while $300k assumes fairly high performance at a top public company, it's certainly not the upper bound.

<comment><USER16> TIL. Those numbers are definitively higher than I would expect. Here in Norway the average for someone with a technical or scientific degree and 5-9 years of experience in private sector is 690 000 NOK [1], or about 80 000 USD. The 90th percentile for 10 years experience is 915 000 NOK or 107 000 USD. So for me the idea of making another 100 000 USD more at another company is quite foreign.

[1] [https://www.tekna.no/en/salary-and-negotiations/salary- stati...](https://www.tekna.no/en/salary-and-negotiations/salary-statistics/)

<comment><USER18> Those numbers are accurate for the U.S.

Possibly even a little low for the Facebook / Netflix / etc tier.

</comment></comment></comment></comment></comment></comment><comment><USER19> Oh look, the thing I should have read before joining a startup.

I left [large corporation], who had been paying me very well, to go try out the startup world. I found a cool local company doing something that sounded neat. I looked at the pay (better on a per-paycheck basis) and the options (better than the stock I was getting in the corporate world) and said "this is a great idea! If the startup succeeds, the options will be worth a lot!".

It's a great company with great people and I don't regret that, but the financial implications of the change are starting to sink in. I'm getting a bit more per paycheck, but on the whole I suspect my tax returns over the next few years will add up to less than I was making before, even if the startup succeeds.

<comment><USER20> > I'm getting a bit more per paycheck, but on the whole I suspect my tax > returns over the next few years will add up to less than I was making > before, even if the startup succeeds.

That sounds counter-intuitive -- why would that be? Did you have some expense you could claim at [large corporation] that you can no longer claim?

<comment><USER19> Most of the big post-IPO companies hand out stock on a regular basis as a bonus or a top-up to the actual pay.

The corp in question for me was Amazon. Around 1/3 of my pay (more some years) was in the form of AMZN stock that vested every six months. Stock, not Stock Options. No paying for it, no decisions, just boom, you now own X more stocks and how would you like to pay the income tax on that?

<comment><USER21> What's worth more? A $200K lump sum in 20 years or $10K every year for the next 10?

The answer depends on how much interest you can earn on the $10K/year. At around ~7% the $10K/year is worth more than the $200K in 20 years.

Your stock grants from Amazon are equivalent to the $10K/year, the options, if you get them, are equivalent to the $200K. The actual weighting is impossible to get precisely but the way you approach it can give you better accuracy than just comparing apples to oranges.

Good news, even if it's horrible, ~2 years is the typical employee tenure so you probably wont be there long. If you are and it's going to be successful you'll be able to renegotiate based on foregone comp at Amazon.

<comment><USER22> Even assuming a $200k payout after 20 years is a very optimistic startup outcome.

</comment></comment></comment></comment></comment><comment><USER23> "...compensation package has a higher expected value..."

Expected value is a good measure when you're summing over lots of instances, e.g. if you're a VC fund investing in lots of startups.

As an employee, where you're working for a single startup at a time, robust statistics[1] suggests that the median is a better measure of what you'll expect to make: you have a 50/50 chance of making more/less than the median.

More than half of startups either fail, or don't succeed wildly enough for options to be worth more than the equivalent salary.

(If you work for 5 startups in your career, the best measure might be "sample 5 startups and sum the options payout to produce a value; repeat that many times and take the median of the result." But that's a lot harder to intuit, and is no doubt closer to the median than the expected value.)

[1] [https://en.wikipedia.org/wiki/Robust_statistics](https://en.wikipedia.org/wiki/Robust_statistics)

<comment><USER24> Why take the median? For me personally all I need is one year where I make a couple million bucks. What I really care about for my personal financial position is either the sum or mean, because that's what hits my bank account.

<comment><USER23> Because you'll only work at a handful of startups in your lifetime. You will not make the sum / mean over all startups, only the ones you work at.

</comment></comment></comment><comment><USER25> Nobody would ever advise you to take a large percentage of your income and buy options or even stock in a single company in the hopes that that company succeeds enough to make you rich. That's gambling.

Being an employee of the company in question doesn't suddenly make that a good idea. It's an even worse idea since your entire financial future is tied to the company's outcome.

They should pay you _more_ to take that kind of risk.

<comment><USER26> It is indeed gambling. But it's an opportunity to buy a lottery ticket that has a much higher payout than one you could buy off the shelf. The odds may not be great, but if you happen to hit, the payoff can be very large.

</comment></comment><comment><USER27> This is an interesting way to flip the perspective, to ask why do startups think offers of options are enticing (as compared to just cash).

But for the potential employee, the advice remains the same; ignore the options when it comes to evaluating a compensation package (and only those who are informed enough to go "weeeeelll..." and have actual reasons for why in a ~particular~ instance they should do differently, should ever consider doing otherwise).

</comment><comment><USER28> In startups your risk is that 95% of the value of your labor goes into a pool of options whose underlying security (startup stock) never achieves any liquidity event. Also, you do have to factor into your analysis the fact that the tech giants also have options, which are likely not to expire worthless, and also have some upside as well, since they are listed on public exchanges. If startups thought more like Buffett "preferred holding period is forever" they would counterintuitively actually compensate employees with cash more competitively once they achieved positive cash flow (this actually seems to be occurring in a few companies, there are just too few positive cash flow startup examples for quality analysis on this front). More startup employees I know are actually just enjoying their work and salary instead of making a giant sacrifice on a longshot bet in exchange for work they don't think is sustainable. That being said I think what Bezos wrote about amazon's work ethic will always hold true "you can choose to work harder, longer, or smarter but in our case you can't choose 2 out of 3" \- paraphrased from memory. Ultimately startups and big companies are trying to design compensation packages that create maximum productivity and the best description I've heard of this is to "take the issue of money off the table". Hard to do that with under market salaries and iffy stock options.

<comment><USER29> Do you have a link for the comment from Bezos?

It would be good to get some context on what he said.

<comment><USER28> [https://www.amazon.com/p/feature/z6o9g6sysxur57t](https://www.amazon.com/p/feature/z6o9g6sysxur57t) "It's not easy to work here (when I interview people I tell them, "You can work long, hard, or smart, but at Amazon.com you can't choose two out of three")"

<comment><USER30> I don't understand this quote. Does he mean that you have to choose ONE of the three? Or that you have to do all three (which means his "or" is misplaced)? Or that Amazon.com chooses for you, rather than you choosing yourself?

<comment><USER31> He means all 3.

His "or" isn't misplaced, because it's a play on an existing phrase: "better, faster, cheaper - you only get to choose two." Meaning you cannot optimize on all 3 dimensions.

Here he is saying that Amazon expects you to excel at all 3, by providing a contrast to a known idiom that says you cannot.

</comment></comment></comment></comment></comment><comment><USER32> Options are a complex topic, this article gets a lot wrong.

1\. The base offer. Many startups pay competitive or close to competitive salaries + equity. 2\. The value of the options depends on your ability to pick the right startup and you believe that you can make a difference to the company. I have a friend who picked the right startup 4 times in a row. 3\. Stock options are typically priced at 25% of the last round. The reason this is possible via 409a valuations has to do with the differences between common stock and preferred. 4\. Issues with investors right impacting the value of your stock options are more problematic with later stage startups. Warning signs are companies that raised a lot of capital but didn't live up to their expectations. Those companies will often be under pressure to accept terms in later stage financing that could destroy founder and stock option pool upside. 5\. Venture Deals by Brad Feld is a great read to understand different investment terms. 6\. Yes you get more equity if you create your own company. Doing so is extremely risky, stressful and hard though. I'd guess that even with the extra equity, on average, you'll make more money working for one of the big companies. 7\. So in a nutshell, starting companies, joining early stage companies. It really depends on your ability to pick the right company and perhaps more importantly your ability to make a difference.

Well that, and a bit of luck :)

<comment><USER33> I don't think I have ever seen a startup offer a competitive salary/equity package here in the Bay Area for a software engineer. I have found that the best I could do is trade compensation for a good work-life balance since salary is not competitive and stock is so volatile for a startup, whereas at big companies salary often is much more in line with the market and stock has actual liquid value.

<comment><USER32> Interesting, I typically don't see that here in Boulder.

</comment></comment></comment><comment><USER34> What strikes me as odd given the USA's reputation as the home of the self made millionaire that the taxation of employee options is so broken.

Treating options on shares as Income when they are not is just stupid options are a high risk instrument that well be worth nothing as opposed to a higher sallery.

Why is there not a PAC made up of tech industry employees lobbying for reform of Federal and state laws and arguable tech employers should be doing this.

And I should point out that politicaly I am on the left here compared to 95% f the average HN reader.

<comment><USER35> The alternative is that the tax is entirely on exercise of the option.

<comment><USER36> It IS entirely on the exercise of the option.

Granting and vesting of ISO's are not taxable events. Exercise of ISO's is taxable under the AMT rules, but only if you are above the AMT threshold (admittedly, this is true for a lot of people)

If you're not hitting the AMT threshold, then you only pay tax when you sell the resulting shares.

</comment></comment></comment><comment><USER37> This is a very interesting discussion for me, as I'm about to incorporate a new AI startup and I'm thinking how to spend my own seed money.

The author's argument in the "Incentive alignment" section doesn't seem strong. "However, as far as I can tell, paying people in options almost totally decouples job performance and compensation." Is there any data to support this or just this author's feelings? Just because the masseuse from Google made millions, it doesn't mean that other people who did well, like their chief legal officer, business operations, and product management executives, who made $160 million, were not instrumental in its success. It just means that not all options were optimally allocated.

<comment><USER38> Exactly, this ignores where options are awarded for performance.

</comment></comment><comment><USER39> I'm treating my options like a free lottery ticket with not decent odds. That's it. They don't exist when I plan my finances.

I doubt this is optimal, as options can be evaluated to some extent and risk can be appropriately brought on and managed. But it works for me when trying to do math about my present and future opportunities.

</comment><comment><USER40> You don't have to over-complicate the analysis. The fact that they give you the options instead of cash is proof the options are worth less than the cash. This is Econ 101: bad currency drives out good as good currency gets horded.

<comment><USER41> Well, kind of the whole idea is that maybe they will be worth more than the cash in the future.

<comment><USER40> When a company gives you options instead of cash, they are making a bet with you that they can make a better return on the cash than you can. They are hoping they can convince you that _cash_in_your_hand_now < value_of_shares_in_the_future_, but in order for them to even consider making the bet, they have to expect that _value_of_shares_in_the_future < cash_in_their_hand_now_.

<comment><USER41> Yes, and things don't go as expected 100% of the time. Again, that's the whole idea here.

</comment></comment></comment></comment><comment><USER42> If you're having to debate in your head "options vs cash", then the answer is definitely cash. Because if the options were worth something, that thought wouldn't even come up. Also, companies where options are of actual value generally do not give you such a choice, they give you plenty of both (provided you are worth it), the objective is to retain you because you are valuable, not to pay you the minimum possible value by presenting tricky choices of "options or cash".

</comment><comment><USER43> Is there any way to nicely state that you're not interested in equity and prefer cash? I haven't found it. It seems to put off employers who think of equity as an incentive.

And I've met some fantastic companies who have done this, so it's not about bad employers either.

<comment><USER13> Yes, just explain that you have bills to pay, and while you wish you could participate more in the equity, you're at a point in life where you need cash.

Typically, startups have a mix of employees who are skewed to more cash or more equity.

</comment></comment><comment><USER44> This isn't my unique thought, I read it somewhere on the internet at some point where it was put much more eloquently, but it makes sense intuitively: The idea is that if you do enough start-ups, one (or if you're lucky, more) of them will "hit." I've been to a few rodeos at this point in my career. I've had one minor hit, and one big hit. It certainly worked better for me than if I'd worked for just cash. YMMV, but I will say not all start-ups are created equal. Sniff out the finances and product viability as much as you can before you join. I like the lottery ticket analogy because it's true that you're gambling a bit, I don't like the analogy because the odds are nowhere even close to the same.

<comment><USER45> Did you mean to say the odds of striking it rich are nowhere close to a lottery in a favorable or unfavorable light?

</comment></comment><comment><USER46> Would making secondary market accessible to employees after a cliff - i.e. 2 years - solve this issue of "lottery tickets" we hear all the time?

If we let employees access liquidity events by having the board organizing restricted secondary sales every year, then their options will have a higher probability to have real value?

After all, VCs have lot less risk than employees... We can't diversify our portfolio like they can. They want to invest their money, we want liquidity. Giving us financial flexibility would have only pros IMO and would be a powerful recruiting tool as well.

At my current company, I pushed a lot for employees to get 10yr exercise window extension, which we now have. Now we need to push to get liquidity. I feel like it is our responsibility as employees to keep things moving for a fairer future.

We help adding value to the company, I think it will be fair to be able to sell our options even if the company is still private.

There are also companies like Equity Zen [1] that help giving employees liquidity. I wonder if that is a good alternative too?

Basically if we can unlock the value of options before an exit, options stop being lottery tickets and everyone is happy.

[1] [https://equityzen.com](https://equityzen.com)

</comment><comment><USER47> Just week ago there was discussion about options and people shared this tool ([https://tldroptions.io/](https://tldroptions.io/)) to calculate amount of money an employee gets based on round and % of the company as options.

Despite the fact that in reality even in best case scenario the sum is rather small -- like 0.01% of a Series A startup with $1B exit will give you like $40K for your 6 year work -- more important issue is different liquidation preferences VCs get for their money.

So, each of many many VCs that invested in a startup by the time of exit exercises own liquidation preferences to scrape every possible dollar -- and in many cases disproportionately more than their fair shares of the startup due to liquidation preferences. As a result there is not so much money left to share among employees after all investors in aggregate get out their money and exercised preferences.

And this is best case scenario. So, a startup needs to have multi-billion exit for employees could make any real money.

<comment><USER48> If you join a startup immediately following a Series A and you only get 0.01%, you almost certainly got screwed. We were fairly stingy with equity, and an engineer joining then would have gotten around 0.5%, 50x what you're basing your math on. And over a 4 year vesting period, not a 6 year one.

$2mm ($40k x 50) for your 4 years of work is substantially less bad. And employees who stayed with us tended to get new equity grants over time as well.

So yeah, don't take a startup job for tiny amounts of equity. You should get significant equity for joining that early with that much risk.

</comment></comment><comment><USER49> I've never been a fan of being an employee at an early-stage startup. The options on average have close to zero value, the salaries are lower, and the hours/working conditions are worse [than at generic big company].

So now as a startup founder I'm thinking, why even give my employees options at all? Me and my co-founder are the ones that believe most in the company's upside, so the more shares for us, the better. The plan I've come up with is to 1) try and raise those salaries as best I can to market rates, with the added perks of flexibility, and 2) create a plan for profit sharing in the future.

Profit sharing agreements make more sense to me for a number of reasons. First of all, like equity, its value may never materialize. But secondly, there's actual liquidity and numbers behind it as a possible outcome. Also without the employee stock option pool, I can sell a bit more equity for more cash for better salaries.

What do people think of this idea?

<comment><USER50> "Me and my co-founder are the ones that believe most in the company's upside."

This compensation scheme will just select for employees that aren't bought into the future of the company.

</comment></comment><comment><USER51> Or here is a better one:

"Sorry we cant actually fulfill the contractural obligations we are (sort of) legally bound to fulfill, and cant pay you like we promised. So will you take a much smaller amount of money and a bunch of worthless stock options instead? By the way our stock options are going to be worth millions in a few months, so this is actually a better deal for you."

Its like some weird pathogen has infected the whole industry with this!

</comment><comment><USER52> > A company that gives you 1M options with a strike price of $10 might claim > that those are "worth" $10M.

I've had a perspective employer make this exact claim to me. I.E. that I could value my options package by multiplying the strike price by the number of options. I had to go back and clarify that, in fact, those options are worth $0 at the current strike price.

It's hard to see this as anything other than gross incompetence or deliberate deception at this point. Options aren't some new thing that only a few people are doing. Besides, if you're giving them out, you had better bother to learn how they work. I'm curious as to how common these claims are because it's pretty egregious.

(and yes, they were options and not RSUs)

</comment><comment><USER53> i think options do a couple of things: 1) they let employees invest in startups using their _time_ instead of their money, which is handy when you aren't rich and 2) they allow the company to have a legal framework around an IOU: take less salary now, bigger payout later maybe.

thought experiment: knowing everything you know about e.g. stripe right now, would you buy $100k worth of stripe back in ~2012? in 2012 it was a risky proposition to do so, but many people at the time understood why stripe was likely to be big and successful and invested money in it. i'd rather live in the world where there is a mechanism to invest in such a company besides being an accredited investor with access.

many people go wrong when thinking about options in that they don't try to consider the fundamentals of the investment. working at an early-stage startup isn't just a job, it is a way to do risky investments using your time.

all that said, what Dan proposes at the beginning makes a lot of sense: the startup should be willing to give you cash instead of options (provided they have the cash).

<comment><USER27> Given what you know about Bitcoin now, would you buy $100k worth of bitcoin in 2010? Of course you would.

Except...I didn't tell you that your investment would be held by Mt. Gox. You lost your investment.

There is always risk. Always. 97% of startups fail. They are extremely high risk. The earlier you buy in, the higher the potential payout, but the more likely you are to be backing one that will fail. Even the successful ones, after dilution, may or may not be worth more than the cash over how long it took to IPO/be bought out.

You say you get to make risky investments with time; yes...but that's even worse than money. Money is fungible. Time isn't. You have a set amount in life.

Having a 97% chance you're wasting it (actually, higher, since dilution + etc means even a 'success' may mean you made less than the equivalent cash over how long you worked at the place, the extra hours you put in compared to working on side projects, etc) are some pretty long odds.

<comment><USER53> > You say you get to make risky investments with time; yes...but that's even > worse than money. Money is fungible. Time isn't. You have a set amount in > life.

that isn't an argument against startups offering options. that only says that you value your time in such a way that precludes you from investing it in startups.

<comment><USER27> Sure, and I wasn't arguing against startups offering options. Just against startups valuing them over cash, and expecting employees to do the same.

Really, I'd say the whole thing is a red herring; either way you're working. Your time is being used. So the question is do you want to trade that time for a guaranteed amount of money, or a -possible- amount of money (but, high risk). The only way taking the options makes sense is if the salary is -still- high enough to not get in the way of what you want to do, and you could walk away having netted zero from your options and not feel cheated.

</comment></comment></comment></comment><comment><USER54> "..why shouldn't the startup go to an investor, sell their options for what they claim their options to be worth, and then pay me in cash?"

Because an option held by an employee has more value because it functions as an incentive.

<comment><USER55> The incentive effect is therefore entirely dependent on the employee's degree of ignorance! Experience has shown me that "options are worthless" is a pretty good rule of thumb, and I simply ignore everything but the so-called "base" salary when I evaluate a job offer.

</comment></comment><comment><USER56> I don't want to jump into a debate on a clearly biased post, but I feel that a few things need to be clear: \- Many employees prefer options to cash, as it provides the opportunity to make a lot of money. The chances that happens are very low but many people want to take the chance. Just because it's not your preference doesn't mean it's not attractive. \- Salaries increase over the life of the company, so if you join a startup today with a lower salary but many options then in a few years you'll have the salary you want AND the options. So the question is whether the difference in salary for those years is worth the opportunity for a big return. \- There is a different feeling of working somewhere where you have ownership vs just a paycheck. In the early stages of a company this is important to employees who really believe in the mission. \- Most companies do sell shares to investors for cash to pay employees, that is where the money for salaries come from. However, that investment comes with many terms attached, including liquidation preferences, which reduce the returns to employees long term. Giving employees options is the most direct transfer of value if the company does have an exit.

Overall, it's a more complex issue than this post presents. If you don't want equity, don't accept offers that include equity. If you do want equity, then do. Simple.

<comment><USER57> The lottery is just a way of taxing poor people who don't know math. (c) :)

</comment></comment><comment><USER58> Great article. The point can be distilled down to information asymmetry - <USER2> company wants FROM YOU something that is relatively straightforward and clear (your time) and wants to give TO YOU something that is complex and hard to understand (a complicated financial instrument that may or may not turn out to have value in the future).

As a general rule, you should stay away from such deals. The likelihood is that the company knows more about the instrument than you do, and is using that information to underpay you.

</comment><comment><USER59> I've been asked today if I'd take equity instead of some cash. My answer was a polite no.

If I could work at the same time for ten startups then I would hedge the risk. Most would fail, one would succeed, it could be worth it. But I can work for only one startup so it's like betting on who would win 2018 NFL. There are better choices than others, still it's down to luck.

<comment><USER60> Would it be possible for workers to create a diversified pool of startup equity grants? You'd pay in in-kind, and receive a portion of all cash flows from group holdings proportional to what you put in.

There's obvious problems with how to fairly value the in-kind options, and how to avoid making it a market for lemons.

The overall goal is something like if there's 11 co-founders and one makes it big, you wind up with one person with $900M and ten worth $10M, rather than one worth $1B. It's a small enough portion of equity that you're still incentivized to make it big, and a big enough portion of enough equity slices to cut out a lot of the variance.

</comment></comment><comment><USER61> It just goes to show that just because you think you know how to evaluate stock doesn't mean you do. I have a pretty good understanding of dilution, tax implications, liquidation preferences and so on. But that 5% of equity issued to employees => equity actually acted issued is shocking to me (I would have guessed 35-40%). A friend once told me: unless you're a founder the right estimate of equity is $0 (By which he meant: be comfortable with an offer in every other aspect, then take equity. If you only have a 1/20 chance of getting your equity I'd say that advice is more true than I initially thought.)

</comment><comment><USER62> > If you look at companies that have made a lot of people rich, like > Microsoft, Google, and Facebook, almost none of the employees who became > rich had an instrumental role in the company's success.

Is this true? Dan seems to kind of skim over this point without much proof or thought (which is unlike him!)

I don't have any data on this either, but it seems like a pretty big assumption to take for granted. The implication is that the early employees added little value compared to investors/founders, but in my experience this is the opposite. The team is literally who built the vast majority of the product.

<comment><USER54> I think he means by count of people, not amount of money made. In other words, MSFT made Bill Gates very rich, plus thousands of others became part of the one percent (multi-millionaires) without making a really amazing contribution.

</comment></comment><comment><USER63> For one thing, the reason that options/shares aren't traded widely in earlier stage companies is regulatory. If you have too many investors, or something, you have more regulatory overhead to deal with. Small companies don't want to have 5000 investors for this reason. However, I personally know people who have sold their vested options at a significant profit in very early startups (just after an A round).

Options are worth more than cash IF AND ONLY IF you have insights and evidence that the company is going to outperform the current valuation of the company, after being adjusted for risk.

For example, if you see that it is the best team ever assembled. Most startup CEOs says their team is the best ever, but if you interact with the team for a bit and see it is probably true.

For example, if the company needs you really badly, and they are able to give you options based on a valuation that based on current information is a huge underestimate. For example, a drug company that found out yesterday that they got their FDA approval for their new blockbuster drug, and for some reason they need to hire you very badly. This is iffy because they are probably not able to offer any options if they are already far along on being acquired.

Overall, there are certainly startups where the signals would be available to someone thinking of working there such that they would be able to determine if it is likely that options have a promising expected value. I think this is going to be a very low % of startups where that expected value is even remotely close to what you would get at a large company, and very very few where it would be much higher.

</comment><comment><USER64> Cash is nearly always better for the employee. Startups like options because:

1\. They can "pay" people with "free" pieces of paper that effectively cost nothing from a cash standpoint

2\. It helps keep staff onboard by slapping golden handcuffs on

3\. In the event that these paper options turn into something with actual value that only happens if the founders and investors make a ton of money first, so at that point they don't really care what the options "cost". It's like writing a paycheck that can only be cashed if the founders/investors get rich. A great deal for them, not so great for you.

Net net all these things benefit the founders/investors and not the person receiving the options. In nearly all cases people are getting options as part of core comp because the company can't afford to pay out all that cash. It's important potential employees understand that when agreeing to a base package that is heavily in options vs cold cash. Options should be treated as a bonus that may pay off but very likely won't, not base comp.

<comment><USER65> Startups also like options because they believe it creates an "ownership mentality" among its employees. I believe this is mostly true.

I think equity compensation is also a selection mechanism. If I'm running an early stage startup, I want everyone to have a stake in the game. Equity compensation attracts employees with that mindset. Conversely, if a potential employee would prefer all cash compensation to equity, that would be a big red flag to me.

One of the struggles of offering equity to employees is finding a mechanism that has no taxable value upon issue, benefits from capital gains, and is legally sound.

One option is to organize as an LLC and offer a profits interest. These can be issued with $0 taxable value and benefit from the upside of the company. They can vest, and once vested they can participate in the gains of the company (including distributed income, not just a sale). I believe these are inherently more fair to the employees because there is no golden handcuff. They don't need to be exercised and once they're vested, you can walk away with them. On the downside, they are a little more cumbersome to set up.

<comment><USER66> I'd prefer plain old stock without restrictions and a larger proportion of it.

I think we ought to target a controlling interest for the employees (i.e. employees own over 51% of the company) and shareholders vote on the weight of their shares, like they normally do.

In sum, I'd rather see a founder worth $100 Million and 999 employees worth $900k than a $800 Millionaire and 999 employees worth $200k. And I actually think this would have an important impact on the economy by balancing out the income inequality. In other words, not only would we see far more ~$1 Millionaires, but also more $100 Millionaires because now the money is moving faster with all the fresh Millionaires buying goods/services.

<comment><USER67> As somebody who's founded a couple companies, there just aren't enough people with the appetite for risk and drive needed to manage a controlling interest in a company.

And on an economic level, if the net compensation level, including _crushing levels of stress and overwork_ , was _so_ bad between founders and employees, you'd see a lot more founders until the system balanced itself out. And you do not. Most real good engineers just want a fat paycheck and a clear delineation of responsibility. Trust me, a senior valley level salary and not riding that ride is a good gig.

That said, the side of the bread with the butter on it is pretty clear. The reasons for that are less clear until you've done it, but nobody's standing in your way-- you want to be the daddy/get really rich, found a company.

<comment><USER68> Come now, you believe that more people don't found companies because of the stress? It seems far more likely that most people don't have the capital assets for that to be an option, except three groups... 1. The very young who have very low expenses, the ones who cashed out already, and the ones who started rich.

<comment><USER67> Untrue. Also untrue that you need funding-- you can replace funding with a brutal workload and a lot of patience. I did it, ask me how, haha.

I mean, don't get me wrong, you are gonna sign up to be broke. For a _while_. A lot of people have kinda boxed themselves in with a very comfortable middle- to-upper-middle class lifestyle that closes a lot of doors via their household burn rate. That's not the system being out to get you, that's a perfectly valid life choice that you and you alone are responsible for.

<comment><USER67> Not that there isn't a whole _industry_ revolving around bleeding you white, keeping you chained to the oars by debt until you're no longer useful. Those issues are orthogonal.... I think.

</comment></comment></comment></comment></comment></comment></comment><comment><USER69> Cash is king any day! If you aren't in the founding team!

<comment><USER13> Sadly this is too often a valid heuristic.

At the same time, my friends and I did "pretty well" as employee 3,000+ at this crazy search engine company that couldn't make it because "nobody clicks on ads."

<comment><USER70> I'd say that if you're employee 3.000, the company has already made it, although, as a counterexample, Uber has 6.700 employees and I don't know if it will bust or not.

</comment></comment></comment><comment><USER71> Options first really got started as a tax avoidance measure, but that loophole was closed decades ago.

</comment><comment><USER72> I always find the "Bison dollars" analogy for options or equity vs. cash to be appropriate.

The worth of Bison dollars is wholly dependent on how much faith you have that Bison will enact his evil plan of holding the Queen for ransom and forcing the Bank of England to accept the proposed exchange rate of five pounds to the Bison dollar. Similarly, the value of stock or options is dependent on your faith that the startup will grow. Whatever the case, you want to have enough cash to make your expenses, as those odds are NOT in your favor. The VCs funding the company are hedging their bets against several other similar companies in the hopes that at least ONE will blow up and become a "unicorn".

</comment><comment><USER73> This shows why I've long said, "Put not your faith in stock options."

Like it or not, options are basically Monopoly money. You can't get your landlord to accept them, or the grocery store, or the credit card companies.

<comment><USER74> Well, some land lords used to accept options for rent... [http://realtormag.realtor.org/commercial/feature/article/200...](http://realtormag.realtor.org/commercial/feature/article/2000/07/landlords- swap-stock-options-for-rent)

</comment></comment><comment><USER75> Both. That's what the CEO and others get. Take a fat salary and options.

</comment><comment><USER76> Man I wish I knew more about options before I joined a pre IPO company. Kind of like how I wish I knew about salary negotiation before my first job out of college. It's like companies exist to scam us.

</comment><comment><USER77> Always good to break down how startup equity really works. It quickly becomes apparent that working at startups isn't a great cash game (though it is a decently good skills game).

</comment><comment><USER78> What we need is a way to pool employee stock options across startup companies to diversify risk. Surely there's a financial engineer somewhere who can create such a thing.

</comment><comment><USER79> Questions that come to mind..

If I do the math of taking the cash each time, do I end up close to what diluted options would provide, or more?

How many people do I know where options translated to sizeable cash, even after dilution?

Which statistic will I be a part of, where options have actionable worth, or little/nothing?

The questions above we're proposed to me by a founder who had taken funding and was diluted to the point where he realized his worth as a consultant/freelancer/contractor may have ended up ahead.

</comment><comment><USER80> Paying with options is equivalent to the start up selling stock to investors, paying employee with cash, and then having employee invest the money back into the company. As the article points out.

But there are differences. Avoiding income tax. Deferral of compensation to drive retention. Giving employees a better deal than the investors. Letting employees invest into an asset class the government normally prohibits them from investing into. Those are some of the big ones.

<comment><USER81> > Paying with options is equivalent to the start up selling stock to > investors, paying employee with cash, and then having employee invest the > money back into the company. As the article points out

No that's not the same, options are basically the right to invest at current valuation. What you described is more like RSU.

<comment><USER80> Current common valuation - insignificant for early-stage companies. Late stage companies do RSUs.

</comment></comment></comment><comment><USER82> Risk and reward are proportional, unless there's somebody trying to make your risk disproportionate to their reward.

</comment><comment><USER60> All I want from the equity package at a start-up is for it to be non-zero. If a co-worker winds up with enough out of their equity package to become financially independent, I'm going to be very upset unless I've at least gotten enough for a car or vacation.

</comment><comment><USER83> Could someone explain this statement to me:

>"Like most people, extra income gives me diminishing utility, but VCs have an arguably nearly linear utility in income."

Specifically, what is this "utility" and how is it diminished by more cash compensation exactly?

<comment><USER84> Utility is a concept from economics: [https://en.wikipedia.org/wiki/Utility](https://en.wikipedia.org/wiki/Utility)

You can think of it as "how much benefit I get from a thing".

What he is referring to is diminishing marginal utility, which is that as you consume more and more of a good (in this case, income) you derive less benefit from it. [https://en.wikipedia.org/wiki/Marginal_utility](https://en.wikipedia.org/wiki/Marginal_utility)

This is backed up by psychology research indicating that people hit a happiness plateau at some income level.

<comment><USER83> Ah ok utility as in utilitarian, that makes sense. Thanks for the explanation.

</comment></comment></comment><comment><USER85> So, basically, start-up hires should issue their own term sheet, by which they agree to invest time in exchange for whatever else. Which suggests that human capital is coming on par with the VCs themselves. Interesting...

</comment><comment> m-j-fox Be careful with those golden handcuffs: they only work if everyone thinks they're real. A bad quarter or even a bad rumor can prompt staff to bail en masse.

</comment><comment><USER86> Everyone should look at [http://equidateinc.com](http://equidateinc.com)

I think it is the direction of the future.

<comment><USER87> Their video not playing in Chrome does not inspire a great deal of confidence.

</comment></comment><comment><USER88> Somewhat of a social aside, CEOs don't tend to like it when you refer to one's options as a "lottery ticket."

</comment><comment><USER89> Some folks are commenting, cash.

I would personally prefer Bitcoin or ETH as I suspect the value of either will be exponential in the future.

And for the company, if you buy a load of whichever say at beginning of your company that you keep only to give out bonuses to their equivalent in cash every time a new hire comes, you could actually give out the same amount of cash for less tokens in the future.

</comment><comment><USER90> Maybe I'm just getting old, but I'm starting to ignore companies that even bring up equity early on in the process, or flat-out state that it's calculated into the compensation package.

If I want to play the lottery, then I'll choose to do it with small bills on a lark. Not gamble with a substantial portion of my regular income.

If I can't clearly evaluate the total compensation package I'm getting, I will assume you are trying to screw me, and I'll probably walk away because of what that says about your management and culture.

In my opinion, the value of the equity you're offering me is zero until proven otherwise. And it's not my job to prove otherwise. It's yours. Your exciting workplace, free beer, ping-pong tables, and gluten-free vegan breakfast/lunch options are all as meaningless as your equity is.

The same thing goes for cutting-edge technologies (resume-driven development), and at this point, I'm starting to feel the same way about religious devotion to Agile.

All 3 of those things are red flags to me when I see them talked about in job postings. At the risk of sounding like I was born in the 70s (I was), I'd like to think that it's still possible to find a job in this field where you pay me a decent salary for good, solid work, and then you get the fuck out of my way so that I can do it.

In fact, I know these jobs are everywhere. They aren't sexy, they don't get talked about in the press, and they are usually not primarily technology companies. They are in-house teams where the client is the company, and the product is anything technology can improve so that the company can function better.

You're not going to get rich overnight. But many of these jobs offer a lot of autonomy and flexibility (within reason) to explore new things at a reasonable pace, a good quality of life, a decent wage, and a chance at retirement at an okay time.

I know this is Hacker News and the audience is mainly geared towards exciting new startups, but I want to give a shout out to the thousands of companies in the U.S. who don't try to cloud your head with delusions of getting rich quickly, don't give a shit about the latest js framework, don't bog you down with daily rituals, and just let you focus on solving problems with solid solutions and respectable code.

Perhaps I'm very much in the minority here, but I'm glad to have a place at a company that does what I think is meaningful and positive work in the world, pays me a solid 6 figures, and mostly lets our team do what we think is best, so long as it accomplishes the things we promise to deliver. Equity was never talked about. There was no discussion of perks of any kind. They told me what their problems were and interviewed me to see if I could help fix them. Then they told me what I would be paid and what the benefits are. They don't need to worry about me leaving for something hotter or sexier or more exciting. The only thing that would make me leave is if there were some drastic change in management that suddenly made my life miserable.

<comment><USER91> Completely, thoroughly agree. I'm a senior engineer. You want my expertise? Pay me. I care fuck all about your options, your free massages, and your foosball tables. If that's all you have to offer, you're probably not a serious company; you're just playing startup theater. Call me when you have a real engineering problem to solve and you have $$ to pay for a solution because you're paying $$$ every day you don't have a solution.

<comment><USER90> To be fair, I would consider free massages as a real benefit. Stupid and probably indicative of a culture problem in most cases. But if my company added those, I would work from home less often.

Also, Mike Monteiro from one of the world's best design companies: [https://www.youtube.com/watch?v=jVkLVRt6c1U](https://www.youtube.com/watch?v=jVkLVRt6c1U)

TL;DR: Fuck you. Pay me.

</comment></comment></comment><comment><USER41> Can't they just tell you the current share price and your strike price? The share price minus the strike price times the number of options is the value of the package when vested, no?

<comment><USER81> At offer stage, strike price = share price, which is estimated by an independent third party at least once per year.

It used to be the case that strike price is significantly lower than share price, making options much more valuable than they are today. But that was deemed a tax loophole by IRA and became disallowed some while ago.

</comment></comment><comment><USER92> Start your own company vs. Cash, would be more interesting.

Rambling about options is a bunch of distracting noise.

<comment><USER93> Most of us aren't going to start our own companies.

<comment><USER51> "Ive got a great idea, its like Twitter, but _purple_!!!"

<comment><USER94> "Snapchat, but for dogs!"

<comment><USER74> Shazam, but for food.

<comment><USER92> So, I guess the answer is - cash?

Either that or find something that people need and build it (rather than bitching about options/vesting crap).

<comment><USER51> Have you been in the industry a long time? No one is "bitching" about options. Did you read the article? Its not crap, its maddening amounts of information completely irrelevant to the fields of Computer Science and software engineering. Yet, its a reality most of us must face, since there are a lot more job openings for startups than any other sized business. And since its in the business' interests to provide monopoly money instead of real money, this problem doesnt seem to ever go away. If you ever get into freelancing, its unlikely you will never be met with such offers. Its also likely your contract will dissolve into said monopoly money at some point too.

If anything, we're "bitching" about wanting actual money for compensation, not a raffle to a lottery that is highly likely to have no prize at all, and just as likely to be worth far less than the typical compensation in cash.

</comment></comment></comment></comment></comment></comment></comment><comment><USER81> Options by definition are worthless when they are granted, because strike price is the current estimated value of the stock.

<comment><USER95> This is not true, the right to purchase at the current price but not the obligation has value in itself.

Of course this is no where near the sum of the strike price for the options.

<comment><USER81> Right, with options you can choose not to exercise if valuation goes down, avoiding a loss.

<comment><USER34> With some options (Warrants of investment trusts for example) you can sell those on the open market if they are in the money its also a way of leveraging your investments.

</comment></comment></comment></comment><comment><USER96> There is so much conflation in that first paragraph I couldn't get past it. The way I think about it is that options are how you earn money for doing a (/if you do a) good job. Much like doing a good job of picking a house in a neighborhood that you believe will appreciate, doing the right amount of renovation and renting it out while waiting, if you did this well you could make money on the appreciating assets. In a startup, your two main assets are time and people. Salary is how a company compensates you for the FACT that you're doing a good job. Bonuses are how the company compensates you for going above and beyond. In our company we have standard compensation packages based on tenure, within the structure, there is no way for anyone to make any more than anyone else outside of just being at the company for a long time. When you're betting on a startup you're betting on the founders and the team, not the VC, if you want a proper salary go work for a business that is already built, don't work on building one. Hedge funds and banks pay really well.</comment>


WebHooks and WebSockets in ASP.NET - <AUTHOR> http://www.entechsolutions.com/hooks-and-sockets-for-web-apps#more-423 <comment><USER2> Good stuff. Has anyone used SignalR before? I imagine it's a lot easier to use that instead of rolling your own.

<https://github.com/SignalR/SignalR>

<comment><USER3> Yes, SignalR is awesome. Easy to get started, regular updates and great support from the devs at jabbr.net.

</comment></comment><comment><USER4> [shamelessplug]

If you're in need of a WebSocket library that works on .NET 4.0 or Mono, there is Fleck[1].

[1]: <https://github.com/statianzo/Fleck>

[/shamelessplug]

<comment><USER2> Nice. What sets Fleck apart from the rest?

Edit - Whoa, wait a minute. You're Neumont grad? I'm cohort 9 :)

<comment><USER4> Cohort 15 ;)

A couple of features:

\- Simple API that requires no inheritance.

\- Mono is a first class citizen in development.

\- Reasonably RFC compliant[1].

\- Proof of concept adapter for SignalR[2].

[1]: <http://statianzo.github.com/Fleck/>

[2]: <https://github.com/davidfowl/SignalR.Fleck></comment></comment></comment>


Cellphones, Tablets, Fitbits Could Be Banned from Pentagon Under Mattis Review - <AUTHOR> https://taskandpurpose.com/ban-cellphones-pentagon-mattis/ <comment><USER2> wouldn't the lack of data leak the same kind of information? sound like they'll eventually need to create false signals. maybe from some kind of AI generative network. We could call it systematic kinetic yielding network.</comment>


Ask HN: How to be an Individual Contributor with a higher salary than a manager? - <AUTHOR> How does one become this?
Practical examples appreciated. <comment><USER2> Speaking from the perspective of a manager who had direct reports earning more than me.

1\. Be good at what you do. This is a given. This also assumes that you do not require coaching to get better - you will just get better.

2\. Be dependable. 100% dependable. Answer or return calls and emails promptly (within reason of course). Never, ever, miss your own deadlines. Make sure your manager is never blind-sighted.

3\. Make it your primary focus to support your manager's success and his career. Be his eyes and ears, if need be.

<comment><USER3> 3 applies to almost every job with a manager. Even if you're just a janitor, being the eyes and ears of your manager lands you the best benefits.

<comment><USER2> Very true. Though I should have been more clear in what I wished to express...

3\. Be exclusively interested in supporting and progressing your manager's career.

Usually, you'd support your manager's success to drive your own success.

</comment></comment></comment><comment><USER4> Specialize, specialize, specialize.

I don't mean Oracle, I mean Oracle deployments on AWS for ERP implementations.

I don't mean Unix sysadmin, I mean Linux kernel on bare metal hardware tuning.

I don't mean "I know our application", I mean "I have seen our application through N deployments and M different platforms and can troubleshoot on high transaction loads".

Also, work for a big company or a consultancy that can leverage your talents. You won't be a highly paid IC at a small web consultancy, the leverage isn't there.

Note that doing this exposes you to risk, as does all specialization. If your specialization is becomes obsolete, you have to start over, often at a lower pay grade.

</comment><comment><USER5> Higher than a manager at the same company? Be at one of the companies that offers a separate promotion track for engineering.

Higher than managers in general? Keep interviewing, raising your rate and you should get there. I mean if you work in software dev you probably already make a shitload more than a lot of people with "manager" in their title so just double down on what works.

</comment><comment><USER6> In Europe, you do this by becoming a long-term contractor. They make more than their tech leads, and sometimes (depending on company) more than the directors of those tech-leads.

</comment><comment><USER7> Become a government contractor for the US federal government.

<comment><USER8> Man, I hope you are right. I just started a position in US contracting about 8 months ago.

<comment><USER9> This is more a function of a low ceiling for government employees than it is anything special about contracting. Like other places it's a race to the bottom for most, with small pockets of exceptional pay for very in demand specialties.

</comment></comment></comment><comment> q-base As an independent contractor, in the right market, you will in a lot of cases make way more than any level remotely close to yours.

If you are a scarce resource and gives immense value, then you can easily earn more than the managers close to you. And as I said several levels above them.

In a lot of cases managers are more easily replaceable than good individual contributors.</comment>


Supreme Court sides with business over workers in class arbitration ruling - <AUTHOR> https://www.washingtonpost.com/politics/courts_law/divided-supreme-court-sides-with-business-owners-over-workers-in-class-arbitration-ruling/2019/04/24/30eb1952-66b3-11e9-8985-4cf30147bdca_story.html <comment><USER2> Outline link: [https://outline.com/KuqAnt](https://outline.com/KuqAnt)</comment>


Edgecoin: Our Internal Blockchain for Founders - <AUTHOR> https://medium.com/@kpcb_edge/edgecoin-our-internal-blockchain-for-founders-301097bc09a5#.gudqck2q9 <comment><USER2> Reminds me of the recent discussions: What benefit offers a blockchain here, vs. any other public logfile or database?</comment>


Free Software Foundation: recent licensing updates - <AUTHOR> https://www.fsf.org/blogs/licensing/recent-licensing-updates <comment><USER2> I'm all for FSF and F/OSS but I feel like we're discussing things of the past. What I think needs discussion instead is

1\. what are the ethics of F/OSS in times of "the cloud"?

2\. should we equip our software with additional constraints related to what kind of websites/service can and cannot be created with it (for example Open Access only, or at least freely crawlable by indie crawlers; eg I just learned GitHub blocked findx which has shut down today [1])

Rather than pontificating about traditional software licensing, I'm more concerned about your software's contribution towards software and information monopolization.

[1]: [https://news.ycombinator.com/item?id=18413684](https://news.ycombinator.com/item?id=18413684)</comment>


Freelancer.com scammed me What should I do? - <AUTHOR> Well.. I have been member there since 2009.. and I pay them more than $700 per year in fees..
Suddenly they suspended my account because an employer filed a report against me. I contacted them and they agreed to restore my account.
Less than 24 hours later, they suspended my account again after they agreed to restore it!
I kept messaging them about the reason.. they sent me a fake reason that the acceptance rate for the work I deliver to employer is very low and that employers dont accept THE COMPLETED WORK I deliver to them!
I replied to them and asked them to prove it, and told them that all the work I COMPLETE AND DELIVER is accepted, except very few cases that I usually solve friendly and without their dispute system!
They replied again back and told me that the reason is not that, and the reason is that I abused their dispute system again!
I replied back and asked them for a proof! I did not really do it and asked them for a proof that I really abused their dispute system!
It has been 3 days and they don't respond! Employers contacted me and I had to cancel 3 projects, 2 of them were very urgent for my clients and caused frustration to them!
I had to cancel it, because the money associated with these projects exist on freelancer website's milestone system!
Of course I canceled these milesetone (escrow) payments because I have no guarantee that my account will be restored and can't risk having such a loss!
Those projects I already paid 10% fee in advance cut from my money immediately once I win projects!
They caused me to lose $500 projects' value, adding also the $50 I already paid, which is already cut from my funds and they ALREADY received it!
They are clearly unprofessional and dont understand that time is critical in IT projects, specially urgent projects!!
I intend to build a competitive website for them.. that will cover all horrible mistakes they have there! But such a thing would take yrs to grow!
What should I do with freelancer dot com ?
They are clearly scammers! They have no reason to suspend my account, caused me so much of loss and pressure, and my money in the account there!
If they have a legitimate reason and legitimate proof that I abused their terms of use, they would come and tell me and I will admit it... but they really don't!
What would you do if this happens with you? <comment><USER2> Well, freelancer are quite obviously scammers, but I am not sure about this scenario here, where I am not sure the term scam would apply at this point, even though it seems very shady.

However. When they bought vworker.com my account migrated to freelancer where I obviously did the procedure of connecting my PayPal to get it certified for future possible payments. I got an e-mail about getting their Basic Membership for free for the next month due to the vworker->freelancer thing and whatever. One month later I get an e-mail telling me that the Basic Membership ended and in order to renew it I will have to pay the fee, obviously I didn't, not having used the side as I didn't really like it too much. 6 hours later I get another e-mail saying that they just booked the amount from my PayPal, which I gave them the right to when connecting my PayPal to my freelancer account.

The support didn't want to give me my money back until I made it clear that they're not acting on legal grounds as they never stated anywhere that the 1 month free Basic Membership will renew automatically afterwards and that I would have to change it in order to have the free membership (at least I know it's not legal in my country, but after 1 week of waiting they finally replied that they're going to give me my money back). I wonder how much money they've made by scamming hundreds and possibly thousands former vworker users who then didn't claim their money back.

<comment><AUTHOR> Why you don't think that this is a scam?

Suspending my account - which has more than $550 in milestone payments there, for no clear reason and without any note, and even without any prompt communication!

If this is not a scam.. then what the scam is?

</comment></comment><comment><USER3> Calling a company scammers because you don't like them, not providing any evidence and ranting is unlikely to help your cause.

You're much more likely to receive useful advice if you take a professional approach to describing the issues you had.

<comment><AUTHOR> I am acting "professionally" and I understand the difference between "liking" and being fair.

Its pretty clear rule! Every time they come with a different reason, they take 2 days to respond to such a critical matter, and they don't take it seriously!

They say a reason then they change it back! Don't you think that this is a scamming?

If they have a clear reason with a proof that I violated their terms of use, then why don't they say it?

This is a clear scam! It's pretty clear indeed! I said the story honestly and without any lies.. and I challenge them to give me a single proof that I violated their terms of use!

This is not a company! This is nothing but a group of scammers!

<comment><USER4> If you posted all of the email correspondence somewhere and linked the url, we would had something definitive to refer to. While it's no unheard of for major sites to have cases like these (lord knows adwords / paypal have led to similar posts), it's not in any major website's best interest to scam. So, the burden of proof is really on you, to gain our sympathy / help.

It's not that we don't trust you, but there's usually 2 sides to every story and the truth lies somewhere in the middle...and TBH, we don't trust anyone :-)

<comment><AUTHOR> I am taking snapshots of emails and I will post it here, but let me make something clear for you.

Its known about Freelancer that they suspend a large number of accounts in a very suspicious behavior, and those accounts usually have from hundreds to thousands of dollars!

But I am still going to post snapshots for emails here and I challenge them indeed to respond! I sent them the link of this post and I am here waiting for their response!

<comment><USER4> I wish you the best. But, thwarting fraud is a legitimately difficult undertaking and is often the same reason cited by google and paypal for why they are freezing accounts. Unfortunately, you might be the false positive and they should have a better policy in place, if that's the case. Good luck and hopefully you'll get the attention required to get them to engage and resolve the problem.

</comment></comment></comment></comment></comment><comment><USER5> Take a deep breath and handle this like a professional. There is no need to use 20+ exclamation points. Abusing the English language isn't going to help the situation.

My consumer side feels your frustration. My business side feels bad for Freelancer.com. It has been 3 hours since this thread went live. Are you going to provide any proof of your own?

</comment><comment><USER6> Cannot help your specifically, but there are growing number of cases of people relying on certain platform only to find out that platform burned them at their mercy at will.

Lessons:

1\. All platforms are ought to be used only as a tool, not as a foundation of business. In other words earn trust with your clients and steer them to do business directly with you, without platform-as-a-middleman. Use platform to gain clients, gain business. Pay fair commission for it's services but don't sell yourself short to platform just because they want you to.

2\. Have plan B (or rather platform B) in case platform A failed to deliver, got disgruntled or becomes unruly. Maintain accounts at different platforms as a backup.

3\. Platform's TOS is not a law (although they want you to think that) it's a guidance for crowds. Have your own brains.

<comment><AUTHOR> Very good points! Thats exactly why I am suffering now.. because I relied on them 100% to get business leads.

I already have created a list of repetitive customers, but keep in mind that most of the customers are individuals or very small offices that don't need work frequently.

So thats why I plan to start my own freelancing website.. to guarantee that I own the source of jobs.</comment></comment>


DRACOs May Be Effective Against All Viruses - <AUTHOR> https://www.indiegogo.com/projects/dracos-may-be-effective-against-all-viruses#/ <comment><USER2> [https://news.ycombinator.com/item?id=10753797](https://news.ycombinator.com/item?id=10753797)</comment>


Is Bulgaria sitting on $3.5 BILLION worth of Bitcoin seized from criminals? - <AUTHOR> https://www.grahamcluley.com/bulgaria-sitting-3-5-billion-worth-bitcoin-seized-criminals/ <comment><USER2> The bitcoins are lost. The current Bulgarian political class has its roots in the gangsters/dirtbags installed by the Red Army during occupation so it is hopeless to expect anything human-like of them. By the way they had already embezzled similar sums on several occasions during the last decade - the KTB bankrupcy and the NPP Belene being two examples.

What is much more interesting though is the customs worm - seems like a combination of high-tech and low-level corruption could yield similar or better results to pure high-level corruption. This is real good news.</comment>


Protein analysis finds animal source of bog body clothes - <AUTHOR> http://www.thehistoryblog.com/archives/43743 <comment><USER2> The lede is buried here:

 _The study indicates that the primary sources of materials for bog body garments were domesticated animals, not the skins of wild animals slain in the hunt, correcting a misconception about Iron Age Germanic peoples that has lingered since Tacitus who wrote in Germania that they "wear the skins of wild beasts."_</comment>


Euro and ICOs Fade, Fintech Rises, LinkedIn Struggles - <AUTHOR> https://medium.com/futuresin/libra-kills-euro-burst-ico-bubble-makes-fintech-king-59442f14260f <comment><USER2> The Euro is still here, it has not failed, and is the currency of 350 million people, with an additional 240 millions using a currency pegged to the Euro.

It is currently the second most traded currency after the USD.

But "haters gotta hate" I guess...</comment>


Are urban schools still separate? - <AUTHOR> http://educationismylife.com/still-separate/

<comment><USER2> That essay made no sense. I couldn't even figure out what "separate" was supposed to mean. I thought it would specifically about racial discrimination. I take it that "urban" is a code word for "high numbers of minorities"?

Then I realized that nearly all of your submissions are to educationismylife.com, and most of your comments are only on your own posts, so this link is really just self-promotion.</comment>


Ask HN: What did you do (or wish you did) when you got out of highschool? - <AUTHOR>

Basically, I graduate from highschool in a week and have no idea what I should do.
I currently live in a small town in Northern California where there's not much room for opportunity... So far my plan is to get a minimum-wage job and save up until I can afford to move to Sacramento, where I have a couple friends I can live with and obviously better job opportunities. I plan on going to college and getting a degree in CS afterwards, and then try to make my way into the tech industry.
Is this a bad idea? ... What should I do if so? <comment><USER2> Why take a minimum wage job when you can probably contract yourself out doing a number of different things? I worked part-time one summer for $6/hr ( ~ 0.75 higher than minimum wage ) in between sophomore/junior year in high school. Towards the end of the summer, I started mowing some lawns for some people I knew and was making ~$20 per lawn ( which took about an hour each ).

Next summer, I figured if I only mowed one lawn a day, I'd make the same $$$. Ended up mowing 10+ lawns a week at $25-40 a piece ( I averaged ~$20 - $25/hr depending on the week ). My favorite move was to go to my customer's neighbors and say "Hi! I'm cutting Sam's lawn for $x. If you let me cut your lawn for $x - $5, I'll knock $5 off Sam's lawn as well. Get your lawn cut and save your neighbor some cash." That worked pretty well and kept my transit time down.

Even if you take a min wage job for stability, try contracting yourself out a bit on the side and bank that cash. You'll get where you're going quicker.

<comment><USER3> That's a hell of a sales tactic in a market where social ties matter. Kudos to you for figuring it out.

</comment></comment><comment> dav- Three months after my high school graduation, I moved to Silicon Valley. It was one of the best choices I could have made.

I grew up in a small desert town with not much room to grow. The opportunities there were limited for what I wanted to do, and I knew that if I was still living in that town when I was 40, or even 30, I wouldn't be happy.

Being the procrastinator that I am, I knew that I had to take action immediately, or I would inevitably fall into a lull of complacence: a mediocre job, a girlfriend, a dog? And then I would be stuck; eternally glued to this town that I hated by second-rate obligations. (Not entirely true, people make drastic changes even with other obligations all the time, but it's not common.)

I was (and still am) young, and I believe that you should take as many calculated risks as possible when you're young. Do it before you have a mortgage, a spouse, a kid. It's so much easier then, because failing doesn't mean letting your child go hungry, or losing your home and living on the streets. Worst case, you have to move back in with your parents (assuming they're supportive).

When I'm laying on my deathbed and analyzing my life, I would rather regret trying and failing to achieve my dreams than regret not trying at all. When it gets right down to it, I don't think I would regret failing one bit. Failure is part of life, and since I've moved here I've failed plenty of times. Probably more times than I've succeeded. But the value of my few successes outweighs my many failures, and that's the key.

I've gotten a good job, learned and grown more than I would have imagined possible, met dozens of amazing people, made lifelong friends, co-founded an organization, and I'm happier than I've ever been. Not only that, but I'm excited for the future.

I've still got a long way to go, but I'm so glad that I had the courage and drive to go out of my comfort zone, into a completely foreign situation, all alone, and just do it. Granted, I was extremely lucky to have the full support of my parents and family, but even if I hadn't I think I still would have gone out and done it.

Of course, this is not advice for everyone. It's not really advice at all, just my own experience. Yours may vary. Best of luck.

</comment><comment><USER4> I did what I wanted, was lazy, did too many drugs, danced to too much music and didn't care about the future. Life got messy at some points and I was almost homeless a couple of times. My career growth was stunted by I ended up about in the same place, or better, as my peers who "applied themselves".

I took shitty jobs that made me appreciate the perks of sitting behind a desk. I roamed around a dirt poor social circles which made me appreciate money. I hung with happy hippies who didn't give a shit about what society said thought about them and learned what inner peace means.

My perspective about measuring success and failure was changed by my post high school experiences. I chase goals and dreams differently now because I got all the fun and partying out of my system and look back on my life with fond memories of all the excitement I had.

Its like I'm not working hard to I can retire and have fun again you know? I know what the uninhibited lifestyle is like and the pros and cons. I choose to live a more calm life because I made a rational decision. Not because I feel like I'm pressured by social norms or external expectations.

Now I have a good 9-5 job, some freelance clients, two failed saas businesses, two content sites. I work hard now but only real difference between me and people in similar situations is our age and how peaceful we are internally.

If everything around me crumbles and I have nothing again I'm sort of ok with that. I don't worry if I missed out on anything and can relate to the joy and struggles of entirely different classes of people.

I guess that brings me a sort of peace when I'm working a long night or putting in extra effort. I just don't get stressed out about things and there is no nagging voice telling me to relax, I did that already. ;)

If I were you I'd fuck about, take a furniture delivery job, work in a kitchen and do things only a 20 year old body can handle. Make friends with people who you'll probably never be able to meet again after your CS career takes off and overall, relax.

Gain life experience instead of computer experience.

</comment><comment><USER5> I think Sacramento might be sub-optimal. I'll throw out a couple other tech cities that have a much, much, much lower cost of living, but still exciting developments. I think you can get to these places faster, and then develop skills or make some money or even attend college. (I'd actually recommend college first. I know it is fashionable to hate on college right now, but the overwhelming evidence is that it is still a good thing)

==Kansas City Probably the heart of Silicon Prairie right now, it has amazing areas like the Kansas City Startup Village where hackers live together in houses next door to each other powered with Google Fiber. (Need help with something in iOS? Walk a house down and ask the guys in the other place. That type of thing) Not only is it a great city with great BBQ, beer and history, but it the biggest emerging tech scene in the Midwest. This includes, but isn't limited to [http://eyeverify.com/](http://eyeverify.com/) [http://www.gethandprint.com/](http://www.gethandprint.com/) etc etc etc

==Lincoln, Nebraska Home of the University of Nebraska, it is an emerging tech center with new accelerators and venture capital firms in its sister city like [http://dundeeventurecapital.com/](http://dundeeventurecapital.com/) (Omaha is an hour away by car) and other avenues for funding like [http://www.investnebraska.com/](http://www.investnebraska.com/) and the [http://www.nebraskaangels.org/](http://www.nebraskaangels.org/). The fastest growing private company in Nebraska is [http://www.hudl.com/](http://www.hudl.com/), which started as a 3-person startup, but now has 3 offices in two cities. Similarly, the university is in the process of launching Innovation Campus which almost doubles the land area of its campus and includes maker spaces, business accelerators, and more.

</comment><comment><USER6> I went straight from HS to college with the help of my parents. But I also worked half the year full-time and went to school the other half full-time. I highly recommend this path. Learn basic programming skills first, then enroll in a CS program, then market yourself to employers and apply to any intern/co- op positions. I could have never divided my attention between work and school simultaneously, so I think alternating work and school is ideal.

Also, learning programming before enrolling in a CS program is from my experience the best path to not failing out. Professors do not really teach programming. They give assignments and do their best at lectures which doesn't really help your brain think programmatically.

</comment><comment><USER7> If you want to break into the tech industry, the best thing you can do right now is just start building stuff. Think of a mobile app or a web app that has a simple purpose that you think would be useful, then use the internet to teach yourself how to build it. If you can pull that off then you have a very good shot at a career as a developer. If you can't then you probably either don't have the drive or the aptitude, in which case you'll be spending a few more years figuring out what you want to do.

<comment><AUTHOR> I know I have the aptitude... drive would be my problem. I just find it difficult to actually _want_ to work on something. That's not really abnormal is it?...

<comment><USER8> Why going into tech industry actually ?

As obvious as it sounds, you should go into the field that you are passionate about.

As one old dude said a long time ago: "Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude"

<comment><AUTHOR> Because the tech industry _is_ what I'm passionate about. My lack of drive comes from things like lack of self-confidence and motivation.

<comment><USER9> You should read the essay "How to do what you love" by pg [0]. One thing he says is that it's easy to think you love something just because it has lots of prestige around it. I don't know you, so it is possible that you will love technology, but from your comment "Because the tech industry _is_ what I'm passionate about. My lack of drive comes from things like lack of self- confidence and motivation.", it seems to me that you're into it just because it seems cool from the outside. At least for me, it's impossible to be passionate about something and lacking of drive about the same thing.

What is it in the tech industry you are passionate about? Do you like to solve complex problem through coding? Do you think technology can give you more leverage? The tech industry is huge, so my advice for you would be first to find what you really like about technology.

One more thing. Maybe you will find my comment contemptuous, but I promise you that it is not the case. I am just writing what I would like to have read when I was younger.

[0] [http://paulgraham.com/love.html](http://paulgraham.com/love.html)

<comment><AUTHOR> Hm, well now that I look back at the comment I made at 2am, it seems rather silly to say I'm passionate about the tech industry itself.

The thing is that I've always been fascinated with technology and what it can do. I love working with it and I love making it work. As far as I'm concerned, making something useful in Java or putting together a computer is just as much fun as watching a movie or eating food.

My problem with drive is the whole "do what you're told" thing. I've tried doing things for a friend, but I often get bored in the middle of it because I'm just doing what I'm told, and it's not of any particular value or interest to me. Things that I don't think are just really cool or things that don't benefit me personally are harder to work on... and I don't think I'm the only one with this problem.

But anyways, thanks for the link, it's a good read and definitely something to think about either way.

<comment><USER7> Unless you're working for yourself on your own product it's hard to find something you're 100% passionate about. But the funny thing about that is working for yourself is one of the hardest things you can ever strive to do. It is even harder when you get married and have kids because your free time evaporates to zero. Now is the time to go for independence if you can do it

</comment></comment></comment></comment></comment></comment></comment><comment><USER10> Bravo for thinking to ask such a profound question. No doubt you'll go far!

Personally, I wish I started a program of autodidacticism earlier. Teaching myself about business & technical subjects that interested me. Also, make a habit of reading biographies of great men. Tremendous lessons can be learned that way.

Finally, read up on Goal Setting and implementing your action plans. *You've got less time than you think. Get Going Now!

</comment><comment><USER11> I'm in the same position right now. Instead of getting a job where you won't learn anything, try and get a job or an internship at a startup. I've worked at a local startup for the past year and it's been an amazing experience. I learned a lot and met a lot of interesting people.

[https://angel.co/jobs](https://angel.co/jobs)

</comment><comment><USER12> Travel, without question.

</comment><comment><USER13> Also: NEVER BORROW MONEY FOR ANYTHING if you can help it. How I wish I could tell my 18-year-old self that!

</comment><comment><USER13> In the "what did you wish you did" category, think about joining the military. They will pay you more than some minimum-wage job would, give you training and possibly an exciting tech job like cyber-warfare. (Not to mention the uniform and the physical training that'll help you attract a good woman!) Maybe you don't have any sense of duty or patriotism (most of us didn't at your age)... but you probably will in 15 years, and you'll thank yourself! There are a lot of us old guys who wish we had served, but I've never met an old veteran who wishes he _hadn 't_.

Think about the other stuff you're probably planning to do with the next decade: work some entry-level jobs, live with your parents, sit on the sofa, play a lot of video games, etc. Why not drive a submarine or work with satellites or something instead?

<comment><USER10> *Ditto: Great chance to see the world, and prove yourself. You'll come back with confidence you can't get anywhere else.

</comment></comment><comment><USER14> Jasmine Lynn Schurr...</comment>