My company sold for $100M and I got zilch – how can that be? - <AUTHOR> https://medium.com/help-me-heidi/my-company-sold-for-100-million-and-i-got-zilch-how-can-that-be-f7be0563f1f8 <comment><USER2> This matters more now that the current crop of tech companies have taken _so much_ money.

In the old days, when software companies sold software rather than traditional services enhanced by software, it was common to get to profitability around the B round and then never take any more investment after that. Google took $25-35M and then nothing until IPO, running the company from 2001-2004 off cashflow. Microsoft took nothing except a small mezzanine round (to align incentives with the I-bankers) right before IPO. Github took a $50M Series A on a valuation of $500M; VCs owned 10% of the company, and the 3 founders + employees split the remaining 90% of its $7.5B acquisition. Indeed took a Series A and is profitable. Atlassian took a $60M Series A 8 years after starting the company, when it was already profitable. PlentyOfFish, HotOrNot, Reddit, Wufoo all raised either nothing or just angel money before being acquired.

When you're capital efficient, you get to keep the majority of any sale price.

The current crop of unicorns like Uber, Lyft, WeWork, Postmates, DoorDash, Instacart, AirBnB, and Stripe have all taken massive amounts of capital though, sometimes in the multi billions of dollars. That has to be returned to the investors before the common shares (founders & employees) make _anything_. If they hit on hard times before a liquidity event, there's a good chance that the common will be wiped out, and investors effectively own the company. Why shouldn't they, when they put up all the money that the company's been burning?

<comment><USER3> All the companies you're talking about have 1 thing in common: they're considered successes. You're going back in time and cherry picking companies that made it out alive. The early 00s/late 90s were full of companies that took Google levels of money that crashed and burned. There were also tons of companies that took little-to-no outside funding that crashed and burned.

<comment><USER2> For brevity I omitted all of the dot-com flameouts and also the Web 2.0 startups that never got off the ground, but IMHO they support my larger point.

In the late 90s we had a lot of companies that took _a lot_ of money, and the founders and employees got nothing out of them other than painful experiences. When you look at one of the successful "fat" startups (PayPal), Max Levchin's take ($34M) of the $1.6B acquisition was on the same order as the Wufoo founder's take of their $35M acquisition, or the Viaweb founders take of their $49M acquisition. Even Amazon - probably the most successful "fat" startup in history - languished below its dot-com peak until AWS came out in 2007.

Margins matter. Capital efficiency matters. If you want to actually make money, you should make lots of profits on small amounts of invested capital, not lose lots of money on large amounts of invested capital.

<comment><USER4> But what if your competitor is willing to lose lots of money on large amounts of invested capital until you are out of business?

Uber and Lyft have it tough in that regard. At the end of the day they've got product market fit in a profitable industry. I mean the very worst case is they become more efficient cab companies, and cab companies have been making money for a very long time.

Their prices are artificially low due to competition, and they are in sort of a prisoner's dilemma. eventually one of them will go broke and the other will raise prices, or something will change about the market (such as driverless cars coming). But if one of them passes up raising and losing money they lose.

<comment><USER5> Then you have a lousy business model, and you aren't going to make lots of money, and you aren't going to create lots of value, and, as a result, probably won't get a massive payout.

<comment><USER4> I don't think that's true. Uber's business model is the same as every cab company, but better. It's just a temporary problem (competition forcing them to sell below market value) that they need to overcome.

Their financial struggles are due to them pricing well below what taxi cabs do. But if Uber priced the same as cabs they'd still be an infinitely better service and make lots of money, once Lyft isn't there undercutting.

It reminds me a lot of airlines. They were all hemorrhaging money similarly, even for a decade or two after deregulation, until they consolidated down into a few and raised prices.

<comment><USER6> Are you arguing that the US airline industry spins profits? I mean, sure, you have some carriers like Southwest which do, but as a friend of mine once put it, the US airline industry exists mainly as an outlet for Boeing to sell airplanes...

<comment><USER4> That was true for a long time but hasn't been for awhile. They now are mostly profitable. Delta makes almost as much as Southwest and the other majors are still in the billions.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER7> As a former founder, I am often surprised by the incredible spend at some startups I've visited. The biggest is headcount - so many fluff jobs.

How many designers does an early stage startup really need? 1, 2, 10, 20, 50? How many SREs do you need when your site is just a handful of AWS instances? How many sales people do you need when your product isn't ready for sale yet?

Each employee fully loaded in the bay area is what like $150-$300K? 20 people like that will chew through your Series A before you know what happened.

Bad (for startups) deals get done when you start running out of runway. Once you're out of runway, you'll sign a 4x liquidation preference at a low valuation because it gets you an infusion of cash now. Now the VCs own you.

<comment><USER8> Instagram had what, 12 employees when it got bought for 1 billion?

I worked for a small company that fired half the employees (10->5, mostly marketing/sales execs) and absolutely nothing changed. Our revenue actually increased over the next year, not to mention gross sales not paying those salaries. We were originally going to replace them but decided to wait it out for a full year because we realized we didn't need them.

They were all expert busy-workers, who used to try hard when they first joined but got lazy about 2yrs in and started phoning it in. Startups and small businesses have no time for those types of people.

The other massive expense VC-backed companies waste money on are high-paid consultants (and lawyers) from the big business corporatey world.

<comment><USER9> > Instagram had what, 12 employees when it got bought for 1 billion?

Which was really a pittance.

I acknowledge hindsight is 20/20, but it's interesting to see posts here lamenting that startups hire too many people, when selling for much too little is surely a more grievous financial mistake.

Or to put it another way, if they had 75 engineers when they sold for a billion, the tragedy would still not be that they had too many engineers.

<comment><USER8> A billion dollars for a 2yr old company in a highly competitive mobile space is a pretty good deal...

They probably saw the risk in FB or Snapchats or w/e competing with them. It was just photos with filters at that point. Not a massive social network like it's become.

</comment></comment></comment></comment><comment><USER10> Heidi Roizen, VC, most definitely does _not_ feel Former Millionaire's pain. Yes, liquidation preference overhang is the mechanism. However, the company got sold for $100M. Who sold the company? The founders + the VCs and they got theirs. They could have structured the deal to give the employees something. They didn't.

The advice here is simple. Walk. Former Millionaire owes absolutely nothing to the new company. Staying rewards this screwjob. If the founders + VCs want this Engineering VP to stay then they have to pay the VP to stay.

This could have been handled better if the founders and VCs had left something on the table for the workers. That was a choice they made.

<comment><USER2> She mentions this in the article - most deals are structured with carve-outs so that _specifically those employees you want to stay_ get multi-million payouts (over multiple years) as long as they stay with the employer. If there was no such carve-out for the VP, it means the acquirer doesn't want them.

The answer is still "walk", but the acquirer is not going to care. The reason to walk is that there's no sense staying in a job where your employer doesn't want you and isn't going to reward you. It's for your own self-respect, not to stick it to the man.

<comment><USER10> I'm going to plead guilty to giving up after I saw the preference overhang thrust of the article. She in fact gives a good outline of the issues involved. Maybe I had Travis Kalanick and Adam Neumann in the back of my mind.

Still the element of unfairness about is that _Certain key employees were incentivized with a " carve-out " in order to stay through the transaction and make sure it would happen_. Using the example, four years is a long time to be rewarded with squat. However, Roizen also points out that common stock is priced lower than preferred.

Usually someone like an engineering VP or a senior contributor will figure things out well before that and bail. The idea that this was somehow a surprise is difficult to accept.

Yes, it is definitely for your own self respect.

</comment></comment></comment><comment><USER11> FWIW, I kind of don't believe that this question is real. Questioner clams that he is a VP but also:

> He has no idea how liquidation preferences work

> He was "told" that the company was being acquired (instead of being involved > in the sale)

> No one at the company walked him through how his stock was valued, even > after the acquisition. To the point that he thinks he needs to hire a > lawyer.

It's a fine question to use as a lead in to explaining how stock options work, and that's a fine thing to write about. But I'd bet money that the author made up the question.

<comment><USER12> The title is not a meaningful gauge of a person's knowledge or experience. It wouldn't be unheard of for a VP at a company with 50 employees to have similar responsibilities as a manager at a company with 1000 employees. They could also be VP of Engineering/Customer Service/etc. which would typically not be expected to have much, if any, legal or finance knowledge.

<comment><USER11> Ya, I'm not saying I'm 100% confident in my assessment. Just saying that reading it feels pretty fishy.

Just my opinion.

</comment></comment></comment><comment><USER13> I feel like legal manipulation is very bad for the startup ecosystem. Even here, at the YC forums, people assume their startup equity is worth $0 and advise you to go with a FAANG (or day that they broke even with friends at faangs after their exits). How is a legitimate startup supposed to recruit the best people under these conditions?

<comment><USER14> > How is a legitimate startup supposed to recruit the best people under these > conditions?

Easy. Disclose the preference of the terms you got from investors to your early employees.

This problem is self created. If you don't tell them the terms of your deal, they rightfully assume the terms will screw them, since otherwise why wouldn't you be transparent? Good workers rationally and rightfully go to FAANG instead of a startup if it doesn't feel like the startup is being fair.

Honestly, startups should be more transparent, because they can't compete on money. If they can't even offer trust and upside, they are offering literally nothing over an established public company.

<comment><USER15> So many people flock to startups because they didn't want to go work for a large soulless corporation (often taking a pay cut in lieu of equity) -- only to discover that startups can also be soulless corporations that focus on greed more than anything else.

Edited to add:

It would be nice if there was an equity dashboard inside each and every startup that basically said, "If the company is sold today at $100M, you get $X." Not only would it serve as motivation, but it would also show every effect every VCO demand on the corporation to your equity.

Ideally it would be a graph over time so you can see if your equity stake is going down or up in value, and you can make an informed decision about leaving. Also many of the VCO shenanigans might stop if people know ahead of time what it means.

<comment><USER16> The comparison of "soul" at startups vs established companies reminds me of the old joke about capitalism vs. communism:

 _In capitalism man exploits man, in communism it's the other way around._

</comment></comment></comment></comment><comment> mark-r One thing to remember is that the acquirer has probably done this before while the acquiree is a first-timer. The details are almost certainly going to favor the party with the most experience.

I once worked for a company that was acquired. At the first all-hands meeting after the acquisition closing, the CEO was practically gloating about how cheaply he was able to get us. All because he knew how to structure the deal in a way that wasn't transparent to our company owner.

<comment><USER17> Your company should have retained investment bankers. Just like you get a lawyer to represent you in court.

<comment><USER18> Probably not a company with any professional investors on board.

<comment> mark-r Correct. The founder probably retained 90% or more of the stock, its growth was completely organic. I was very lucky to be part of it.

<comment><USER18> If there is one way a small shareholder can ensure that they are going to be treated well it is to see to it that they hold the exact same kind of stock as a much larger shareholder. That way a bigger fish will fight for your rights with a lot more power than you ever could do by yourself. There are then still quite a few ways in which you could be screwed but far fewer than without that precaution.

<comment><USER19> Indeed. This is also why you should make sure any equity you get in the acquirer as part of the deal is as high up the preference stack as possible.

</comment></comment></comment></comment></comment></comment><comment><USER20> I highly recommend reading Venture Deals by Brad Feld - this book alone lays out perfectly how minuscule are your chances of getting rich, working for a startup.

The areas to lose money are: liquidation preferences, insuficient voting rights, dilution, different stock classes, general benefits to investor's equity compared to staff equity, investor drag-along, 409A valuation, options expiration or company staying private forever.

<comment><USER21> [https://www.amazon.com/Venture-Deals-Smarter-Lawyer- Capitali...](https://www.amazon.com/Venture-Deals-Smarter-Lawyer- Capitalist/dp/1119594820)

Book is here

</comment></comment><comment><USER22> For anyone thinking about working for startups:

\- don't treat verbal agreements seriously

\- common stock is 99.9% worthless, you want preferred stock

\- liquidation preference is important, if company doesn't want to tell you, insist on market-rate salary

\- if a company tries to switch from an LLC to C-Corp and move you from being a minority owner of LLC (0.1-3%) into a common-stock owner of a C-Corp with the same %, block/sue them; you were working for thieves

<comment><USER23> It's fine to want preferred stock, but it's pretty rare for employees to ever receive it (unless they put up cash) -- it's reserved for investors to avoid a sandbagging + abscond with the money raised scenario.

<comment><USER24> And employees deserve to be sandbagged? That seems monumentally unfair...

<comment><USER25> Preferred stock (and specifically, liquidity preferences-- the common 1x, nonparticipating term) exists to ensure that if investors put in $10M for 20% of a company, you don't immediately sell the company for $10M and give them $2M back, and split $8M among yourselves. The deal is structured so that the investors have their option of either getting their original money returned or their share of the proportional share of the returns.

<comment><USER26> I've been in the middle of the opposite. All numbers are synthesized. Founders set up company, initially fund it themselves, take some rounds of investment with preferred, gives up some control. Company runs low on cash, finds new investment from "trustworthy" investors, all preferred. The founders hit 49%, the investors gain control, and make a purchase offer for the precise value of the preferred shares to themselves, which they decide to accept. All common shareholders are instantly out in the cold, with nothing (including the founders, who were utterly screwed).

The first thing they did was fire the founders, of course.

So...foolish founders? Yes. But wait! Foolish investors? YES!!

Because they absolutely screwed _every_ employee, almost all the employees walked the afternoon we were informed.

I've never been prouder of the people I worked with. I think there were four people (tech support/admin) left out of 20 or so. Hard to remember now...so long ago.

For several hours the shitball investors were exceptionally proud of themselves...and then they realized they'd bought a pile of PCs they had no idea how to use. Plus bonus shitty furniture! And goodbye investment, of course.

We all formed a new company within a few weeks. The original founders somehow got money to get us started again...which we did, from absolutely nothing. We rewrote a similar product suite (but better!) in about 9 months, and went to the next big industry show with it.

Shitball investors found out, and promptly sued us (mild shock), claiming without evidence that we must have stolen the code on the way out. Since I was there for every single line of code we wrote the second time around, it was infuriating.

The ball bounces through the courts...they continued to harass us...and all does not necessarily end well.

In any case, don't lose control ;)

<comment><USER25> > I've been in the middle of the opposite. All numbers are synthesized. > Founders set up company, initially fund it themselves, take some rounds of > investment with preferred, gives up some control. Company runs low on cash, > finds new investment from "trustworthy" investors, all preferred. The > founders hit 49%, the investors gain control, and make a purchase offer for > the precise value of the preferred shares to themselves, which they decide > to accept. All common shareholders are instantly out in the cold, with > nothing (including the founders, who were utterly screwed).

Usually you structure your board in a way that prevents this-- not to mention that you could likely prevail in litigation if these are the facts because the board has a fiduciary duty to all investors, not just preferred: only if there is no reasonable prospect for common to get something can you accept an offer like this. Not to mention that when a controlling shareholder enters into a transaction with the corporation they have the duty of showing that the transaction is fair for all involved.

</comment></comment></comment></comment></comment></comment><comment><USER27> Is there any good book for explaining all of these startup evaluation, fundraising, etc. terms, how they work, what to ask about, etc.?

<comment><USER28> Very briefly: for employees to have a good outcome, the company must be a success _relative to the funding_. I'd love to say that founders are in the same boat as employees, but it's not true. Unethical founders can engineer situations where they alone get millions of dollars and no other employees do. That can be somewhat justifiable (eg taking $1m or something off the table in a round B for a company that eventually fails), or it can be poisonous (Adam from wework getting north of a billion in cash for a company that will probably go bankrupt).

With respect to the article:

$100m exit on $10m funding? Employees should do well. $100m exit on $110m funding? You can't expect a good outcome for the employees in that case. They may get some sort of retention bonus in an acquisition, but that's about it.

Another thing all employees should know is that, as a rule of thumb, you need to triple your valuation between funding rounds. That is not as true late, ie when you have enormous $100m + rounds that are raised in lieu of going public with more of a debt structure than an investment structure.

You should be skeptical of companies that have raised too much money. Eg if a company raises a $100m round B, they are basically saying their metrics have to justify a multibillion dollar valuation.

Anyway, there's a bunch of good links, but (and I'm a company founder), I'd tell you to keep a couple crucial things in mind:

First, don't work for dodgy founders. I understand that's not easy for you to evaluate, but there are ways you can figure out. eg have the founders hired lots of people they're previously worked with? That's a good sign.

Second, if you want a good outcome, the company must be growing. At a startup, you are comped on growth. You should be unafraid to fire founders and execs (by quitting) that are unable to grow the company. That's not to say quit at the first rough patch, but every year when you are deciding if you re-up for another year or not, you should evaluate the metrics over the last year.

Third, understand the runway and the metrics that get you the next round or an exit. Be unafraid to demand to know all the above, and expect positive performance on all those things.

<comment><USER29> "they're previously worked with? That's a good sign."

As in good, or bad?

<comment><USER30> I think the intent to say is that if people they previously worked with are willing to work with them again, that is positive because it shows that previous employees/partners haven't been screwed over.

</comment></comment></comment></comment><comment><USER31> I have had this conversation with so many people now. If your (private) company has taken VC money, options are toilet paper. Treat them as valueless scraps. Now, maybe you'll get lucky, and make something off of them, but that should be a pleasant surprise, not an expectation. Cash is king. If you're in it for the money, go work at MegaCorp, and take a sizeable, steady paycheck.

</comment><comment><USER32> "In fact, one of my kids was recently interviewing at a startup and I told her to ask about the preferred overhang — she said the interviewer looked at her like she was asking about his sex life! She didn't get a call-back."

I'll do you one better. This is like asking someone you're about to have sex with if they have an STD and then having them act indignant and not answer. And you should do the same thing in both cases and run away.

<comment><USER33> It's also not the most polite/politic way to ask about it. A neutral way to get the same information is to ask about the cap table and then go from there if needed.

<comment><USER34> Salary negotiation (which is what this is) is not the time to be super polite and dance around important topics.

<comment><USER33> Actually, it wasn't salary negotiation because it was pre-offer. It was during an interview, and the author lamented that " _She didn't get a call-back_ ".

I agree that during salary negotiations it is less important to tiptoe around things. Perhaps it was a bit premature to have even inquired about the cap table in any way during an interview, unless the interviewer had just mentioned how many options would be offered to a selected candidate (which would be oddly specific, pre-offer).

<comment><USER34> Discussing your stock/option grant is salary negotiation, even if it happens out of the standard order :)

</comment></comment></comment></comment></comment><comment><USER35> The comment on "founders getting offended when asked about the preferred overhang" is a point I think that is getting missed. Yes, there is the whole "caveat emptor" of being an equity employee, but there is clearly a culture of hiding all of the necessary information for making an informed decision.

In a lot of ways, I think the over-emphasis on "startups change the world" has been a contribution to this. There is a greater supply of people who "want to work in a startup" (or rather, think they like the whatever idea they have in their head of what a startup means) than there is demand for early stage employees. So any founders who might have something to hide will have their pick of people to fleece. They can easily pass on anyone who asks the the probing questions about the real value of the company and just wait for a shmuck to come along who doesn't ask.

What can we do to educate the general populace enough to dry up that pool of shmucks? In the long run, the way things are has to be terrible for investors, too. They put their money into founders who aren't being up front with their employees, and probably not getting the best employees because of it.

</comment><comment><USER36> > Again, let me emphasize, this is not inherently unfair.

I guess our definitions of what is "unfair" are quite different. I think a better term here would be "illegal". It's most certainly not illegal - but I definitely would not consider it _fair_.

Companies throw options at employees - or potential employees - like candy. They imply, explicitly or not, that when the company gets big and successful, these options are going to be worth tons of money.

Most of us here know they're probably worthless. But executives/entrepreneurs/whoever most definitely suggest otherwise. So it's more like false advertising.

Now is that "fair"? I don't personally think so. I think it's pretty dishonest. I think when sale time comes around, they most certainly realize that these employees think they're finally going to cash in, and they are more than happy to let them think, even though they know otherwise.

Obviously there are exceptions. There are occasions where they actually do end up being worth something. Or where the seniors folks are very clear about how worthless these things actually are. But, in my opinion at least, those are most definitely the exception to the rule. I'm also pretty cynical for the most part, too. So there's that.

<comment><USER37> I think if a venture is unsuccessful employees shouldn't expect to make money from their options. A venture that raises $60MM and sells for $100MM 4 years later is a failure. Making nothing in a case like that seems fair to me. What is _perhaps_ unfair, is if the employee worked for substantially below market wages all of that time, and particularly if they were given a much rosier picture than was accurate. But we shouldn't assume those things are always true.

<comment><USER38> I think the problem is that it's often difficult to pinpoint the crux of the unfairness, but still feel it all the same. In my opinion, the unfairness is engendered by the realization that time and money are merely different units of the same thing. Which means the investors are getting guarantees on their invested time, but the folks who did all the work are completely unable to recoup any of the time they invested. When we cast the investments in the same units, it clarifies the nature of the inequity.

Investors convert dollars into time (like a conversion from matter to energy), and workers convert time into dollars (energy to matter). Even in physics a seemingly small amount of matter has enormous power with respect to the energy it can unleash. But it can take a lot of energy to form the tiniest lump of matter. Investors are turning their matter, their dollars, into time. A lot of money, in that respect, is essentially lots of time -- more time than you have life, if you have enough of it. So you can _do_ more, by buying someone else's time.

For simplicity, if we ignore non-labor costs (labor is the largest expense in most software startups, e.g.), it would mean that the invested dollars purchased an _EQUAL_ amount of invested time. That is, the investors dollars were converted, with perfect efficiency to time (unless they overpaid the workers, or the workers were underpaid), which means there was conservation of dollars/time. This implies a balance of the two sides of the equation, which means at best (again, for simplicity, only accounting labor costs) the investors could only be guaranteed a share of 50% of the purchase of the company. Or at least that is how it should work, in my opinion.

<comment><USER37> If the worker is paid for their time, they aren't owed anything for it. If they are taking below market - as I said that may be unfair - then at most their investment is the delta to market compensation.

Also, investors puts in all the money upfront; there is a concept called time value of money that applies here, and what it means is that money paid upfront is worth more than a distribution of the same amount over time. The higher the cost of borrowing (cost of capital), the more valuable that upfront investment is.

<comment><USER38> If the investor is paid for their dollars, then they aren't owed anything for them either by the same logic. And they most definitely are paid. Investors are _compensated_ for their dollars because they exchange those dollars for time, just as the worker exchanges their time for dollars.

Whether an investor puts money up front or not is irrelevant, as it is only converted to time incrementally as the time is traded for it. Any excess dollars in the bank can, and frequently are, returned to the investor in an exit. Hence they only trade in dollars to match what is invested in time (when only accounting for labor).

</comment></comment></comment></comment></comment><comment><USER39> I have found that in job negotiations, many startup founders are highly reluctant to discuss what the value of their stock option grant is worth, much less what other conditions may impact the payout.

Has anyone else had this experience and what do they advise others to do when faced with the dilemma of turning down an offer due to a lack of transparency into the option grant?

<comment><USER40> Yep very little transparency. Ask these questions!! Don't take the job? Take another job? Hope that the company will IPO? Or that an IPO is the path?

<comment><USER39> Good advice. However, from a negotiation POV, it's difficult since there are so many alternative people who only ask how many shares they will get, and think that more shares is better than less, rather than what they are worth. It's comical. This makes it easy to just pick one of those people and skip the few who know what's going on. For a founder or VC, this is like free money, since you can promise whatever you want ( 100 zillion shares) and pay them whatever is convenient. Eventually, this will erode the trust needed for Silicon Valley to work.

</comment></comment></comment><comment><USER41> Simply, the 1% 'shares' were actually shares in a company that only begins existing if the company you worked for surpasses some value $X. Example, if the company is sold for $X + $50 million then you have 1% of $50mm. The con with these agreements is that you, the little-person-with-no-leverage, you are not told the X while you are working there. Ask your CFO, they will say in a practiced tone, "We don't give out that information".

IMO the best way to tell if the company is a winner, is to see big growth in sales/market size, especially after funding rounds. If the company is on its third funding round with no revenue and no clients then it's one of these weird VC zombie dogs that manage to get funding because of spectacular bullshit artistry by the CEO (likely with a sales background). In which case your shares are worthless but the pay/gig might be interesting.

</comment><comment><USER42> There should be a simpler way. All this crap is too complicated.

Even if you manage to somehow do the research and understand it well at some point, unless your working with options grants on a regular basis, you'll probably forget it all before you ever leave the company.

People don't have time to do all this stuff and not get fucked over.

<comment><USER11> It's not that complicated.

If a company exists for less money than the amount invested in the company then common stock is worth nothing.

If it exists for more than the amount invested then common stock will (almost always) be worth something.

If you exit for 3X the amount invested you've done allright and will generally see a modest return on your stock.

If you exit for 10X the amount invested you've done real good and will generally see a pretty good return on your stock.

If you're smart enough to learn how to code, you're smart enough to understand this stuff. I promise.

</comment></comment><comment><USER43> We usually called it the liquidation stack.

Because of different trigger points, whether different investors are participating or non participating, you needed a spreadsheet to figure out what common gets, for each potential outcome. There is no way to have a conversation with a potential employee about the liquidation stack, it is usually far too complex.

More insideously, the buyer can change the rules. As long as the sellers vote for it, you can do things like wash out common, recap common, give new grants that are incentive grants with a one year cliff.

Option holders don't vote, so you won't even see what they are voting on.

That kind of stuff invites shareholder lawsuits, but it is ill advised to sue because then you are a trouble maker. Otoh, not suing means you are a pushover.

An example of a shareholder wash out was when jobs took over pixar, so i was told by a friend who had shares.

</comment><comment><USER44> This article is really weird, because the person in Dogpatch says they were granted OPTIONS not stock. So it's possible that this doesn't even touch on liquidation preferences and the strike price was just higher than the sale price.

But if we assume that this was RSUs, or that the strike price was just a fraction of the sale price, I still think the common advice of "consider start-up equity to be worthless" is a little overzealous. Unless the founders accepted some outrageous terms it's probably the case that your options are worth a lot _in a company that 's doing well_. If the company stops growing or takes a down round that's when you should start thinking of your shares as useless.

</comment><comment><USER45> Why is it that the common shares holders are not properly informed that a certain investment round basically reduced their cash-out to 0? The incentives to invest more time into the company is greatly reduced. The person affected who is asking to Heidi said that they were working very hard, considering that they owned 1% of the shares of the company.

</comment><comment><USER46> Even as a very early employee (say number 20) of a unicorn probably will not make that much...you'd be lucky to get $2M if it sold for $1B...

Most people are better off just working at a big company if they want to build wealth.

<comment><USER47> That's what I thought. The OP was hoping to receive 1mm for 4 years of work. VP role will give that easy in any sizable company.

<comment><USER48> Much easier to become a senior programmer at a 3-person startup than a VP at a sizable company.

<comment><USER49> Which is partially why the VP makes several times more at a stable firm vs options/stock/equity that are a lottery ticket, more or less. The VP won't get paid if the company sells but they can by a new car each year.

</comment></comment></comment></comment><comment><USER50> A lot of words to say something very simple - information asymmetry via contractual complexity is being abused to profit those writing the contracts.

<comment><USER11> What information asymmetry? Liquidation preferences are perfectly fair, and not at all a mystery. Especially in the year 2019 when there has been an enormous amount written about them on the internet.

<comment><USER50> The parasites writing these contracts are counting on people not taking the time to become experts in shady startup contracts. As evidenced by this article, it's working.

<comment><USER11> The contracts in question aren't shady in the majority of cases.

Again, liquidation preferences are perfectly fair.

<comment><USER51> Honest question here:

as an employee (non-founder) do you have a say in liquidation preferences of future rounds of investment?

<comment><USER11> It depends on whether your role in the company means that you are part of negotiating the deal. If you are the CEO: then probably yes. If you're an IC engineer: then probably not.

Relatedly, most of these deal terms are pretty standardized. In the vast majority of cases there aren't a lot of negotiations around liquidation preferences, only negotiations around valuations. The exceptions to the rule tend to happen for very large or late stage fundraises.

</comment></comment></comment></comment></comment></comment><comment><USER52> From a 40,000 foot view, it's odd that employees who are investing their professional effort are relegated to a lower equity tier. I think the person asking the question in the article makes a valid point: why is it _fair_ for human capital to be devalued in this way?

<comment><USER11> It's not odd at all.

If you start a company and you turn $200 million of investment into an exit of $100 million dollars you _haven 't done anything valuable._ Why would you expect your stock to be worth anything?

<comment><USER53> Why should investors expect their full investment back when they did a bad job choosing who to invest in?

I don't think it's reasonable to pretend that the current system exists because it's the fairest. Investors exert more negotiating power than employees, and that's the reason they get better terms.

<comment><USER54> I once stumbled on a rant by a post doc CS student. In addition to an essay why being able to do type erasure is good and why actually doing type erasure is terrible. He had an essay with the observation that while capital has the ability to pull their money and reinvest it elsewhere if they dislike returns and risk, skilled workers are kinda stuck with whatever skill they've invested in. And capital can diversify while a worker usually is stuck with exactly one investment. Given that it seems shitty to give capital better tax preferences than earned income.

</comment></comment></comment></comment><comment><USER55> "It's all in the fine print," and the fine print can say anything.

I would say that this is a learning lesson for all who think options will make them rich. If you're at a company make sure you get paid what you're worth in money. Don't count on options as part of your compensation. You are unlikely to get rich because of them. As we have seen over and over again.

<comment><USER56> in a perfect world options would (literally) be a bonus. In the real world people are playing stock market with their careers.

</comment></comment><comment><USER57> This is going to happen more and more often. Companies chased jazzy valuations, they made crazy deals, and now values are starting to drop (and stuff like liquidation preferences come into play).

I know of a company that was sold for $1bn+ and common equity got almost zero. It happens, it is a very silly thing to angry about though (because the valuation was never $1bn+).

</comment><comment><USER58> This is why, for me, VC money is a last resort and an admission of defeat of sorts. If my business cannot be a business, i.e., an entity that earn's it's keep and makes profit, then maybe it's not meant to be. VC money might prolong it's life, but at that point, they are the real owners of this "entity".

<comment><USER49> With that, the founders/core group can deploy VC cash injections to stay paid and in charge vs closing shop. Quitting can be really hard for highly driven people or those thinking their idea is going to work even when the numbers say it isn't making money.

There's an incentive mismatch then for them to pursue VC funding and keep going while employees with stock won't notice their probably worthless options becoming definitely worthless options or at best a bonus when all is sold. Like my own performance/holiday bonus at a stable firm, options are nice and possibly count toward total compensation but aren't hard cash and should not be relied upon as an investment or in your budget. Bird in hand and all that.

<comment><USER58> I decline any offer that puts equity instead of pay. Options, equity etc. is worthless. The only way it's statistically worth anything is if it's your business.

On a side note, I wish Pud would revive fuckedcompany.com (with the last snapshot of the db before it went down). It's still relevant.

</comment></comment></comment><comment><USER59> I find it "funny" that the whole sharing and startup economy is basically built on top of something that resembles a Ponzi-scheme (not in terms of the actual operation of the scheme, but in the way how unfair the scheme is for different people in different roles). And the fact that the software industry happily embraces this modus operandi is simply mind boggling.

As far as I am concerned this scheme with the stock options (some people call them opportunity or investment) never should be substitute to social contracts, like a monthly pay check.

I find it especially nefarious the fact that people who invest time are penalized over people who invest money. This is especially true when the 4-5 year long time investment of a developer today can be easily worth millions. And a dozen developers' time investment can easily reach tens of millions.

</comment><comment><USER18> That's a nice answer but the question really needed a lot more information for it to be the right answer. There are quite a few ways in which small shareholders can get screwed, this article illustrates just one of them and quite possibly not the one that bit the questioner.

<comment><USER60> This is exactly my thought. The author is just guessing. There are 95 comments here, and they are just guessing too.

The real reason of why the employee got zilch would be found by just reading the documentation - the legal agreements awarding the stock options, the purchase and sale agreements, incorporation docs...

<comment><USER18> There is some chance that the questioner doesn't even exist and that question was just written to be able to write the article in response to it.

<comment><USER11> I very strongly believe this to be the case. The details don't feel right.

[https://news.ycombinator.com/item?id=21359698](https://news.ycombinator.com/item?id=21359698)

</comment></comment></comment></comment><comment><USER61> Basically if you are working at startup value your options at 0 and you will be right 99% of the time.

<comment><USER11> If anyone reading this is working at a startup and values their options at zero please get in contact with me (contact info in my profile) and we'll find a way for you to sell me your equity for $1.

<comment><USER62> And if the seller in turn uses your $1 to buy a lottery ticket you both would have roughly equal chance of getting rich :)

<comment><USER11> I think that you are wrong and am demonstrating that with my willingness to put my money where my mouth is.

<comment><USER63> Are you really putting your money where your mouth is? Even if I have shares I think are worthless, your offer to buy them is also worthless, so why bother? Actually, your offer is worse than nothing, as I would spend hours dealing with the share purchase agreement without assurance you will follow through and it would send a clear signal to the company that pays me that I believe it's worthless.

</comment></comment></comment></comment></comment><comment><USER64> 2 start ups behind, shares worth 0. both companies took on half a billion (!!!) in funding combined - from VCs, gov etc. Revenue = close to nothing.

I feel that start ups mostly are cash burn machines built to pay cushy salaries to C-level execs and build "impressive" resumes again for the execs. For most other folks, they are a just stepping stone to a "real" world job in a stable corporation.

assume, your shares are worthless, basically a lottery ticket! In both companies i knew that some people put in real money to buy out options, 100s thousands of dollars amounts. Now they are sitting on a bunch of 0s.

Learn from others mistakes! They are free!

</comment><comment><USER65> As a normal individual contributor not at the C-level or even management level, I just assume the value of any options/shares I receive is zero unless an accountant or the IRS tells me I should believe otherwise. Too many goofy fine-print shenanigans like this to keep track of.

<comment><USER28> This doesn't sound like shenanigans. Reading between the lines:

 _> While it hasn't ended up becoming the unicorn I was hoping for_

it sounds like the company wasn't a success. It could be the preference overhang, or it could be a difficult acquisition.

Fundamentally, if the company isn't a success _relative to the funding_ , employees aren't going to get paid. Employees can get paid quite well on a $100m exit if eg the funding structure was correct for the exit size.

<comment><USER66> Unicorn refers only to a billion dollar startup, and they sold it for 1/10 of that.

<comment><USER28> Right, but my guess is people start talking about being a unicorn _probably_ means they did a unicorn-sized funding round. So total raised is comfortably north of $0.1B.

</comment></comment></comment></comment><comment><USER67> Investor are short-sighted when they steal all the money from startup employees. Equity used to be the one way that startups could compete for talent but the more the word gets out that it's a scam the less that startups are able to compete.

<comment><USER68> The funny thing that all this might be funded by the big corps who don't really need any startups and competitors around: it's easier to invest 20-30 billions into destroying the reputation of the startup concept, than to continue buying them at 1-15 billions each.

</comment></comment><comment><USER69> Because your company raised money from VCs.

This will never happen at a bootstrapped company.

</comment><comment><USER70> What questions (specifically) should have this person asked upfront when having their options offer prior to employment?

What should have they asked long the way to check on when there were fundraising rounds?

<comment><USER71> You'll almost never get preferred shares unless you at C-level or put your own money.

The only thing you negotiate is more salary in cash and assume your options are just lottery tickets with very high odds

</comment></comment><comment><USER72> It's stupid that startups don't tell people going in what the overhang is, or that you won't get called back or get weird looks. Everyone is looking out for their bottom line, wtf would a startup expect any less from an employee that's about to spend 60+ hours a week toiling on the product? In any case, this is good info and I'll pass it onto my kids if they ever decide to join or build a startup. Hopefully they decide to be their own founders. I'll supply the garage :) .

<comment><USER73> Based on my XP, getting details about options is real difficult. HR and hiring managers are used to people who barely understand the vesting schedule, so when you start asking about percentage, strike price, etc etc it's kind of unusual. And yeah, companies tend to not be transparent simply because they play on people's ignorance to make attract them with options while in 99% of cases you will never see a penny from these.

</comment></comment><comment><USER74> How does owning the 1% stock that doesn't get a pay out when the purchase occurs affect taxes? Do you have to pay taxes on the perceived value of the 1%? Can you consider it a loss?

<comment><USER11> Questioner probably owned options for which he paid no money. Therefore there is no loss. Nor is there a gain on which they owe taxes.

</comment></comment><comment><USER75> My former company got acquired for $150 million after raising $87 million. I am not expecting anything. If at all I can expect a tax write off for the shares that I bought

</comment><comment><USER76> It's not uncommon employees got nothing. Some even need to pay tax when exercising the options. Remember Good Technology?

[https://www.nytimes.com/2015/12/27/technology/when-a- unicorn...](https://www.nytimes.com/2015/12/27/technology/when-a-unicorn- start-up-stumbles-its-employees-get-hurt.html)

</comment><comment> denton-scratch I feel for you.

I don't know how old you are, but my guess is that you are young, and you get another shot. Don't be dismayed. Try again.

$100M is an awful lot of money - I'd consider $1M to be a lot. I I understand that you got zilch, and if I were you, I'd be angry too. But you seem to be clever - get over it, and have another go.

/me just another employee. Never been an entrepreneur. Not smart enough.

</comment><comment><USER77> OK, what I understood from the article is that the guy owned 1% not of the company's acquisition price (as he thought), but 1% from (price - X) where X was unknown and turned out to be greater or equal to the price.

The fact that he didn't realize it until the very end makes the author's advise very correct - "make sure you understand exactly what you own".

</comment><comment><USER78> This is why I've been saying for years that stock grants/options/RSUs are like playing the lotto, and salary/benefits are more important. Particularly when dealing with privately held firms where you have no ability to sell on the open market.

They're also a tool to keep people in roles they no longer want, because of a promise of a great payoff someday.

</comment><comment><USER79> This is why you should get a proper salary even if you are working at a "hot startup". Were you expecting a $1m gross payout from owning 1% of a $100m company? That's the kind of gross income you'd get every 2 years of working at Googbookagramazon. Consider opportunity costs carefully.

</comment><comment><USER80> Just in case anyone wants to visualize all the things in the article here's the good tool for it: [https://dlopuch.github.io/venture- dealr/](https://dlopuch.github.io/venture-dealr/)

</comment><comment><USER81> Check what the owners got, and if they got any payout with the 50% dilution event. If the owners also got nothing, then the investors took it all. But if the owners got say $50 from the deal and you got nothing for your 2% you got screwed.

</comment><comment><USER82> Options holders are not shareholders. Options holders are not owners of the company. Options holders are not investors in the company.

Too many forget these things and are shocked when then find out some event doesn't treat them like one of the above.

</comment><comment><USER83> If you work in startup business, you should really take some finance classes to learn how it works.

Your chances of getting any money out of the equity are basically 0%, no matter if company succeeds or not

</comment><comment><USER73> I had never heard of this "carved-out" money. Is anyone familiar with this? It sounds a little like retention bonus based on the provided example.

</comment><comment><USER84> Honestly the only business I would be comfortable accepting options or even stock in lieu of adequate compensation is the guillotine factory.

</comment><comment><USER85> I'm of the opinion that the scariest words to a startup founder/employee should be "exit below the liquidity preference"

</comment><comment><USER86> This is the sentence that is the core reason:

"if you raised more than your company is now being sold for, you will get nothing"

</comment><comment><USER87> The comments were a very informative read!

I'm sure they'll explain it to their kids as a ponzi scheme with a paycheck.

</comment><comment><USER88> Yeah, if your company raises $200m and your sell for $100m you don't make any money.

</comment><comment><USER89> Someone should make a tshirt "Liquidation Pref: the most dangerous word"

</comment><comment><USER90> I just love reading this on the day I signed my options package.

<comment><USER91> renegotiate.

"though I've signed my offer I'm having second thoughts about joining"

If they want you, they'll talk.

</comment></comment><comment><USER92> Is there a benefit in asking to get "paid" in both preferred stock and regular stock to spread the risk out? It seems "preferred" stock is really "preferred but with lots of dangerous caveats" stock.

</comment><comment><USER93> Obscene liquidation preferences for investors?

</comment><comment><USER94> blah blah options blah preferred blah series A/B/C blah blah

The real reason they got shafted is that they weren't important enough or they didnt follow what is going on. If you have a $1m asset you shouldn't be hoping its OK when there are so many sharks in the building. Yeah it would be nice if you could trust management and VCs but you can't.

</comment><comment><USER95> Unless your options or equity are publicly traded, chances are you're probably going to get screwed. I much prefer the 37signals approach:

[https://signalvnoise.com/posts/2987-an-alternative-to- employ...](https://signalvnoise.com/posts/2987-an-alternative-to-employee- optionsequity-grants)

</comment><comment><USER96> Welcome to common stock

</comment><comment><USER97> Liquidation Preference.

In very simple terms:

"Liquidation Preference" is an agreement between a company and an investor that when the company is acquired or IPOs, the company will pay the investor some specific amount of money BEFORE any other shareholders get paid. If the company negotiated the funding well, the liquidation preference might be 1x (basically saying the company promises to pay back, in full, the investor's original investment if the company is ever sold)

Things get scary when the liquidation preference creeps up to 2x, 3x, or higher. It's possible to raise $5mm with a 3x liquidation preference... which means that the investor will get $15mm payout BEFORE any other shareholders in the event of an exit (which means that, after raising that $5mm, the company can not have an exit less than $15mm without 100% all the proceeds going to the original investors).

Raising $5mm with a 3x liquidation preference, then selling your company for $15mm, is an easy example of how (even founders) can walk away with $0 after a $15mm sale.

<comment><USER98> It always baffles me when the top comment isn't discussing the article, but provides a response to the headline as if the article doesn't even exist.

<comment><USER99> What's baffling about it? If someone were to only read the title and not the article and came to the comments section, a summary about the title would be desired. What you're probably baffled about is why do people only read the title and not the article.

<comment><USER100> I'm not sure... HN is supposed to be real time discussions of articles. summarizing the article not only is not discussion (read it is regurgitation / bastardization) but any argument / discussion had based on the summary will be inaccurate as they are going off of the words of another, who more than likely integrated logical fallacies that did not exist before the comment.

<comment><USER101> FWIW this happens on reddit too as so many posts have clickbait titles, people are trained to go directly to the comments to find out the non clickbait version.

</comment></comment></comment></comment></comment><comment><USER102> It sounds like an easy way to screw holders of common stock out of their money. Don't they have any protection at all? Like at least, does the agreement for "liquidation preference" have to be reasonable (like, they could go to court and challenge it, and the company would have to prove that it was a necessary deal)?

<comment><USER71> Employees that are paid common stock didn't put any money. They are also paid decent salary. It is like playing a lottery, but only with opportunity cost. Not sure what needs to be protected here.

<comment><USER103> > Employees that are paid common stock didn't put any money.

> It is like playing a lottery, but only with opportunity cost.

So, they did put in money. It's "opportunity cost" money as opposed to literal cash, but logically it's still value being invested in the company (the company has $X more in the bank because the employee was willing to take a $X pay cut).

Compared to VCs, engineers are making a lot _more_ of an investment in terms of % of their potential value for a less favorable return.

I think VCs get better terms because A) they control an amount of capital that's rarer and have more leverage, B) they do this professionally and are better at negotiating things. But probably mostly A?

</comment></comment></comment><comment><USER104> I understood none of those words.

<comment><USER105> That's the point</comment></comment>


Machine learning peoples. Tell me about when you got started - <AUTHOR> Hi everyone. First time posting here. So I'm really into machine learning and all things 'data sciency'. I've got a handful of years working in the public sector doing data analysis/research kind of stuff (nothing like apply ML techniques though). I'm also in grad school part-time in the NYC area, in a non-CS department though the majority of my classes have been CS/Stats related (think ML, algorithms, distributed computing, etc.). My school program is kinda like machine learning for the social sciences. I'm thinking about switching jobs into a company that does more ML kinda of stuff. But when I look at these job posting I see a lot of requirements about pure CS backgrounds, etc. Which is kinda of troubling since I don't have that structured CS training (rather I learn it as I go or when necessary).<p>For the folks who work in a ML role or at a company as such, does this background matter? Do you look for people with really solid training a CS? Also, what was is like when you started after school? Was the work load completely different than what you saw in school? More difficult, less difficult? Thanks in advance. <comment><USER2> It depends on the gig.

When we hire at Spotify, we look for people who are good at Machine Learning. Can code, design systems well. We get people who are at both ends of the spectrum; prefer hiring people somewhere in the middle.

ML at school is very different from ML at work. At work, you have to do a lot of data cleaning; where the C.S. education can help. Furthermore, you need to do be able to think out of the box; pull disparate data sources together. Sometimes even design and pull out specific data.

<comment><USER3> Is there an email address where I can send a resume / cover letter if I'm interested in ML at Spotify? Thanks!

<comment><USER2> Just apply online. The website has a bunch of ML open positions!

<comment><AUTHOR> Hey, a bit late. But thanks for the words!</comment></comment></comment></comment>


Mozilla Persona (BrowserID) is a step in the wrong direction - <AUTHOR> http://www.opine.me/mozilla-persona-browserid-is-a-step-in-the-wrong-direction/

<comment><USER2> Hi Zaroth,

Thank you for the thoughtful post! I'm about to hop on a flight, so this is a bit hasty, but you raise a bunch of good points, and I wanted to thank you for the thoughtful post. I've forwarded this to the Mozilla dev-identity mailing list, and I think it will be helpful as we announce our Beta and polish the service and protocol.

For updates on a few specific points:

> _"Teaching users that it's OK to type their credentials into popups is just > crazy."_

We agree, and are working on adding native support to Firefox so that users only enter their credentials in the browser chrome, and never in page content. We're also working on a project that will authenticate Gmail, Hotmail, and Yahoo users via OpenID or OAuth, eliminating both the Persona password _and_ the verification email.

Native support should land in Firefox 17 (off by default), and the provider bridge should go live in 4-6 weeks.

> _"The only way I could find to actually clear out my cached credentials from > Persona.org was to go back into the Login dialog and click the 'This is not > me' button."_

You can also sign out by going to <https://login.persona.org/> and clicking "sign out," but that's not ideal either. Native support in the browser will make this much better. If I recall correctly, we did some user testing earlier this year and found that no matter which option we went with -- logging out everywhere or just logging out of the site at hand -- a very large percentage of users were confused.

Do you have any alternative ideas for approaching this?

> _"The Login dialog opened as if an email address should have been listed, > but no email was present."_

What sort of connection were you on? If I recall correctly, we've seen similar issues when users are on slow connections / high packet loss connections. I've filed a bug to investigate: <https://github.com/mozilla/browserid/issues/2090>

> _"Validation is complicated enough they don't want sites trying to do it > themselves"_

The data formats are still in flux while we wait for the IETF to finalize some specs, but if you don't mind keeping your validator up to date, you're totally welcome to do local validation. You can either reuse our validator (writtin in NodeJS), or use PyBrowserID which has experimental support for local validation.

This stuff will stabilize in mid-August when we formally anounce a "Beta" release and commit to API stability, etc. We're almost there! For the working group progress, see <http://datatracker.ietf.org/wg/jose/charter/>

> _"even if a domain does advertise support for BrowserID, that doesn't > exclude certificates from being accepted that are generated by > Persona.org."_

We're tracking that in Issue #1501: <https://github.com/mozilla/browserid/issues/1501>

> _"Does BrowserID tell you if the user just recently reset their password? > No."_

Brian Warner has implemented something like this, which invalidates all login.persona.org-backed sessions upon a password change. Pull Request #2026: <https://github.com/mozilla/browserid/pull/2026>

> _"The fact is, when BrowserID says 'okay', you don't have any assurance the > person on the other end even knows the user's password. [...] requiring the > website to abdicate all responsibility to a black box that just says 'okay, > let foo in'"_

I strongly disagree with this characterization -- for the case of users with native IdP support, you're assured that the user agent successfully authenticated with the email provider within a window of time determined _by_ that provider. For users of our fallback, this is _never_ more than 24 hours, and in the case of public computers, is one hour by default.

That's a much stronger claim than you can make with a traditional password- based system, where a sniffed credential can be valid for months.</comment>


Is miio.com the real facebook killer? - <AUTHOR> http://www.miio.com

<comment><USER2> that link doesn't work so well, try this one. <http://miio.com/>

the 'groups' page isn't exactly enticing as there is very little content <http://miio.com/tabs/groups>

So in short, no miio isn't a facebook killer yet. not even close.

Facebook is the facebook killer. I'm convinced that they are smart enough to keep killing off their own initiatives in order to make huge headway in new areas. For example, moving from the 'platform' being inside the walled garden to the entire internet being a part of the platform with single sign-on, and like buttons.

With the way businesses are jumping into facebook fan pages, I think they may just be taking a bite out of twitter, and geo-tagged updates may slow the progress of foursquare, gowalla, etal.

Really? did you think miio was going to kill all that? if so, how?

</comment><comment><AUTHOR> I already signed up and I like what I see. It may not kill facebook (yet) but it will take a huge share from them for sure.

Those who don't like FB will pack and move, and will be making a lot of noise.

<comment><USER2> you are the same person who posted this originally. Are you affiliated with miio?

<comment><AUTHOR> No, I am not affiliated with miio. I saw the article in 'The Next Web' and just reposted here to pulse reactions, since there is a lot of chatter lately about a facebook alternative.

Why the hate now?</comment></comment></comment>


Thorium, the other nuclear fuel - <AUTHOR> http://www.wired.com/magazine/2009/12/ff_new_nukes/all/1

<comment><USER2> FTA: Thorium DOESN'T GENERATE NUCLEAR WEAPONS MATERIAL.

I remember seeing a Ford prototype from the 50's of a car designed to run on nuclear power. With good thorium reactors that could be a real thing. Imagine only having to refill your "tank" once every six months. Also, combine this with UAVs and you could revolutionize shipping.</comment>


PHP 7.3.0 alpha 1 Released - <AUTHOR> http://php.net/archive/2018.php#id2018-06-07-1 <comment><USER2> I recently revisited some of the earliest web code I ever wrote, which was in PHP 5.5 (about 7 years old, I think). I wasn't surprised by all the mistakes I made, both from being a newbie programmer and from making what I think were fairly easy-to-make PHP mistakes. After all, every tutorial I could find back then used mysql, didn't used real_escape_string, etc.

What was surprising was how hard I had to dig _now, 7 years later_ to find out how to do things correctly in PHP 7. Searching for what I thought should be fairly common things to do seemed to bring up all of the old articles that I first mislearned from, and it was really hard to find things like what the best way to iterate over a mysql result set was.

Honestly, after putting my 7 years of experience to practice, the final code didn't look half bad, but I don't think I'll ever end up using PHP since it still appears to be _very easy_ to write bad code. Maybe if a definitive guide for how to write good PHP shows up, I'll give it a shot (or maybe I'll just try Hack).

<comment><USER3> [http://www.phptherightway.com/](http://www.phptherightway.com/) attempts to do just that - can't vouch for its effectiveness, but is a resource that was at least updated for PHP 7...

[https://github.com/codeguy/php-the-right-way](https://github.com/codeguy/php- the-right-way)

<comment><USER4> I always hated the DI fervor in PHP, like it solves all problems. You get such gems from phptherightway as

> We can demonstrate the concept with a simple, yet naive example.

> Here we have a Database class that requires an adapter to speak to the > database.

It tries so hard to be java, which seems backward.

<comment><USER5> I can only agree. I wrote a CMS with Zend Framework 2 which is heavy on DI and tries to be like Spring + Hibernate (Doctrine). Apart from being very hard to understand for new devs in the project, it's also very, very slow.

The way PHP is evolving is definitely towards the Java world and I think it's the worst decision they could make.

Moved to Go 5 years ago, never looking back.

<comment><USER6> Haven't had to use Zend but at least Symfony DI is really heavy to use with all the services.yamls and the javaisms it introduces.

DI can be heavy or it can be something mostly automagical like in Laravel. That's something I've enjoyed quite a bit. Basically it doesn't that much exist until you start needing special cases.

Quite a big part of the PHP community is gravitating towards Laravel and the new steam it introduced with OOB best practices and "let's try hard to avoid the Java-heaviness". Laravel seems to have quite nice balance between easy for new devs and bunch of powerful concepts when needed. Lots of basic problems solved OOB as well.

</comment></comment></comment></comment></comment><comment><USER7>
      - JSON:
      . Added JSON_THROW_ON_ERROR flag. (Andrea)

A blessed day, prior to this, json_decode would simply return null on error.

<comment><USER8> Absolutely, before you had to do some check like:

if(null === $data = json_decode($json)) throw new Exception();

<comment><USER9> Wrong! "null" is a valid JSON-serialized value! You MUST call json_last_error.

Better yet - don't use PHP.

</comment></comment></comment><comment><USER10> _Notable New Stuff in Core_

\- list() Reference Assignment

      https://wiki.php.net/rfc/list_reference_assignment

this allows using list() function for reference assignment instead of just assigning to new variables

\- Flexible Heredoc and Nowdoc Syntaxes

      https://wiki.php.net/rfc/flexible_heredoc_nowdoc_syntaxes

This makes using HEREDOC blocks much more friendly looking for spaces/tab usages in code

 _Other stuff_

Just a lot of updates and bugfixes to many extensions

<comment><USER11> > > [https://wiki.php.net/rfc/flexible_heredoc_nowdoc_syntaxes](https://wiki.php.net/rfc/flexible_heredoc_nowdoc_syntaxes)

Not only does it let you indent the closing marker, but however much you indent it causes that much white space to be trimmed from the enclosed text. Heredocs are now perfect.

</comment></comment><comment><USER12> _Removed support for BeOS_

It's amazing a lot of software still support some very old stuff :)

<comment><USER13> Have to make room for Haiku :)

</comment></comment><comment><USER14> Maybe I should take this as an opportunity to write a new app in PHP. I've been too deep into Go for awhile to have any sense for where PHP's at these days.

<comment><USER15> If you want to be cool, write Go. If you want to make money, write PHP.

<comment><USER16> Are you implying PHP devs are earning more than Go devs?

<comment><USER17> I don't speak for the parent (and I don't think the assertion is correct), but I will say that PHP jobs outside the valley are plentiful. A large percentage of those are legacy maintenance or development on unpleasant platforms such as WordPress or Magento, but there is still a lot of challenging and enjoyable work being done using PHP, and the improvements to the language over the last few years have made many of the old arguments against the language obsolete.

<comment><USER16> I'm asking about salary ranges specifically.

<comment><USER18> I know some php devs from munich in germany which started at 64k per year. Others earn 70k+ per year. In agencies (wordpress i.e.) jobs start at 48k.

<comment><USER19> Tbf, 70k€ in Munich is like 50k€ nearly anywhere else in Germany.

</comment></comment></comment></comment></comment></comment></comment><comment><USER20> what does it break from 7.2?

I love how every php upgrades requires me to find mysqli-type crap that breaks all my customers' code.

<comment><USER21> Seems to be mostly fixes and incremental improvements. Here's the only breaking changes I see in NEWS:

. Removed support for BeOS. (Kalle)

. Removed support for ODBCRouter. (Kalle)

. Removed support for Birdstep. (Kalle)

So, if your customers are still using BeBoxes, you might have a problem.

</comment></comment><comment><USER22> Did PHP ever change the misfeature that there is no warning when you reference an uninitialized variable?

<comment><USER23> If my memory is correct (might not be) you get a Notice since PHP5. So around 13 years ago.

</comment></comment><comment><USER24> What's new in this release? I couldn't figure it out by looking at the page.

<comment><USER25> Check out [https://github.com/php/php- src/blob/php-7.3.0alpha1/NEWS](https://github.com/php/php- src/blob/php-7.3.0alpha1/NEWS)

<comment><USER26> One thing that stuck out to me was flexible heredoc changes: [https://wiki.php.net/rfc/flexible_heredoc_nowdoc_syntaxes](https://wiki.php.net/rfc/flexible_heredoc_nowdoc_syntaxes)</comment></comment></comment>


Ask HN: Does Dropbox Paper encrypt docs "at rest" on servers? - <AUTHOR> Does Dropbox Paper encrypt docs "at rest" on servers? <comment><USER2> Yes. Paper data at rest is encrypted using 256 bit AES.</comment>


Ask HN:Feedback on my android app for toddlers - <AUTHOR>

I published my first android app for toddlers/preschoolers today, If you have toddlers/preschoolers please install the app and let me know your feedback
It is plain HTML5/Javascript wrapped in android webview. I have used javascript frameworks jquery mobile and Monocle to develop this
https://market.android.com/details?id=in.microangels
Thanks. <comment><AUTHOR> clickable link <https://market.android.com/details?id=in.microangels></comment>


Hootsuite lays off 10% of its employees - <AUTHOR> https://bc.ctvnews.ca/mobile/it-s-not-a-surprise-vancouver-based-hootsuite-lays-off-dozens-of-employees-1.4401807 <comment><USER2> A worthy product, but it is hard for me to understand what they would do it for more than a few employees… Or is there something I'm missing?</comment>


Should you buy BitCoin today? - <AUTHOR> Bitcoin has reached a new all-time high today, with prices hitting a record $5,161.<p>In your personal opinion, does it still make sense to buy BTC today, and why? <comment><USER2> If you do not own any bitcoin, get some today. If you already do own and want more, buy the dip. A dip is when China bans bitcoin again :D

</comment><comment><USER3> You don't buy BTC, you just hodl.</comment>


A quick look at productivity enhancements in Visual Studio 2017 RC - <AUTHOR> https://web.archive.org/web/20161114095838/https://msdn.microsoft.com/magazine/mt790181 <comment><AUTHOR> Linked to archive as it was taken down, probably was meant to release at Connect() next week

</comment><comment><USER2> I hope this means they are going to stop calling the pre-release version Visual Studio '15 now. It's been entirely too confusing when the current release version is Visual Studio 2015.</comment>


Moving Past Brogramming - <AUTHOR> http://corp.klout.com/blog/2013/01/moving-past-brogramming/ <comment><USER2> "Punch Mediocrity in the Face"

There's still some aggression here.

<comment><USER3> As a non-violent person, I feel dismissed and alienated by violent engineers.

</comment></comment><comment><USER3> So it's three years later and people are still getting back to this "Bla bla brogramming is bad"? I thought that cargo was long gone.

I just don't understand the point of this article. Brogramming was a fad, it made some people feel like part of a "crew", it upset way more and it was quickly buried away. So what's the point of bringing it back today only for the sake of the Klout team telling us it took them THREE YEARS to "move past brogramming"?

</comment><comment><USER4> It should be pointed out that the Twitter account "Only Girl in Tech" brought this up again a few days ago.

Which is actually detrimental to the (extremely important) cause that (tongue- in-cheek) Twitter account is supposed to serve. No facts were checked and we end up with a situation where failing AT SOME POINT means you'll be blamed for life. No forgiveness, no progress.

</comment><comment><USER5> (i love this thread)

Brogramming's lasting meaning? Being Goofus in production: pushing code live from your laptop with no commits, no warnings, whatever, mostly in situations that feel like this: <http://youtu.be/O_HyZ5aW76c?t=1m>

</comment><comment><USER6> Wait, Klout's nickname for its employees is "Kloutlaws"?

<comment><USER7> When you're clinging desperately to the bleeding edge of social innovation, you can't allow yourself to be confined within the mundane strictures of the English language.</comment></comment>


RCMP denied using facial recognition technology, then said it had been using it - <AUTHOR> https://www.cbc.ca/news/politics/clearview-ai-rcmp-facial-recognition-1.5482266 <comment><USER2> The Calgary Police uses Peter Thiel's data-mining company Palantir. At political events such as protests, town halls, meet and greets, you can see members of the Calgary police walking through parking lots near by and taking pictures of license plates. With the license plate numbers, they can identify someone's name and use it to find out current address, family relationships, bank accounts, and more if it is in their database.

Read more: [https://www.cbc.ca/news/technology/palantir-silicon- valley-t...](https://www.cbc.ca/news/technology/palantir-silicon-valley- technology-giant-data-canada-1.4111163) [https://www.vice.com/en_us/article/9kx4z8/revealed-this- is-p...](https://www.vice.com/en_us/article/9kx4z8/revealed-this-is-palantirs- top-secret-user-manual-for-cops)

</comment><comment><USER3> Is anyone surprised by this? Anyone who believes a government can _have_ a tool and limit itself from _using_ it is naive beyond understanding. Paper documents, lawsuits, and international agreements are all incapable of restraining government. It is completely amoral, and its survival depends on power and control; the only thing that can restrain government from an action is the fear of a backlash that will cause it to lose more power than that action would provide. I don't know how it is in Canada, but in the USA, the people are not inclined to outrage, no matter what the government does.

<comment><USER4> I agree fear of losing power is the only thing that restrains government. But disagree with:

> I don't know how it is in Canada, but in the USA, the people are not > inclined to outrage, no matter what the government does.

That's not entirely true though -- currently in the USA republicans are so scared of standing up to some of Trumps wilder ideas because they will get voted out.

Similarly, when Virginia's government discussed imposing new gun legislation, 22,000 people marched (with guns) through Richmond:

[https://www.npr.org/2020/01/20/797895183/richmond-gun- rally-...](https://www.npr.org/2020/01/20/797895183/richmond-gun-rally- thousands-of-gun-owners-converge-on-virginia-capitol-on-mlk-d)

They might not always care enough to protest in such a manner, but they do, fairly regularly.

<comment><USER3> That's a point; there is a tendency to some protest. But that wasn't really what I meant. I mean that, to control a government, they must fear that the people will remove them in the time-honored fashion.

</comment></comment></comment><comment><USER5> Apparently lying about something and then admitted it (with no consequences) is a popular theme these days.

<comment><USER6> Gaslighting appears to be a nasty and old habit of governments back to "liberating" the local Christians in the crusade and then both raiding their countryside for crops and then not sparing them from the massacres and looting.

</comment></comment><comment><USER7> In my Canadian province we were all issued new enhanced driver's licenses. It was only recently discovered that each person's image was entered into a police database. No permission was given no indication it was being done.

<comment><USER8> Wasn't the assumption that, by getting a driver's license, you were entering your image into at the very least a government database? I kind of assumed that those pictures, and all the licence data attached, would be open to the police for use in traffic stops.

<comment><USER7> I believe they were used for other purposes like someone robbed a bank so your photo is checked to see if you were the robber.

It's only supposed to be used for driving not for anything else.

</comment></comment></comment><comment><USER9> All Canadian passports are biometric anyhow (someone correct me if this is mistaken) and upon entry into the country in many places, you scan your face for a camera anyhow before even seeing the customs people. Seeing as how both Canada Border Services Agency (CBSA) and the RCMP are federal agencies, they already have theoretical access to everyone's face data. That's the real sad state of affairs: they don't even need to this stuff secretly when they make it obligatory in some other way with not one single protest.

</comment><comment><USER10> The future is grim.</comment>


Python Help - <AUTHOR>

I need to finish this program by tomorrow and I've spent DAYS trying to understand it, and the instructor isn't particularly helpful. I understand the things like sockets and threads but I don't know how to put these together to make such a program. I've gotten some progress but I don't even know if it's right.
Please help me out, I don't know who else to turn to!
here is the program description:
http://www.cs.utexas.edu/users/julian/index.php?page=Networked%20Connect4
it's pretty vague too :( <comment><USER2> HN is probably not the right place to ask for help.

When you do ask for help, it's always best to explain what you have figured out and what still confuses you. Explain how you think the program ought to work. Pointing us to a programming class assignment page is not an effective way to help you figure things out. Trying to figure it out on your own and asking specific questions will be much more effective.

You might find it useful to begin by writing the various modules of the assignment in outline form with some documentation of interfaces and functionality. Writing a coherent description of what's needed can be very helpful.

Be sure that you understand about how clients and servers work. Take a look at the python library, which has a number of different servers, for examples.

</comment><comment><USER3> No offense. But what YOU are looking for is pretty vague. To me, this looks like you're looking for someone to do your homework. What were you doing for the other 2-weeks allocated to this project?

"You get one week to do each of projects 1, 2, and 4, but you get 2 weeks to do each of projects 3 and 5 as they represent more work and are worth double credit."

If you're looking for _assistance_ in understanding core concepts, I would recommend:

Stackoverflow -- for VERY specific questions OR #python on irc.freenode.net

<comment><AUTHOR> This is an intro to Python course and he's making us do all these complex progrms when we're still python noobs

the prof is also very vague with his instruction

</comment></comment><comment><USER4> "This is an intro to Python course and he's making us do all these complex progrms when we're still python noobs"

I suppose you would need to learn everything between 0 and completion in order to produce the products he is demanding of you.

Perhaps there's a point to all this learning...

</comment><comment><USER5> This isn't really the place for this. Try stackoverflow.com, or one of their Python sites. (python.stackexchange.com, if it exists)

<comment><AUTHOR> thanks, i will!

</comment></comment><comment><USER6> Wouldn't this be better on Stack Exchange?

Also, there's a dive into python mirrored somewhere. try .ep.io</comment>


Trump Defends ZTE Concession After Sparking Bipartisan Rebuke - <AUTHOR> https://www.bloomberg.com/news/articles/2018-05-14/trump-s-reversal-on-china-s-zte-penalty-sparks-bipartisan-rebuke <comment><USER2> How is this not pure corruption? How is it legal?

Do we live in a banana republic?

<comment><USER3> Forcing a company that employees 75,000 people in China out of business doesn't seem like the right outcome. I would expect the U.S. and China to negotiate some sort of more appropriate remedy that is better for all sides.

<comment><USER4> No the company made itself go out of business. First they violated export restrictions, then after apologizing and paying a fine it turned out they had explicit intent to continue violating export restrictions.

In response they were told they could no longer purchase American technology. Then they chose to go out of business.

They chose to go out of business. No one required that they break the law, and if they hadn't they would be fine. The alternative is that companies can break the law however much they want if they're large enough.

<comment><USER3> There are plenty of alternatives. I'm not suggesting the U.S. let ZTE wantonly violate sanctions or that a mere fine is enough to fix things. But there's surely some middle ground. Imagine if the top leadership of Apple had done something similar and sold a few prohibited items to Iran. Why destroy the entirety of Apple over that, most of which is a benign electronics business that employs massive amounts of people? Alternatives could include firing or arresting all of the top leadership, putting in place strong enforcement mechanics to ensure it never happens again (with the assistance and assurance of the State), trades for other things that are desirable for us, etc.

Perhaps the alternatives that the Trump administration will propose are weak and will be a terrible bargain, but that's a different matter than saying we shouldn't even consider alternatives.

<comment><USER4> The problem was that the fine was not sufficient. Then ban on using American component cam about because it was discovered the ZTE planned to continue selling despite explicitly stating that they wouldn't, and having already been fined.

The ban that killed ZTE was not a result of them breaking the law. That merely resulted in a fine. The ban came about as a result of ZTE deliberately planning to continue breaking the law after already being caught, charged, fined, and explicitly agreeing to stop. Give. Than background what should have been done?

</comment></comment></comment></comment></comment><comment><USER5> It was the huffington post which first pointed out the timing of Trump's ZTE concessions relative to a Trump Organization-affiliated project the Chinese government agreed to finance.

Financing article: [http://www.scmp.com/news/asia/southeast- asia/article/2145808...](http://www.scmp.com/news/asia/southeast- asia/article/2145808/trump-indonesia-project-latest-stop-chinas-belt-and-road)

HuffPo correlation story: [https://www.huffingtonpost.com/entry/trump-china- zte_us_5af9...](https://www.huffingtonpost.com/entry/trump-china- zte_us_5af9f701e4b0200bcab7fa66)

This is not to say that the two are necessarily connected so much as it's to say that not _investigating_ the timing of the two is to exhibit a lack of due diligence.

<comment><USER6> > This is not to say that the two are necessarily connected so much as it's to > say that not investigating the timing of the two is to exhibit a lack of due > diligence.

They don't even have to be connected with any explicit quid pro quo between the parties. It could all be implicit from the Chinese government knowing full well who the owner of the Trump Organization is.

Trump had a recourse, he could have easily put his assets in a blind trust. Instead, he should suffer the consequences.

<comment><USER7> Further, when it comes to other high offices, like judges, the _appearance_ of conflicts are as problematic as actual conflicts. Such that care beyond standard conflict checks is required to prevent having to investigate every relationship and decision.

<comment><USER8> I've always found this deeply disturbing. By not putting his assets into a blind trust, Donald Trump made it easy for foreign governments to create the appearance of impropriety. This suggests that he may not fully grasp how dangerous it is to give someone the power to blackmail you.

Anyone in public service _should_ understand this, though clearly Trump isn't alone on this one.

<comment><USER9> Oh he did this on purpose. He clearly wants the money.

<comment><USER8> Yes, but the money can't possibly be worth the punishment normally associated with what he's done. My net worth is dramatically lower than what Trump claims to be worth, and _I_ wouldn't take anywhere near this much risk just to make money.

Mind you, I dabble in day trading. I do stupid, risky things to make money with far more of my money than is probably wise (I lost $4k yesterday, which sadly, wasn't that bad compared to some of my previous losses). So clearly my sense of risk/reward is a little off kilter.

That said, I'd never do something blatantly illegal (possibly unconstitutional!) in order to make money! Especially not if it represented 1/20th of my self-reported net worth! That would be a positively stupid amount of risk for such a small reward.

</comment></comment></comment></comment></comment></comment><comment><USER10> Trade negotiations are underway. This is a part of that, as was the initial ban. Trump does this again and again: he creates leverage in the form of negative consequences should he walk away from the table. Then he gives some of it back much to the relief of the other side, in exchange for something else he needs. He negotiated thousands of deals, some of which were very complicated. It could well be that he's the strongest negotiator we ever had in that position.

<comment><USER11> >It could well be that he's the strongest negotiator we ever had in that position.

So strong that he can't negotiate deals beneficial enough for him that he can afford to hold up his end of them, and instead files for bankruptcy so that he doesn't have to pay for it. He's taken such good care of all of the hard working US citizens he's interacted with in his days as a business man.

<comment><USER10> And yet he still has 4 billion dollars and is a president of the US. Must be pretty good at negotiating.

<comment><USER12> That's like saying Pablo Escobar was good at business because he amassed billions of dollars.

<comment><USER13> Except Pablo Escobar was actually a very good businessman.

<comment><USER11> And actually had a net worth in the billions.

Two traits Trump does not share with Escobar.</comment></comment></comment></comment></comment></comment>


What if you never had to worry about rent, food? Y-combinator Basic Income - <AUTHOR> http://money.cnn.com/2016/01/27/technology/y-combinator-basic-income-research/ <comment><USER2> I'll do one better give me a basic income + occasional advice and I will work on my startup for 5 years. Need at least $6k/mo. and you can have up to 5%-25% of the company I create based on how many years until its paying me a salary.</comment>


Google leans on developers to use Google Wallet - <AUTHOR> http://www.reuters.com/article/2012/03/08/us-google-idUSBRE8271CJ20120308 <comment><USER2> One more in an increasingly long line of hypocritical actions.</comment>


Drobo Finally Announces NAS Drive - <AUTHOR> http://www.trustedreviews.com/storage/news/2010/04/07/Drobo-Finally-Announces-NAS-Drive/p1

<comment><USER2> I really have a hard time trusting these kind of devices and would rather stick with a real system using real RAID or ZFS.

I had a ReadyNAS a few years ago and liked it, up until the power supply died. Suddenly I couldn't access any documents and needed to order a new power supply and wait for it come.

It may be convenient, but the parts aren't easily swappable. I can't pull out the controller and rives and plug it into something else. If it was just a normal system, I have plenty of spare parts laying around or can easily drive to Fry's and get almost any part there.

Instead I found how to modify an ATX power supply to work for it, powered it up long enough to copy all my data off, then ditched it.

</comment><comment><USER3> I have a strong dislike for Drobo's.

They might be good consumer devices, but I inherited a company using them in the place of a proper RAID (which we are now yanking out and replacing with Promises).

Biggest problem is how slow they are. The next big problem is that once at a certain capacity, terabytes of space mysteriously disappear.

</comment><comment><USER4> Meh.

Who's going to pay the Drobo premium when equivalent or better performance can be had, with more a bog-standard (e.g. reliable) hardware and filesystems, for less?

I guess those customers who care about the visual aesthetics of their NAS device.

<comment><USER5> You're ignoring the real benefit of Drobo: mixing heterogeneous drives. Unfortunately, the cost of that feature is now really high, since it seems like regular RAID has gotten faster and cheaper while Drobo has stayed expensive and slow.

<comment><USER4> Exactly. Despite reliability and batch/lot issues with drives of vastly different SMART error rates and ages, the KEY Drobo feature appealing to the "lower end" of the RAID prosumer space WAS heterogeneous drives.

In the current market, Drobo has managed to price themselves OUT of that space while simultaneously NOT keeping up with performance on the higher end.

Drobo is now in the uncanny-valley of proprietary RAID systems.</comment></comment></comment>