Ask HN: Pros and cons of working at a startup in 2018? - <AUTHOR> I'm Jared, one of the partners at YC. When I joined YC, one of the things that I most wanted to do was to help make hiring and getting hired suck less. I have a business reason and a personal reason for this. The business reason is that YC's job is to help the startups we fund, and helping with hiring is one of the biggest things we can do. The personal reason is that before I joined YC, I did a lot of hiring for my startup, Scribd, and for me it was the most rewarding part of starting a company. Some of the people who joined us had life-changing experiences - they moved across the world, jump-started a new career,
grew with the company and became leaders, or used their experience
to start their own successful companies. I wanted to help more people
have those experiences and not feel stuck in jobs where they don't
have much impact.
So, a few of us at YC have been building Work at a Startup (https://www.workatastartup.com/), with the goal of making it easier for startups to hire, and engineers to get hired, at a YC company. We started with the same insight that everyone else has: the hiring process is broken and inefficient, and decided to look for ways we could make it
better for everyone, at least within the YC ecosystem. For example, we could get rid of the burden for applicants of having to send a resume and cover letter to every company by creating a simple way to apply to all YC companies at once.
While working on this, though, and talking to engineers and HN users about it, I realized that there's a more fundamental question: why should people want to work (or not!) at a startup in the first place? This question has a history and has gone through several phases. In the early heyday of YC and HN and pg essays there was a ton of enthusiasm about startups, the freedom and creativity and opportunity they offer. In more recent years, when I read HN threads (like https://news.ycombinator.com/item?id=15916350, to pick one close to home), it's common to see people arguing that, for early employees, joining a startup isn't such a good idea. And frankly, some of their points are good ones. There are issues that need to be fixed. One of the big things that YC did in the early days was move the needle in favor of founders. That was an adjustment that badly needed to happen, and it did happen. I think the next phase is to move the needle in favor of early employees. Just how to do this is one question I'm hoping we can discuss in this thread.
So, HN: what are the pros and cons of joining a startup in 2018, particularly as an early employee? And where there are cons, what would fix them? If there are concrete ways we can find to shift the balance, YC is interested in doing that. <comment><USER8> I was the first engineer at a TechStars startup that did have a successful exit (I was there about 5 years before the exit). If there is something I want YC to know, it's this:

You helped create the culture of founder empowerment. You have the power to evolve that narrative to those that sacrifice as early employees.

Tell the world that early employees deserve _a lot_ more equity.

Tell the world that early employees contribute to the success of those companies and deserve to have that help their careers.

Because here's what I see are the pros/cons...

Pros:

* I was forced to learn with no one else to help me. Not sure I'd be as good of an engineer without that.

* I got exposure to a lot of things I wouldn't normally be able to control, which propelled my career going forward.

* I built the seed to make connections with people in the startup community which I still leverage today for my own consulting business.

Cons:

* I was paid terribly, and this was 8 years ago, so it was even worse than now.

* Even with the exit, I basically made enough money to recoup the money I should have been making at a bigger company, so it's net neutral.

* No one cares about that as a success for me. I'm surprised no one has brought this up. I was the 1st engineer for a company that had a successful exit for TechStars. _Zero_ recruiters, companies, etc, have ever even asked about that company or my connection to it other than the fact they are reading it down on my resume (and when they do see it, they barely take note of it).

And for the record - I have no beef with the founders. But the culture around how to pay and credit early employees is institutional and was not their fault. They walked off with huge payouts and credit for their success, and I walked away with a catch-up check for missed EV and no one cares that I played an instrumental role in getting them where they are today.

But YC has the power to change that. I reiterate from above: you have the power to tell the greater startup community through your words and your actions that startups should provide better equity to early employees and make it so that the success of a company is shared far greater than that of just the founders.

<comment><USER9> Maybe engineers are more replaceable than founders? That would explain why founders walk away with a lot more cash and credit. After all, there are a lot of good engineers who probably would do a good job as an early employee. And relatively few people who have the vision, motivation, and skill to create a successful company.

That said, I sometimes feel that being a successful founder has less to do with skill and more with being at the right place at the right time.

Would be interested to see what others think.

<comment><USER10> As an engineer of middling competence (I don't do poorly, but there are people smarter than me), I think you're wrong. The reason engineers receive less than they're worth by and large is because A. they cannot negotiate very well and B. they do not know their own worth. If you combine these two with some idealism, which is the only real reason you'd work for a startup (high-risk, low-reward work - if it's not for ideals you have no reason to do it), you get a prime exploitative opportunity for any employer.

<comment><USER9> Suppose getting a good engineer would contribute $2 million / year profit to a company. That company would offer a higher salary than the going market rate, and thus steal engineers from competing employers (in fact, that's exactly what FB, Google, LinkedIn, etc. do: you can ask them to match or beat the other company's offer). Since regardless of how badly engineers negotiate, they would still be attracted by a higher offer. Then other companies would also offer higher salaries, to avoid missing out in hiring. This cycle won't stop until compensation gets to a good fraction of that $2m/year; say, $500-800k/year or so, leaving room for overhead (office rental, benefits, etc.) and profits. The fact that it doesn't happen tells me that me that most engineers probably aren't worth $2m/year to companies.

I do agree with your last point: engineers are often idealists and/or they have very strong preferences about what they want / don't want to work on. So they may often be willing to give up much better comp in order to satisfy such preferences. That's why startups get away with paying maybe half of what large corporations pay. Still that's not nearly enough to explain the gap between engineer and executive compensation.

</comment></comment></comment></comment><comment><USER11> This is such a great area to work on.

The equity side is pretty rough. Founders are very sensitive about disclosing important information about company performance. They are sensitive about disclosing the cap table. Some will share info with investors that they don't share with employees. And they are sometimes trying to pitch optimistically and leaving out items that don't fit the narrative. So you end up with a very vague sense of where the company actually is when you are interviewing. A much better stance is "awesome opportunity, and these are our problems, come help us fix them". Standardization on more disclosure would push hiring toward a higher local maximum.

Something like Geoff's [https://blog.ycombinator.com/transparency-in-startup- investi...](https://blog.ycombinator.com/transparency-in-startup-investing/) for hiring companies. For workatastartup.com, you could say "if we make an offer, we'll show you this critical info". It's probably a bit much to expect companies to disclose this in public job postings.

Sam's thoughts on equity at [https://blog.samaltman.com/employee- equity](https://blog.samaltman.com/employee-equity) are spot on. Especially the 10 year exercise period.

Scenario one. You leave a company after 5 years. You think they will be successful but best case is 5 years before liquidity and 10 years is very possible. It will take most of your savings to buy the stock and pay taxes. You helped with the $20 million to $800 million valuation growth. Now you have no savings, and the money is still at risk because $800 million dollar startups die all the time. You get to bet all your savings that a die rolls 1-2 for 10 times your savings. Roll 3-6 and you lose it all. The expected value is great, but it's a pretty hard bet to take.

Scenario two. Your coworkers realize this and hang on at the company long after they want to move on. Now 20% of your team is just showing up and the company culture is dying. Everyone worries about retention, we should worry about over retention too. It's better for the golden handcuffs be "if I stay, I'll vest these options" rather than "I must stay to preserve the options I vested 4 years ago".

These and 10 other bad scenarios like them are definitely on the con side.

And so easily fixed!

<comment><USER12> > $800 million dollar startups die all the time

is this the case? i actually don't know that it is.

<comment><USER13> (Sample size of one)

I worked at a unicorn startup five years ago in the bay which no longer exists. Anyone who bought the options -- and the company was very cagey on providing cap table info -- was left with nothing.

<comment><USER14> Worthless, or nearly worthless, options are very, very common. The last options I exercised and did get paid out... but in the end, I didn't even make back enough to make up for the pay cut I took. Financially, I would've been better off taking a different job. At least I "had fun' and "got something" though.

<comment><USER15> Why the quotes? Did you not have any fun?

<comment><USER14> The quotes are there because it's basically a cliche. Every startup is "fun", right? Okay, I did actually have fun... at least for the first year or so.

</comment></comment></comment></comment></comment></comment><comment><USER16> I echo the comp aspect. I pretty much had a best case non-unicorn startup exit; wonderful benefits pre-acquisition, actual unlimited PTO, and normal ~40hr/workweek, acquired almost immediately after receiving my shares, golden handcuffs after. My total comp was more or less equivalent to my peers doing the big 4 grind over the same time period. They had zero risk and I had to win the start up lotto.

But if I had to do it all over again, I still might do the startup route. It's just more fun. There's more to life than money.

<comment><USER17> I think a huge part of whether it is more fun or not is about where you are in life. Startup life was great for me when I was young and single, and enjoyed the startup lifestyle of excitement and risk. Now that I am older and have a wife and kid, I really like the stability, predictability, and salary of a job with a bigger company.

<comment><USER18> Also _who_ you are in life.

When I was younger I didn't have chances. It's incredibly privileged to be able to take a position somewhere you might not have a job in 2 months because you have enough stashed away or enough family wealth that if you fail, you can pick yourself back up easily.

<comment><USER17> Yeah, I wasn't trying to imply it is just about stage of your life in terms of age and family status, but more just your stage of your life in terms of financial needs and tolerance for risk. For some people that need for lower risk and financial stability comes when they are older, and for some people they start out needing that financial stability at a young age.

</comment></comment></comment></comment><comment><USER19> Having not worked in the Valley or a startup, I can say the biggest con to me is a lack of stability. You can get a job at BigCo or even MediumSizedButBeenAroundTwoDecadesCo and be reasonably sure you'll still have a job... as long as you want to work there. But with a startup, either they run out of money and you lose your job, they pivot and don't need you and you lose your job, or they get acquired and you very likely lose your job (or it becomes a vastly different job you didn't want). When taken in combination with the insane cost of living in the Bay Area, it seems crazy that someone would even consider this.

Here's a crazy idea from the IT contracting industry: Maybe YC and the like should hire employees and contract them out to startups. I work for a company which contracts me out to another: Even if my position is eliminated with the client, I don't lose my job, I just get reassigned. Perhaps as part of this, YC (or other funding group) gets the investment options an employee would otherwise have had, for example.

\- For the startup, they'd be getting employees who weren't worried if they'd have a paycheck in the next six months, and they'd know their VC folks are confident in that employee's ability. For all the other risks startups take, hiring a good developer/designer/business manager would be less of one.

\- For the employees, they'd have a stable income they could base real estate and financial decisions on.

\- For the fund, they'd have possibly gained more investment, and ideally, having known employees that they've seen the work of before should add confidence to the success of a given business they've funded.

Disclaimer: I have literally no experience or expertise in claiming this would work out financially or otherwise for the startup industry.

<comment><AUTHOR> This is an interesting idea. We've talked about ways that we could help create more job stability for people joining a YC company.

<comment><USER20> When I was a consultant, I liked two things about my company. I was paid by the hour, which kept my company honest.

I was paid when I was "on the beach"(bench), but I was expected to train and get tech certifications

<comment><USER19> Interestingly, I strongly prefer not being paid by the hour.

I find time-clocking incredibly irritating, as I may be inspired to a solution or want to fix something outside of hours, which is pretty common for me. And similarly, I don't want to feel bad about if I am doing something wrong or not the most efficiently, but still charging full price for that time. Possibly the most irritating thing for me in times I was on hourly was arriving at work a few minutes too early to clock in and having to twiddle my thumbs, or having to determine whether or not something I wanted to remote in and do met the official terms for being paid in after hours time.

My personal feeling leans towards paying for "a job well done", and leaving it on the idea that if you're doing your job well, I'd like to believe nobody will question how you spent the hours you were doing it.

Being paid while on the bench makes a lot of sense if they feel you're valuable enough to retain, and time to actually spend training is pretty nice when you can fit it in, and obviously works to their benefit.

<comment><USER20> I didn't have to clock in I just needed to enter my billable hours.

</comment></comment></comment></comment></comment><comment><USER21> In terms of _how_ to move the needle for early employees, at my prior (and first) startup, I watched us go from 15-20 employees to >300.

One of the interesting things that struck me was how much advisement/mentor/training/etc investment went into the founders/C-team, and how little went into all the rest of us.

(Totally reasonable that this was a situational thing, but I don't think it is).

There's fame and reputation that comes from being a founder, and there's not much of that that goes into the EEs. For example, at my current startup, one of my founders wanted to sub me in for them at a panel they had a conflict with, but the guy running the panel "didn't want individual contributors".

Being a founder is celebrated; being an EE isn't: [https://strongfemaleprotagonist.com/issue-5/page-63-2/](https://strongfemaleprotagonist.com/issue-5/page-63-2/) [https://strongfemaleprotagonist.com/issue-5/page-63-3/](https://strongfemaleprotagonist.com/issue-5/page-63-3/)

Note: I'm not talking about how employment is celebrated _within_ any given startup - that's important, but it's going to be situational - I'm talking about the community as a whole celebrates the EEs.

<comment><USER22> _> the guy running the panel "didn't want individual contributors"._

That may be a reasonable requirement, depending on the panel topic.

But note: Plenty of EEs aren't individual contributors! An EE can be a "team lead" for example. Basically if you have any responsibility for directing or managing other people, you are already not an IC.

<comment><USER21> > That may be a reasonable requirement, depending on the panel topic.

Hmm. I really don't see how. That's a bit like saying that because you work in Java, you can't talk about Ruby, or AWS, or Scrum, or skydiving. This really seems like the sort of thing that you "opt in" rather than "opt out" \- you're qualified to talk on a panel if you are X, rather than being disqualified if you are Y.

Can you think of any topics where that WOULD be a reasonable requirement? I cannot, but I'm biased.

<comment><USER22> Also, X and Y in this case are (mostly) mutually exclusive. We just don't have a common catchall term for technical non-ICs to be able to express a positive requirement without also including non-technical managers.

<comment><USER21> I can't identify the case you're talking about.

Seems like the problem is trying to have a category (as in folder, as in old school email) rather than a label.

"Technically capable", "contributor", and "technical contributor" all sound like ways to positively express "not looking for non-technical managers".

The problem comes back around to "do not restrict people to the categories you assign to them".

(Which is also a way to phrase many social justice issues and IMO where "being a cog in a machine" comes from).

</comment></comment></comment></comment></comment><comment><USER23> As a two time early employee starting right out of college, I can think of these points:

Pro: I've seen and learned things I wouldn't have in a big tech company. The rapid growth and constant fight for survival means I've picked up skills my big company peers didn't even have access to, especially leadership skills.

Con: In hindsight, the equity was a joke for the pay cut I took. If I had fully appreciated all of the gotchas of startup stock options, I would not have taken the pay cut relative to what I could have gotten from the big company offers that I had. Chief recommendation there: no 90-day exercise window, and employees should have ongoing access to details like liquidation preferences, revenue, burn rate, etc. I appreciate the need for confidentiality for strategic reasons, but I no longer believe that this need outweighs the principle that employees should know what they're signing up for.

The big issue is that there is not remotely enough institutional/cultural wisdom around what it means to be an early employee, so it feels like startups are often exploiting early employee naivete.

</comment><comment><USER24> Pro (from my personal perspective, YMMV): You get to work on something that will actually see the light of day. For me, there's nothing worse than being this tiny little cog in the machine that comes into work from 9-5 and produces something so microscopic that you question your importance at all. Working at a startup means you have to pull your weight, wear many hats, and get shit done. This also means you can climb the later and get noticed much easier. It also means you can't slack off and fuck around all day. Most of my friends that work at larger public tech companies — it just feels like they're constantly doing unimportant things, going to conferences just for the sake of it, getting into work late and leaving early. etc. That life, that cushiness is just not for me.

Cons: As others have said, the pay is always going to be lower. The stock options are, in most cases, always going to be worth $0.

<comment><USER25> > they're constantly doing unimportant things, going to conferences just for > the sake of it, getting into work late and leaving early. etc.

uuuh, do you have any links I can follow to apply for a job like that?

<comment><USER26> [https://careers.google.com/](https://careers.google.com/)

</comment></comment></comment><comment><USER27> Here's what I consider the 'sweet spot':

A small company, say 20-50 people or thereabouts, that has a profitable niche and does not require much in the way of investments. Here's why:

* Small is more fun for me - I like knowing everyone I work with, and the chance to see what other people are working on, and maybe move around some in what I'm doing, rather than 'the same thing day in and day out at BigCo'. Your work also feels more valuable and meaningful. Startups are a lot of fun that way, however...

* Investments and not living off what you sell are inherently unstable and stressful. That's ok to take a chance on when you're younger, but as someone with 20 years of experience in the industry, a family, hobbies, an interest in local politics and so on, it's not so much fun any more.

* I have a bias for cash, not equity. It's fine to roll the dice a bit on that when you're younger, and even now for the right thing... you never know, but ceteris paribus, I'd rather just have the money.

Of course actually finding a place like that is easier said than done. You need to avoid things like winner take all markets.

<comment><USER28> > You need to avoid things like winner take all markets.

i love this idea.

yet, it seems like the whole point of startups nowadays is to become the winner in the winner-take-all market. and VCs seem to be looking for that kind of play mainly. and markets become winner-take-all with alarming frequency.

so, it's like, how do we get to the kind of market with room for multiple long-term, profitable players?

<comment><USER29> That's basically the thesis of Zero To One, and yet it's responsible for burning how much Venture Capital?

One of the interesting things is how companies like CB Insights seem to have built quite successful mid-sized startups with very little funding (CB Insights are at $11.7m in funding), or Atlassian who didn't raise until they were pretty close to IPO. Compared to Uber at the opposite end - how much capital has been squandered on making very marginal gains in the name of growing market share?

It'd be an interesting research project to compare outcomes against funding raised, over say a 10-15 year period.

</comment></comment></comment><comment><USER30> Open plan offices and general lack of a quiet, contemplative, professional working environment is the hugest con to me, even huger than the compensation issues pointed out by other commentors.

I would look to start-ups to be _leading_ the effort to improve industry practices for software development ergonomy and human-centric working spaces (i.e. focus on privacy, quiet and individual customizability).

But instead, start-ups often try to conflate "collaborative spirit" with some shallow and false idea that collaboration is equal to being continuously embedded in a real-time stream of preemptible audio and chatter.

Headphones, jabberboxes, telephone rooms, limited freedom to be remote — none of these are useful and none address the underlying privacy and human centric ergonomy points.

Practically the only thing left that can convince me to take the risk of a startup, with its lowered compensation, poor insurance, and the poor risk characteristics of equity, is giving me my own private office, and making sure everyone on the team who wants one also has one, from the summer intern on up to executives.

If a start-up cannot offer a private office, then the start-up has to offer me the same market rate salary, bonuses, insurance and work-life balance that any other company would have to offer me.

<comment><USER31> I review the Joel Test occasionally, even if some of the items are kinda dated. It's amusing how both big companies and startups consistently fail two of them (and the test says if you're at 10/12 or lower there are serious problems).

        8. Do programmers have quiet working conditions?
        9. Do you use the best tools money can buy?

Startups could out-compete larger companies here by providing both shared working space and private space, but they don't. Similarly for one of the tools, development hardware, if all you're providing is a macbook pro and maybe a monitor... well I'm sure Apple will significantly upgrade it any _year_ now. Meanwhile those of us who like Linux distros (or, god forbid, Windows after disabling all the crap) can have quite a bit of power on the go. My current (big) co gives everyone a desktop and a laptop, it's nice to have both. You might quibble if they fully pass #9, but at least they make an attempt.

"... programmers are easily bribed by giving them the coolest, latest stuff. This is a far cheaper way to get them to work for you than actually paying competitive salaries!"

Salaries are such a hot topic, startups unable to match need to differentiate from what the big players are doing in a better way across many dimensions at once, not solely the nebulous "more control of the product direction".

[https://www.joelonsoftware.com/2000/08/09/the-joel- test-12-s...](https://www.joelonsoftware.com/2000/08/09/the-joel- test-12-steps-to-better-code/)

<comment><USER32> "... programmers are easily bribed by giving them the coolest, latest stuff. This is a far cheaper way to get them to work for you than actually paying competitive salaries!"

Past time (20 years ago) programmers yes. Today's programmers? No.

The Math is very simple: if a company throws a lot of money, I can buy the latest coolest stuff for the next 10 years.

I doubt programmer is that gullible (otherwise they're probably a "Yes" man).

<comment><USER33> _Past time (20 years ago) programmers yes. Today 's programmers? No._

The economics of hardware are very different now. In the 90s you might have a SPARCstation or an SGI on your desk at work, amazing gear you could never have afforded for yourself. Now you can easily buy a home PC that's better than any corporate model.

I'm sure it's still true in some industries, 3D printing maybe, but not in software anymore.

</comment></comment></comment></comment><comment><USER34> One of the "weak" points a startup has is the brand perception.

Some-role at FANG sounds more impressive than same-role at a no-name startup.

Even the startups themselves like to brag that they were started by alumni of brand name employers, rather than alumni of other startups.

So, in what concrete way can you shift this?

There is no easy solution, but you can try and follow the same route you did for startups.

No-name (YC 18) is a better brand then just-no-name.

Allow/encourage employees and encourage/require your startups to brand people as "YC Startup Engineer" rather than "no-name Engineer".

It may sound a little strange at first but there is a probability bigger than zero that if you promote this correctly, as you did for startups, you may end up at top of the prestige pile.

Just 2 cents from a guy with none ;)

<comment><USER35> +1 to not dismissing prestige, although I'm not sure I agree with this plan. Prestige is easy for some people to dismiss, but it can be a very big deal to others, especially (in my experience) in Asian cultures. My girlfriend's family still doesn't believe that I quit Google to work at a startup--they assume I got fired--because _who would willingly give up that prestige?_

<comment><USER36> I'm not sure if that's an Asian thing, I actually only learnt the importance of prestige after coming to bay area. When you mix with people with prestige and without, sharing job hunting and interviewing experiences quickly lead you to realize the importance of brand name recognition of your school and past employers.

</comment></comment></comment><comment><USER37> So, I work at a startup. But, to echo what literally everyone else has said:

 _The money is better at big companies._

There are exceptions, but you almost certainly won't work for one of them. You will make more money at Google or Facebook or Netflix than you will at all but the luckiest choice of startup. Note I didn't say "best" choice or "most successful" choice. Gotta get in small, and exit big, which, no matter what anybody tells you, is more luck than skill.

That said, why do I work at a startup? Because the feeling of being able to meaningfully affect its trajectory (both technically and in terms of product) just matters to me. You can't get that at a big company, and for me that more than makes up for the ~50-75 k$/yr I gave up for it.

But I'm in the _extremely_ fortunate position of having very frugal tastes, a significant fallback fund (I could afford to not work and maintain my current lifestyle for several years), and no dependents. Beyond the raw dollar amount, this also means that I'm basically indifferent to the prospect of losing my job, which as the other comments point out, is the other significant drawback of startups.

It's unclear to me that the combination of intangibles and tangibles works out positively for many other people, and I kind of feel that to a first approximation, recommending against being an employee at a start up is the right advice.

<comment><USER38> Your worldview will change when you've dependents. :-)

<comment><USER39> GP said "I kind of feel that to a first approximation, recommending against being an employee at a start up is the right advice."

Are you saying you think startups are better for people with dependents? That's surprising to me, could you elaborate?

<comment><USER38> No, it was a response to OP writing he had no dependents so doesn't value job/income stability so much. He seems quite lucid about the fact that this might change the moment he'll have a dependents. I was merely confirming it will. :-)

</comment></comment></comment></comment><comment><USER40> As a former startup founder, I tend to agree that most startups are low- balling early employees. These employees over-value their stock by imagining what it would be worth if the company reaches $1B valuation. It really is a lottery ticket.

But in my opinion, the answer is more pay, not more equity.

Employees should get market comp, period. Doesn't matter how early-stage the startup is. If a founder can't afford employees at market rate, they shouldn't be hiring yet. They could perhaps offer to take people on as co-founders -- with an appropriately equal share.

People looking to join early-stage startups as employees should be extremely skeptical of equity. Obviously, you want to take some. But if a small chance of getting super-rich is your goal, you should start your own startup. If you are going to make bets, bet on yourself, not on someone else, because you know yourself much better than you know anyone else, and wise bets are all about having information no one else has. Yes, non-founding early-stage employees can have a big impact on a company, but they are still beholden to the founders -- if something goes wrong, they can fire you but you can't fire them. Making a big bet while letting someone else hold the cards is just too risky.

Instead, _demand market comp_. Do not join a startup that won't offer you market comp. It's not worth it.

<comment><USER41> I don't quite understand. On the one hand you're saying that early employees should "demand market comp" and on the other you're saying that equity basically doesn't matter (and if you feel this way, it doesn't really make any sense to be joining a startup anyway). Are you conflating "compensation" with "salary"?

"Market comp" for a good engineer with several years of experience in the Bay Area is something like 250k - 350k at a Google or Facebook (with some variation in both directions here). It's not realistic, nor consistent with the market, for an early-stage startup to pay people this much in cash.

Early-stage companies should offer sufficient equity such that their employees should in expectation earn at least the same as they would at a public company. If their expected earnings are less than this, then more equity is absolutely a good solution.

<comment><USER42> 250-350k is low for Google and FB. It's more like 400-500k if you are senior, 500-700k if you are staff. This is including RSUs

<comment><USER43> How do you explain these numbers?

[http://www.h1bdata.info/index.php?em=&job=Senior+Software+En...](http://www.h1bdata.info/index.php?em=&job=Senior+Software+Engineer&city=&year=2018)

<comment><USER40> Those are not Google and not Silicon Valley.

Try:

[http://www.h1bdata.info/index.php?em=Google&job=Staff+Softwa...](http://www.h1bdata.info/index.php?em=Google&job=Staff+Software+Engineer&city=MOUNTAIN+VIEW&year=2018)

And keep in mind that base salary (what's reported on that page) is usually about half of total compensation. (Bonus and stock being the other half.)

Also this appears to be the H1B database. I'm not sure how H1B salaries compare to the overall average.

<comment><USER44> > I'm not sure how H1B salaries compare to the overall average.

H1B salaries are typically lower than average. Why do you think companies spend millions lobbying for more H1Bs? To pay them more than average? :-)

Also, keep in mind Google only has to disclose base salaries for these H1Bs. For a staff engineer, most of the total comp would be in bonus pay and especially RSUs. They can easily be making $400k or more through those means.

<comment><USER45> Do you have evidence that people coming on an H1B visa get paid less than their non-H1B coworkers (at same level / same seniority / same office) at Google?

<comment><USER46> I would suggest that while new hires of H1B might not get paid less, the market dynamics of not having as many alternatives would invariably lead to less valuable retention efforts by the employer. i.e. fewer raises, fewer promotions, smaller bonuses, etc.

As I understand it, H1Bs aren't too bad (transferability is a thing here), but other forms of visas are brutal in this regard.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER47> I was employee 18 at a startup recently acquired by Google. Maybe not super early, but I was able to make big contributions that had a large impact on our eventual acquisition. It was a fun ride but I won't be doing it again for one main reason: startup equity distribution makes zero sense for early employees. Founders get 20+ times the equity. Yes they take more risk and work harder, but they're not taking 20 times the risk or working 20 times as hard.

Also there's a bizarre reluctance to show employees the information they need to value their equity, like number of shares authorized/outstanding/issued, existing liquidation preferences, or the whole cap table. Although it worked out fine for me this time, I will never again take equity compensation in a small company without access to the cap table.

<comment><AUTHOR> The second part is something I think we can easily fix. Transparency about how much of the company you own needs to be a given with any good startup.

<comment><USER48> Should be law that to hire someone and pay them equity, you must have the employee sign that they've seen the cap table. Maybe even on a yearly basis.

</comment></comment></comment><comment><USER49> I was an early employee.

Lots and lots is said about compensation, I won't repeat it here. (Just treat equity like a tip.)

One pro is that I got to set a lot of architectural direction. Because we were small, I didn't need to put up with a lot of groupthink or bad habits when fixing some very bad problems in the codebase.

Another pro is that I had some of the best working relationships in my life while we were small.

A con is that startups are crawling with bozo managers and people who just can't handle the responsibility that their role entails. I used to spend a lot of time pushing back on people throwing unreasonable amounts of their work onto me.

(QA who wouldn't follow process and wrote incomprehensible tickets; and support people who just wrote "it doesn't work" instead of diagnosing the customer's problem.)

Ultimately, as the company matured, the above problems worked themselves out. I helped define the processes for QA and support. Defining these processes is a big pro, IMO, of working for a startup.

Also: Incompetent people manifest themselves in startups just like in large corporations; it's just that large corporations tend to absorb them better. Startups die quickly if they can't push the incompetent people out.

</comment><comment><USER50> I just went through the startup job hunting process as a new-grad.

I think many startups have their expectations set too high for the work requirements & compensation they're offering.

Many startups want Senior Engineers with several years of experience, and they want people who live in SF.

This makes it difficult for new-grads and those who don't live in the Bay Area to get into the startup scene. Many people want to work remotely or live in other startup hubs (eg. Seattle) where the cost-of-living is less expensive.

New-grads, you could argue, are the most willing, flexible, and risk-taking to work at startups since the lure is more about experience than $ compensation. However, most startups ignore new-grads because they don't have the processes/ability to mentor them (even if the candidate could already be qualified for the position).

There is room here for:

1\. A company which offers services for helping startups foster remote teams

2\. A company which offers services for helping startups mentor new-grads

3\. A YC apprenticeship program that takes new-grads and places them in a YC startup w/ a mentor (who may or may not be at that company) for a few months to see if there's a match and hopefully transitions that person into a full- time role there

4\. YC satellites in other cities or encouragement for some YC companies to relocate out of the Bay Area

<comment><USER39> I agree with all you've said here, first of all.

> Many startups want Senior Engineers with several years of experience

This is often advertised. It's sometimes listed as a requirement. Those requirements are more flexible than new grads ever realize.

I think, coming from school, it's easy to take those lists of requirements literally. It's quite common, though, to hire people who don't match the requirements exactly.

Something is probably improvable, there - job listings are written in a kind of code that's not obvious at all to new grads. You kind of need a few years of experience hiring people to understand what they even mean.

<comment><USER50> I agree.

FWIW, my university had a required co-op program, so I already had some internship experience under my belt, and even so, I was getting rejected from entry-level "Software Engineer" startup positions simply on the basis that the companies wanted a minimum # of years of experience.

</comment></comment></comment><comment><USER51> Con: The leadership is typically really, really bad. Either clueless, sociopathic, selfish, or a combination of those three. Many founders become C-level by default without ever having to learn the skills they would need to have if they had to get hired by another organization.

Con: As mentioned by others, compensation and especially equity are ridiculously out of balance. A few years ago, a startup I was at (and had left a few years prior) found a buyer. I spent 5 years there, and I got about $50k. Meanwhile, a C-level employee who was there for less than a year before the company sold got $5M.

<comment><USER52> The leadership problem is a big issue. I'm currently looking for work in the post startup world, places that are "rapidly growing" and filling up their engineering teams. On Glassdoor I see the same exact comments, and it's something I've personally experienced as well

Pro: the engineering team is great and you'll learn a lot on the job

Con: management is constantly shifting focus so you end up working on features for a while just to throw them away. Or the company pivots 2+ times.

<comment><USER51> Same here. I'm ready to make a move, and there are some products I would really like to work on, at companies that have openings, but the leadership is so questionable that I would rather just stay away.

</comment></comment></comment><comment><USER53> I think the biggest problem with being a non-founder in a startup is that in 2018 that doesn't make you a key employee anymore. This leads to a bunch of problems, like worthless equity, relatively low pay, poor benefits, etc, but it essentially originates from a change in the business model.

In the older days when startups were aiming to be profitable by solving a new problem in a way that would attract paying customers, while competing in terms of efficiency, the contribution of an early employee to the bottom line was more noticeable, so the startups had to treat them better.

As of 2018, most startups aren't trying to solve a profit-generating problem that couldn't be solved with the tech from 5 years ago, but can be reliably solved now. Instead the VCs expect to get paid through an acquisition/IPO when either a BigCo, or the public buys into the hockey stick growth without scrutinizing the sustainability of the underlying business model (or being confident that the founder will find a way to pivot). So instead of being a cog in a BigCo machine, you are an extra in a VC-funded movie. And I don't think it's going to change without a major correction in the general public's expectations from tech.

</comment><comment><USER54> I think the biggest problem is transparency, which leads to wrong expectations.

As a 3-time startup employee, people always told me I should expect a pay cut by going to a startup. But how much? When I received a Series A startup offer and a FANG offer at the same time, I couldn't evaluate them side-by-side because I had no idea how much startup equity was worth. I negotiated hard and got surprising results, which left me wondering: what did I leave on the table? What about my colleagues who didn't negotiate?

As an ex-founder needing to hire a team of 6, I had no idea how to pay. We didn't have money for compensation consultants, and tools like Glassdoor and HiringPlan wasn't around. It wasn't until I joined my current team I realized how the top VCs and startups do it - by setting a compensation philosophy and have access to market data. For example, your early stage startup can pay 30th percentile on salary and 70th percentile on equity, and you consistently apply this no matter the type of role.

This is why we built HiringPlan ([https://HiringPlan.io](https://HiringPlan.io)) at LTSE. It's a free visual compensation planning tool, and we believe the first one with built-in market data used by top VCs and startups. Founders use it to figure how much to pay folks in terms of salary and equity, and whether they're treating diversity and inclusion with fair pay. Even employees and candidates come to learn what their roles and levels are worth, and use hard data to discuss compensation with their managers.

<comment><USER48> Sounds cool. Went to your website on Chrome on Android and it is buggy. I get 404s everywhere. More specific, when I click the carousel--showing SF example pay--left or right.

Like I can do a better job than that.

<comment><USER54> You're absolutely right, this visual quirk should not have happened. Fixing it now. Thanks for your feedback.

</comment></comment></comment><comment><USER55> I was the first engineer at Crittercism/Apteligent which was acquihired by VMWare. I was there for about 5 years before I moved on to Google.

Pros.

* Lots of fun engineering solutions however I wanted to solve the problem. Moved fast.

* Learned tons. Had to touch every part of stack.

* Great culture initially. Everyone was open to helping out as well as going out.

Cons.

* Low pay.

* Growing pains. Visible shift from devs dictating the product to doing mundane things that customers wanted (necessary evil, but obviously less fun).

* Hiring of execs once you get big enough. I was unhappy that I worked there for 4 years but some guy who came in and did nothing got 4x my salary and 100x my stock.

You should never, ever join a startup if your motivation is money. Most of them fail and you end up with nothing (as I did). Even if you're an amazing engineer and think you can push it over the top, you will probably end up as a staff software eng at google in the same amount of time making 500k a year.

The only reason to work at a startup is for the learning and for the fun. You need to leave if you aren't achieving either of those, unless you're certain you will make bank. Don't bother about loyalty to the company because it certainly isn't loyal to you.

</comment><comment><USER56> I've seen most of my pros and cons covered by others so I'll list my biggest con.

CON: Too many startups want you to be there in person. YC actively discourages remote employees. This is 2018. Remote work is not only reasonable it's beneficial. As an employer you can get higher caliber employees for less money. As an employee you get far more freedom and don't have to live somewhere you don't like.

</comment><comment><USER57> One of the prime advantages for me is that I could find a company with women in leadership roles and I could interview everyone at the company before taking the job. I am absolutely willing to give up monetary compensation in exchange for working in an environment without sexual harassment, where I can have a significant cultural impact and with fair compensation & career progression.

The downside is that there isn't a good way to find startups where that is true (and especially not where it is _actually_ true rather than just PR), and it is not what startups in general are known for. I networked my way into this particular spot, but if I were looking for another similar opportunity I'm not sure where I'd look.

<comment><USER58> There were a couple in the May Who's Hiring posts that probably fit your criteria, not sure about June, though actually reading all the individual posts takes quite a bit of time.

</comment></comment><comment><USER59> A perspective from India. I was at one of the big 4 when I made the decision to leave for a startup. (The salaries at FAAMG aren't quite so eye popping relative to other companies in Bangalore and are about 1/3th to 1/10th those in the Bay Area.) I tried to look for a founder for whom I could work for, but the conclusion that I came to, was that it made no economic sense working for an early stage startup (pre Series-A) as an employee in India. Equity had no value, particularly as it not only had all the problems that equity has in a Silicon Valley startup, but given the very weak legal system, it would be impossible to enforce contracts. Post Series-B the salaries are quite attractive by Indian standards (still 1/5-1/10 of bay area). So I went the founder route. The irony is that as a founder, this situation now comes to bite me. It is next to impossible for an early stage startup to hire engineers, even at market rates. You have to pay a substantial premium over market to compensate for the risk the employee is taking. This may be one of the reasons, that India will have trouble starting hard-tech companies. The startups that I see getting traction, are typically market focused -- e.g. food delivery, etc. So are not as tech-heavy as as say a SaaS startup might be, as they rely on scaling up a low-skill workforce (delivery men etc...)

</comment><comment><USER60> Pros:

1) You almost always will own a larger chunk of the core product, and it's easy to point your finger to details that you played a big role in figuring out.

2) At good (small) startups, the transparency is enough so that you have trust in your leadership and understand how big decisions are made. At big companies, it's generally far more convoluted.

3) You gain a skillset outside of proprietary internal tools. This is often overlooked, but if you get used to the internal tools at your company, it means your skills are not nearly as transferrable if you used other industry standards. This makes you more valuable for other jobs.

4) Startups can be a great way to broaden your horizons and jump into a new industry.

5) There are things you will learn building a startup that you really probably won't learn much of at a big tech company. The decision to go to a startup isn't just a compensation risk tradeoff. Examples: you are typically exposed to vastly different parts of the company much more, and you more often learn how to build things from scratch.

Cons:

1) Salary expectations honestly need to be lower, and you need to be excited about the job despite this. There are lots of comments here about this.

2) Benefits and perks are less, but I typically don't consider this as big of a deal as most people. But, it's pretty objectively better at the bigger well- known companies.

3) Company culture can vary tremendously, and there isn't a great way to know much about this without actually working there. OTOH, you can learn a lot more about the culture of the big companies because there's a better chance you know people there =).

4) The stress levels are generally higher at startups. Similarly, achieving a good work/life balance is definitely harder.

I've honestly always felt that human connections play a decent role in helping a person figure out what they want to do. If their social and/or professional bubble isn't into startups, then you already have quite a mountain to climb, even if you think they would love it (and even if they seem to be genuinely considering it).

</comment><comment><USER61> A silicon-valley YC startup is mostly cons:

\- cult-like obsession with working "hard" that amounts to pressuring people into burning themselves out

\- have to be around people who act like everything is great and they're killing it all the time even though in reality running or working for a startup is super stressful and you're usually teetering on the verge of failure

\- being compensated in the non-fungible scam that is options instead of equity or shares

\- don't know whether you'll still have a job tomorrow

\- make less money than you would at a bigger company

Some of those things appeal to some people, and the SV hypetrain tries really hard to act like they're great but mostly they're objectively bad.

I believe that 3/5 of these are avoidable though:

\- People who work 60 hrs/week aren't much more productive than people who work 30 hrs/week most of the time. Productivity per hour drops off considerably for jobs that are cognitively intensive. Plus it's unsustainable except for a tiny sliver of the population.

\- Unfortunately, my experience in raising money is that it's largely theater, and you have to pretend like everything is great all the time. That act ended up seeping into the rest of my interactions with people because there's a tendency to turn into whatever you pretend to be. I've had to make an effort, but I believe it's possible to stay true to myself and not become a caricature. I'll report back on how that works out for me after a few more years.

\- The whole private equity system is fucked for employees and I hope crypto fixes the fungibility issue. In the meantime, anyone who pays their early employees in options should be ashamed of themselves.

Obviously, a startup simply can't compete with a big company on salary or stability, but being honest about the reality of the situation and offering real equity can help.

</comment><comment><USER62> I don't know if I've been unlucky twice, but I think the biggest problem I see with working at a startup is the lack of transparency on runway and the security of whatever form of compensation I am getting. Twice now (in 2 diff companies) I have been stuck in the position of finding out with only a few days' notice that paychecks are not getting wired and we're hunting an investor to bail us out.

Somehow it has become ingrained that a CEO's job is to build everyone up and paint the vision. Well, that's great but somewhere along the way we forgot about the basics of personnel management. Think a co-founder is taking a chance by going without a salary? How about the dude with options and a family.

Sure, people know what they are getting into when they join a startup - <USER2> should - but I yearn for YC's next class on "Startup Ethics 101".

<comment><AUTHOR> FWIW, we would consider that kind of behavior from founders to be utterly unacceptable - like Theranos-level unacceptable. I'm sorry that happened to you.

</comment></comment><comment><USER63> -A perspective from Chicago-

Early stage engineer at startups (including a unicorn):

pros: Fun work, you learn a ton, unlimited PTO (if you can actually use it), lavish benefits like free lunch, decent company culture, opportunities to try new things.

cons: Poor work life balance, low chance of a bonus, low equity if any, poor management/leadership, lots of hand wavey bs about being number 1, poor career progression, lots of over selling of what you'll be working on, Chicago isn't big on "cashing out" so most startup equity wont really net you much if anything.

compensation: Average for the market in Chicago, depending on where you land as far as talent and skills you can probably get 100k-200k base.

Big tech companies:

pros: great work life balance, annual bonus from 10-20%, decent career progression, more opportunities to specialize in something if that's your thing.

cons: Lack luster tech, no equity, lots of red tape, lots of mediocre/bad engineers, occasionally have to work with legacy code.

compensation: 100k - 250k base salary based on skills/talent/position.

From my experience in Chicago it really comes down to stability, work life balance, and trust. From what I've seen the big players are usually a lot more upfront about what you will actually be working on day to day and they provide a level of stability that others can not. On the other hand though you can grow a lot more as an engineer at a startup if you put in the effort.

<comment><USER64> Maybe Glassdoor and Angellist are not good sources but nowhere have I found any kind of jobs with that level of compensation. Then again, 100k-250k is a HUGE range and I imagine the distribution is heavily skewed towards the lower end.

<comment><USER65> 200k is not hard to get in the bay if you have more than 4/5 years experience in a similar position or more than 8/9 years experience in the industry. For most unicorns that's the 75% percentile for base compensation in Sr. Software Engineer roles.

Edit for data: base at Google is 191k so I'm not that off with my estimation [https://www.paysa.com/salaries/google--senior-software- engin...](https://www.paysa.com/salaries/google--senior-software-engineer)

<comment><USER66> There's several good data-points on compensation here: [https://goo.gl/iHw7cj](https://goo.gl/iHw7cj)

It's also broken down by area of focus (ex. ML / AI pays exorbitantly well right now).

</comment></comment></comment></comment><comment><USER67> I can't think of any pros. Most startups I worked at had long hours and shitty pay, with a hefty dose of koolaid. Most lacked any sort of business plan besides "raise more money".

Stock options at startups are worthless, since there's no market for them and the terms are terrible.

Why make $90k at a startup with some worthless options, when you can work at an established company for $150k+ and get options that are already worth something.

<comment><USER68> You actually get to do something meaningful, at least to the company.

vs working at one of the big companies and doing fuck all.

<comment><USER69> "do something meaningful"

I don't see what about the problems YC18 are tackling are any more meaningful than FANG. Can you enlighten us?

<comment><USER68> Yeah okay.

You see, after the part your put in quotation marks I added on "at least to the company". This was meant to mean that the work you are doing is meaningful, but perhaps only to the company. Rather than working on a small part of a small part of a small part of the massive machine, you get to work on the entire thing because no one else is around to do it.

I really don't understand why I got downvoted for that. Not sure what part of the HN hivemind I upset with that, seems fairly uncontroversial.

<comment><USER70> > Not sure what part of the HN hivemind I upset with that

Intentionally or not, you implied that people working at big companies (which is a lot of the people here) are not doing anything meaningful.

Second, there's an immune response to this idea because it is part of the startup mythology that leads to a lot of people making economically suboptimal decisions about where to work, which is basically the whole topic we are discussing here.

</comment></comment></comment></comment></comment><comment><USER71> You have 650+ responses already, so I accept mine will be in the `/dev/null` of history.

As somebody who has worked at startups, including a Y-Combinator startup.

The I have experienced three primary hiring issues that are so common they are worth noting.

1\. People presume startups are inherently less stable than larger corporations. Risk aversion and the presumption that larger organizations are more stable in all cases, causes the candidate pool to drop. Helping people understand that competency is always in demand, would certainly help open up the talent pool.

2\. Intentionally conflated salary figures have led to disillusionment with expected income. As many people already mentioned prior; how much are people really making? I have encountered several people who believe they absolutely deserve $250-350k, despite not having any requisite skills. Why? Often because recruiters have told them that is what they deserve... or because companies offering (often intentionally over-evaluated) shares, lie.

3\. An unrealistic expectation of the number of hours they must work. Sure, there are some poor companies which believe hours-worked = value-added... but how many good ones? My experience has been that candidates expect they will have 60+ hr/week of work. Really? That's just not the case at companies with non-trivial intellectual property.

Want to convince more skilled developers to join the startup world? Dis-spell these myths.

<comment><AUTHOR> Actually I'm reading all the replies :).

I agree with you very much that a real issue is myths that simply aren't true, or aren't universally true - working hours in particular.

<comment><USER72> Also compiling?

<comment><AUTHOR> Definitely!

</comment></comment></comment></comment><comment><USER73> At a FAANG company my total (equity + base) comp is in the 300-400k range but the best offers I get at startups is ~140-160k w/ 0.0010-0.0040 equity.

Telling me that 0.001-0.004 of current equity pool (maybe-worth-something) > 150k cash now isn't usually convincing, especially if you have a lot of college debt and no safety net out of college.

This is just equity+base comp. I don't know how to price / factor in food, caltrain pass, healthcare, 401k matching, life insurance, discounts, performance bonuses, refreshers, and the fact that my job provides growth / would give me level match if I switched to a similar company (for example L5 SWE @ Google -> L5 SWE @ Facebook, vs VP of Eng at some startup -> L3 at Facebook...).

If you're good enough to get into Google/Facebook on a good team, it's scarcely worth it to join a startup as an early employee if you optimize at all for expected value.

That said plenty of FAANG employees feel limited career growth in the roles/teams they end up on, which is the main case a startup would look appealing. But also internal team transfers aren't that hard and you get to keep your nice comp.

One more datapoint: I have a friend who would totally work in startups despite high comp at a great company -- his blocker is US citizenship / worries for his family if the company goes under.

</comment><comment><USER74> I think there's a bit of confusion around what market comp is. It doesn't matter that Facebook, Apple, etc. are willing to pay top of market at $500k - while they're big firms who employ a lot of people, I'd wager they're still not the majority of the labor market. It is also unrealistic to suggest that the "average" engineer has a high chance of being hired there.

I suspect true "market" rates are between $120-200k, depending on the seniority of the employee and the stage of the firm. A lot lower once you step away from US Pacific.

I think the best reason to be an early employee at a startup is if you plan on founding your own startup one day and want to get some hands-on experience. You won't make the strategic decisions, but you'll have easy access to the founders and will get to learn a lot about how to set up and run a company (both good and bad).

So why not just found your own company? Well, here are a few reasons: (a) you need financing but don't know how fundraising works and don't have a network to tap (b) you don't know how sales works (c) you don't have a good co-founder lined up (d) you're still a junior engineer and don't feel confident you could build a product by yourself (e) you haven't found a problem that excites you enough to feel justified working on.

I also notice a heavy trend in the comments here towards: employees should be rewarded almost as much as founders. I'm sorry, but no. A good founder will likely have spent years researching and understanding the problem space before finally trying to set up a company for it. They may be paying you with their own money. At the very least they had to starve long enough to raise enough money to pay you. They've taken on pain and risk. If you want to get equity comparable to a founder, go work for a pre-seed startup for free. In other words, if you want founder stakes, go be a founder.

</comment><comment><USER75> Some pros:

More ownership/authority/responsibility over the tech stack means more flexibility and opportunity to shift rapidly when necessary (lots of tech debt potential, though).

Smaller teams make communication more efficient.

Cons:

Compensation is generally terrible. We might expect lower base/cash compensation, but total comp (cash, equity, benefits) is also much lower.

The equity portion of compensation is extremely lopsided in favor of the founders and investors. Early employees are taking almost as much risk as founders. It's a different risk, but mainly in kind and less so in degree. There are no good reasons for the parsimonious grant percentages, the terrible vesting schedules, or the lack of protection against dilution.

Startups won't compete on this, and so when they complain about a shortage of willing workers it looks like they don't understand or care about really basic human relationships.

The fix for this is straightforward: pay larger cash salaries and offer more attractive equity (shorter vesting, more RSUs versus options) and better protection against dilution. A 0.5% equity grant should not mean "0.5% (for now)".

<comment><USER76> > _Early employees are taking_ almost _as much risk as founders._

Why do you say _almost_? I'd say most of them are taking more, as most of them won't have a seat at the board, IOW they have less control over the direction of the company.

<comment><USER75> Good points! Most of the time, though, employees draw a (slightly) bigger salary than the founders, at least until real funding (Series A or B) is obtained. Then unless the company changes its compensation model the balance definitely and clearly shifts: employees are taking bigger risks.

</comment></comment></comment><comment><USER77> I'd like to recommend something: discourage 1-year cliffs in vesting schedules. I recently joined a BigCo where your stock vests monthly as soon as you start. I felt comfortable accepting that offer because I knew I could quit without leaving money on the table if I hated it.

Before BigCo, I was at a YC startup for 8 months that I disliked working at, but felt that I needed to hit the 1-year mark for the equity. That startup was generous enough to ignore my cliff when I told them how I felt, but I don't think most companies would do this.

I think moving cliffs to 3 or 6 months would make startup opportunities much more interesting to job-seekers.

<comment><USER78> Sounds like Cap Table hell. If you're only there for 3 months, why should you get rewarded when chances are you didn't contribute anything to the company? I think a 1 year cliff makes even more sense for a startup than an established company because you really should contribute something before hitting the cap table as someone with employee options.

<comment><USER77> I think you can contribute a meaningful amount to a startup in 3 months. Arguably the top reason to join a startup is to make faster impact. I'm not saying this is possible at all startups, but most startups yes.

Options/equity are a component of your compensation and I'm questioning the reasons we wait a year to get it. I think it would be more employee-friendly to smooth out the vesting schedule.

Startups seem to be having a hard time finding talent (probably why this thread was started). Everyone already _thinks_ you work on more interesting problems and make more impact at a startup, but it seems like those reasons alone aren't attractive enough right now. If startups can't pay $300k/yr cash, then they need to think outside the box to entice people to join.

What burned me working at startups was the 1-year cliff and 3-month exercise window after leaving. I'd consider working for a startup again if those two disadvantages changed. Until then, I'm very happy at BigCorp.

<comment><USER78> I disagree, I don't think anyone can contribute meaningfully in 3 months. I think a one year cliff is perfectly reasonable for a startup. We will agree to disagree, but I don't think any startup will agree with you, it rewards people who stick around for too short a period of time and makes their cap table much harder to maintain.

</comment></comment></comment></comment><comment><USER79> Hi Jared, I'd advise you and your team to take a hard look at GIPS (global investment performance standards) and create a similar model for startup equity packages.

Call it whatever, but the standards would have employee friendly terms so that people joining early stage companies would actually get something if the company liquidates.

Little stuff like recruiters need to not say stuff like "we are already valued at X, so that is great"... wut?

Or...

Big stuff like: 7 year option excersize term instead of 3 months. (Gross).

No one who understands the asymmetry of joining a startup would do it. Only people who dont know any better.

This is your opportunity to use YCs power to get people interested again.

<comment><AUTHOR> Thanks for the pointer to global investment performance standards - that's a good analogue.

We already agree about 10 year exercise windows ([https://blog.samaltman.com/employee- equity](https://blog.samaltman.com/employee-equity)) but we need to do more to make it a standard.

<comment><USER79> The brilliance of the GIPS is that firms cannot be partially compliant and it is 100% optional.

The reason a 10 year excersize window is meaningless on its own is that you cannnot control or know how your share class will be treated after you leave.

You need a set of standards which clearly allows employees to capture value. Otherwise it is all marketing. Smart people will see through that. As they already are.

</comment></comment></comment><comment><USER80> This is a bit nuanced, but i'll try to be brief:

\- housing in the bay area is substantially more expensive now, so you need to already be pretty qualified in your role to justify your cost \- this partially goes against Paul Buchheit's old point that startups allow you to do work you'd otherwise be unqualified to do \- because startups work on building (rather than maintaining) products, the tech skills that startups want are different from the tech skills engineers in big companies are using \- universities aren't really making up the difference

Options: \- YC makes its own university for engineers/scientists

This goes along Alan Kay's point about not relying on vendors. If there's a particular skillset that YC cos want early engineers to have and people don't have it (at the scale YC collectively wants), it may make sense to teach it.

<comment><USER81> San Francisco needs to build some frikken housing if it wants to keep adding jobs. That so much of the city is covered in single family homes is an affront to everyone trying to work here.

</comment></comment><comment><USER82> The Work at a Startup resource is great. We've found it to be an excellent hiring resource.

As other folks have noted, the pros/cons of working at a startup vs an established Silicon Valley tech company have shifted over the past couple of years. I think of venture-backed tech companies as falling into three broad buckets:

      1. early stage startups
      2. "post-Series B" high growth
      3. large, publicly traded

At a startup, you get to see a lot (both good and bad) that's highly relevant if you want to start a company yourself at some point. You have much more responsibility earlier in your career than you will have anywhere else, and you get an equity lottery ticket.

At a high-growth company, you have the invaluable experience of seeing growing pains first hand, your equity is much more likely to be worth something (statistically) than at a startup, and down the road people in the San Francisco startup ecosystem are likely to look at this experience on your resume as uniquely valuable.

At a big company, you have great work/life balance, great guaranteed (or quasi-guaranteed) comp, and -- sometimes -- you have unique resources available to you.

I wrote a blog post earlier this year about this that goes into more detail: [https://medium.com/@kwindla/what-kind-of-silicon-valley- comp...](https://medium.com/@kwindla/what-kind-of-silicon-valley-company-do- you-want-to-work-at-6739679c4bb8)

</comment><comment><USER83> Employees are more aware now that the startup they work for isn't going to be the next facebook or google so perpetrating that myth and offering below market comp with some equity isn't attractive to top employees anymore. As many have stated, competing on comp and benefits is a tall order so looking for other ways to compete would be useful. Focusing on location, an enjoyable work environment, and quality of life (not fake unlimited time off) would entice those who want to work for a startup but can't justify the tough work hours combined with low pay.

Most startups are located in the Bay Area and the cost of living there combined with lower salaries make it an unattractive proposition for early employees. Encouraging remote work is a great way to attract employees who may not want to live in SF, NY or Seattle and are happy to work for less than those in the major hubs. Or move the startup HQ out of the valley if remote just won't work. Competing for workers in places where the big players aren't will give them an edge and greatly increase the value proposition they offer to early stage employees. This combined with proper quality of life focus and increased autonomy and responsibility that startups offer would change my mind about working for a big firm and make me consider a startup job.

</comment><comment><USER84> If the comp, stocks, big $ is your primary motivation, look somewhere else.

We go to the startup for a thrill. For doing something you strongly believe. For creating something that didn't exist before. If you think you can do it in a big org, too, you are right, now go and try, get a job at Cisco or AT&T. Innovating there is like driving Kia Rio vs Porsche: it's a car, too. It goes thought the motion. But the thrill is not there.

Many people are happy in big companies. They won't be happy at startups. They're no worse because of this. Different stokes for different folks. There is no objective pro's and con's for startup vs big corp. There are properties, that ___match personal traits_ __. The key is to know yourself and what are yours. Trouble is, we don 't always know what we want, worse yet it changes over time with experience. And once we finally learn it, it's time to retire. Life is fun.

Now, you don't want to be taken advantage, right, so all written here about transparency, cap table, etc are the right things. Do check. Don't take below- market salary for the mirages of future. If you don't do these basics - <USER3> failed intelligence test and shouldn't be hired.

<comment><USER85> There aren't nearly as many people out there who want the thrill of working for a startup more than they want higher comp AND can afford to miss out on big-co comp as there are startups wanting to hire them.

If startups want to be able to fill job openings (the question posed in this Ask HN), they have to be able to offer something besides thrill.

</comment></comment><comment><USER86> I have worked at several Fortune 1000 companies and several startups.

One of the cons I see in even very small startups is trying to be like Fortune 1000 companies. There is an understandable reason for red tape when working at a F1000 company. But why very small startups overly burden themselves with red tape, convoluted procedure etc. is a mystery to me. Anything getting in the way of shipping on the way to product/market fit should be cast overboard.

Another con - the advice here and in related milieu (Eric Ries etc.) is to make a minimally viable product, ship as quickly as possible (within months), then iterate on that MVP. This is very sensible for most startups. But even in very small startups - the founder gets hung up on some feature details, or wants too many features. They want too high of a quality in their first release. Ironically this can become self-sustaining - the longer you wait to ship, the higher the quality bar becomes and thus the more time you need before shipping. You get into this mindset and soon you're starting development of Duke Nukem Forever in 1997 and wind up shipping it 14 years later to a giant thud.

Then there are the various financial cons which people here already talk about. Even with a good team and all of that, odds are 100 to 1 against you making anything more than you would working for Alphabet/Amazon/Apple/Google.

The pros are you can get a larger chunk of equity than at other places (though as others will say, there are many caveats to that). You can have an outsized impact on the company. It is more informal and less rigid. And if you get into a company with good people on an upward trajectory, it can be very, very good.

<comment><USER87> > They want too high of a quality in their first release.

I've actually have seen the opposite. Usually it's a very crappy early product and then when the company grows they get bogged down. (They'll never address testing, tech debt, etc)

</comment></comment><comment><USER88> I joined a startup 5 years ago as a CTO for 10% equity.

Fast forward 5 years. We merged with another company and we got 60% out of that merge. So then I moved to 6% equity.

Then we raised $15m in various rounds. My equity is now at about 3%.

In our last round we were valued at $20m. Well, all the investors have preferential pay back rights.

My equity is fully vested. If we sell for $20m today I will make a grand total of $97,000. If we sell for $30m it would be $397,000 and at $40m it would be $697,000. To bring our valuation from where it is today to $40m will take a few more years and be pretty difficult.

So I personally advise you not to join a startup and instead start a small side project and take a large salary at an established company. It's actually easier to make that level of money over 5 years even with a moderately sucessfull side project and large salary.

<comment><USER89> I had the opposite experience. I also joined a startup 5 years ago, and I was one of the very early employees. I received 0.5% equity as stock options, and my salary was around $120,000.

I stayed for a few years, and now I own around 0.1%. The company is now worth a few billion dollars, so my stock is worth a few million dollars. I have no liquidity yet, but an IPO is certainly on the horizon.

I don't feel like I took a pay cut. It was my first real job as a software engineer, and it gave me some good friendships and connections.

I can't say I learned a lot, and I didn't grow very much. The work was very boring and there weren't any technical challenges or interesting problems. I just got very burned out with the long hours and pressure. But it was nice to live in the Bay Area for a little while and have the "silicon valley" experience. I got very lucky and might be able to retire in a couple of years, so of course I'm going to say that the risk was worth it. But I do realize that I'm an outlier.

My advice: If you can somehow spot a potential unicorn and you'll be one of the first employees, then drop everything and join it.

Look for a YC company with some impressive investors, and try to get 0.5% - 2%. But I've noticed that YC has started funding a lot of companies that seem pretty terrible, so you have to be very careful. Don't think of yourself as a employee. You're a VC who invests their time and energy.

If the first one doesn't work out, then do it a couple more times. Work on your own side projects and see if any of those take off. The connections can be really valuable, and working at a startup is a great way to find future co- founders.

<comment><USER88> Don't take this the wrong way, but you are living in a world of confirmation bias.

There are 288 companies in the world with a valuation of > $1b [1].

There is most likely over 100 million companies in the world [2].

With these numbers in mind you will have a 0.000288% chance of joining a unicorn.

Except, 50% of all new business fail within five years [3].

So, you will have a 0.000144% chance of joining a unicorn.

My company is doing well (approaching $4m revenue). I have already hugely defied the odds. I am one of the sucessfull ones. My return for a 5 year investment will be $600k at best. My story is a VERY common one. Yours is impossibly uncommon.

> My advice: If you can somehow spot a potential unicorn and you'll be one of > the first employees, then drop everything and join it.

The advice you are giving is for people to drop everything for a snowball's chance in hell.

[1] [https://www.weforum.org/agenda/2016/06/unicorns-do-exist- and...](https://www.weforum.org/agenda/2016/06/unicorns-do-exist-and-you-can- find-them-in-europe)

[2] [https://www.quora.com/How-many-companies-exist-in-the- world](https://www.quora.com/How-many-companies-exist-in-the-world)

[3] [https://www.inc.com/thomas-koulopoulos/5-of-the-most- surpris...](https://www.inc.com/thomas-koulopoulos/5-of-the-most-surprising- statistics-about-start-ups.html)

</comment></comment></comment><comment><USER76> Hard to contribute any more to this. Most of the pros and cons have been given, and are well known anyway.

The problem space should probably be constrained to, pros and cons of joining a startup in 2018, in SV, now vs 3-5 years ago. Otherwise this isn't going anywhere interesting.

My take on it is, founders should be encouraged to only take 3x equity of early employees, not 10x or 20x. This risk is the same, and the founder's contribution is generally small relative to their equity. Ideas are plentiful. Execution is hard and matters the most. A founder cannot get it done by themselves, the entire early team really, really, really matters. And the typical founder is so inexperienced as to really lack what it takes to execute. The point of only taking 3x is not to penalize founders, it's to recognize the early people. It will help equalize the financial problem of joining a startup.

The second major problem is that there are too many startups. I'd suggest YC should halve (at least) the size of each class. Y'all (incubators, angel funds, etc in general) are throwing too many darts for your own benefit, to the detriment of the actual employees. By over-stretching the talent pool for startup employees, it discourages top talent from joining because they know it's that much harder to recruit the best.

I'd suggest also that YC fund/subsidize shared housing situation.

I hope that my comments address specifically problems of SV and problems of 2018.

<comment><USER90> A long overdue recession will solve many of these problems

</comment></comment><comment><USER91> Agree with the points around increasing equity and comp. One thing about option plans is that the devil is in the details. How things play out in a liquidity event or the tax ramifications can be large based upon how the plan was set up years prior. My guess is founders probably don't spend a lot of time sweating these details and the lawyers are concerned about protecting the company. YC could help by pushing for plans that are employee friendly. Publish articles about how to set up plans in a good way. Publish articles about what employees should look for when comparing offers. Possibly publish legal docs that companies can start from similar to other sets of documents you've published.

<comment><AUTHOR> Those are great suggestions - thanks!

</comment></comment><comment><USER92> Employment contracts and more equity may be the answer.

Contracts are already a feature of some companies for some employees. It would be very interesting if all good startups started doing this for all employees. It might make them a lot more competitive with the big players.

It could guarantee that employees walk away with some amount of fully vested stock and cash regardless of why they leave. It could promise a minimum of raises/bonuses/equity on a schedule. It could also formalize things like remote work, equipment, schedule, vacation, insurance, etc.

The idea would be to formalize in legalese the exact nature of the business relationship. Treating the employee with the respect they really deserve, and not like a disposable "at will" cogs. It puts more of the onus for an employee's success on the company. Any good startup should be happy to do this. The bad ones would likely resist it.

<comment><USER93> Contracts are tough when the employer isn't able to honor them. That forces the employee to vet the fairness of the offer and the employers ability to pay it out if needed.

</comment></comment><comment><USER94> I was one of the first employees at a fairly large dotcom 18 years ago and via a circuitous route through industry and academia I find myself back at a startup now.

One mistake I see early-stage startups make over and over again is low-balling key positions with the consequence that good engineers/designers are not retained but less-able engineers/designers are. As the company ages and the remaining OK-ish employees gain more power, a culture-of-mediocrity-death- spiral sets in which is hard if not impossible to escape from: products don't ship, sales suffer.

There are lots of good reasons NOT to work at a startup: Outside of startupland it is now easier to land a well paid gig at a big tech company than at any time in the last 15 years. In the public/state sector technology workers have experienced steep pay increases due to the intense pressure to digitalise. Consultancy and contracting remain lucrative, with established players constantly on the lookout for new hires, and individuals often able to multiply their pay by switching to contract employment.

I feel like the opportunities to influence and be promoted within a startup are in some ways overstated. In my own experience this has been just as easy in larger and more established organisations. Startups often lean pretty heavily on this argument and I am not sure if it is actually true for anybody outside of the founder's circle.

Startups often tie themselves up in knots trying to find out how to attract early employees, when really it just comes down to pay and conditions. Treat your early employees like functioning adults by offering decent pay, pension, holidays and benefits and great applicants will come flocking.

</comment><comment><USER95> I've been a repeat startup employee, and have now become a founder. The reasons I chose to live this path haven't changed.

If you have a comp.-driven mindset (i.e. you'd like to become a millionaire in X years), then I think there are far faster, better, easier ways to achieve that. Join a top-tier firm in the valley / NYC and do a decent job at getting promotions and you'll be well within your way by your mid-late thirties.

The best part of being part of a startup is your ability to be in fast-paced multifaceted problem-solving environment.

You can play quiet a few roles at a small company. As an early employee (engineer or otherwise), you can look at any part of the company, product or its internal operations and decide that it's something you care enough about to fix and improve upon.

I joined my first startup as an engineer, became a product manager, did sales, built employee on-boarding flows and training manuals, re-branded the company and learnt how to manage a sizable team as I moved on to marketing. All within less than 2 years.

You can get most of those experiences elsewhere, but not within that timeframe or the depth of autonomy you would receive to get it done is not attainable in a Big Corp.

This is exceptionally great if you're early in your career, are generally good at getting tasks done, but have no idea what your calling is. You can work at a startup (or a series of them) for a few years and walk away with understanding what you'd like to focus your time and money on for the next few decades of your life.

Only caveat that I would add is that if you'd like to achieve any of that, then it's paramount that you look for the right founders. Founders that are willing to give away autonomy and let you flourish. They tend to be the best ones and produce great companies with incredibly rich cultures as a result.

</comment><comment><USER96> The biggest pro IMO is that you get to see how a startup is built without having to take all the risk as a founder. Not everyone is in a position to jump in to a risk taking venture on their own, or have the ideas that lead them there. This includes not just the technology, but also a wide exposure to product, marketing, sales, finance and the investment ecosystem.

</comment><comment><USER97> I consulted for a certain 'unicorn startup' based in India during their stealth stage. I joined another (now defunct) startup as employee #2. Worked my @$$ off for 3 years before I called it quits. From my own experience:

Pros: \- No layers of management BS

\- Startups seem to be more flexible about work hours and remote work

\- More wiggle room to experiment; open to embracing new tech

Cons:

\- Inexperienced leads, managers, CXOs. I can't stress this enough.

\- Uncertainty. You gotta have a bag packed, ready to hit the streets at short notice

\- Slog it out as an 'early employee' for years and watch the company go down the drain. That is the story of most startups. The chances of making it big are astronomically low.

</comment><comment><USER98> While I absolutely agree with the comp aspect and think that's probably the biggest point, I want to add that management skill is also a huge factor. I've seen a lot of startups (YC and otherwise) fail to grow the team well because the founders are good hackers but not good managers. In a large company your manager has a manager who will help guide and review them, and you can switch teams without risking your current compensation and benefits or your vesting table.

At a startup there simply isn't room to move around without taking on more significant risks and at least waiting for your first equity cliff, and honestly many startup founders I've met don't have great managements skills, or the drive to learn them. There's also simply a matter of personalities, sometimes people just don't get along with their managers and/or teammates, but the fact that you have to switch companies and re-interview again vs being able to apply to your skip-level to switch teams is a significant difference.

Some ideas of concrete options to fix these:

* Shorter cliffs, even Google has a 2 month rsu cliff now, and I think Facebook is similar

* Maybe a hiring pool, again, similar to Facebook or Google where you pick your team after you "pass" your interviews, allow you to really work with different startups and feel out what it's like. I could see YC setting up a similar program where companies can choose to share an interview pipeline and let candidates talk to different startups after passing an agreed-upon bar for the pool. This is similar to [https://www.workatastartup.com/](https://www.workatastartup.com/), but to not have to formally do a technical interview for every single startup would be a huge help.

* Some way to try out/transfer between startups who allow it would be awesome. Similar to Facebook's bootcamp, if there was a way to still get paid, maybe a simplified consulting agreement that YC can help broker among a few startups for a month or so while a candidate explores what it's really like to work with each startup would be really helpful.

* Management training for founders, and a standardized way to review founder's management skills. If founder's were held accountable for their management skills and rated across one of these shared pools where their ratings were available to prospective employees, they would be much more incentive to improve their skills.

<comment><AUTHOR> Those are all excellent suggestions, thank you.

I'm intrigued by the idea of a "way to try out/transfer between startups who allow it". Would anyone else be interested in that, if we could broker it between a set of companies?

<comment><USER99> Along the lines of other comments: Consider creating "YC Engineering, Inc." Good engineers are concerned with their career path more than comp packages.

One function of YCE could be to enable engineers to swiftly choose projects rather than companies. An ML expert may work on optimizing income for AirBnB hosts for 6 months and then switch to working on a project at Coinbase Prime. Maybe they like Coinbase Prime and migrate to that full time or maybe they want to explore more with ML and switch to optimizing Cruise routes.

This would also be useful for startups since "fire fast" is a challenge for some. It would seem easier for founders just to tell you "this person isn't working out: they may be better suited for a more mature YC company." At that point you could pull that employee and have them placed at a better suited company.

Lastly I think it is a good opportunity for educating engineers. If a good engineer is proficient in Python but YC needs a lot of blockchain/financial engineers (e.g. Coinbase's ridiculous hiring growth) then there could be opportunity to guide that engineer to such a path if they're interested.

</comment></comment></comment><comment><USER85> In addition to the risk and opportunity cost and work-life balance issues that everyone's already mentioned: immature organizations. Both in the sense that the organization itself hasn't yet matured and that the people running the show are often immature.

This is particularly prohibitive for underrepresented groups - a combination of colleagues too inexperienced to know what professional behavior actually looks like, nobody more experienced to model better behavior, and nobody to turn to when things go horribly, toxically wrong.

The superfund site cases are thankfully rare, tho we've seen a few of them discussed here. Even some of the big names (Uber and GitHub come to mind) have hit the news with significant issues that have made employees feel marginalized. And that's just the ones that have made the news. Even if the problems are relegated to only 5% of the startups out there, that's a risk for a job seeker.

Moreover, the weird kool-ade assumption that the team has to all bond and be best friends and voluntarily go out for beers twice a week as long as the company is <25 people is off-putting. Especially for those of us who are more than 3 years out of college and already have friend networks and in many cases families we want to spend time with instead.

I would also mention that there are some things startups are great for in terms of learning, especially as a junior. You get exposure to a lot of things, the chance to wear different hats, challenges that in a larger company you'd be sheltered from by the presence of seniors.

But a very small company isn't always great for mentorship, especially in management. (My experience with management at early stage startups has been _awful_.) Even when management is excellent, startups are typically too small to have layers of management and opportunity to learn leadership and management skills.

Further, startups tend to be devoid of opportunity for advancement or promotion within the company unless they manage to grow very quickly - <USER4> is rare.

And when they do grow quickly, they typically grow too quickly to grow _well_. Hiring too quickly to preserve culture. Outgrowing processes and then taking 18 months to realize it. Hiring incompetents or toxic personalities because they can't find enough bodies to fill the seats at the at-best-median salaries offered.

And then there's the inevitable 18 month long "we'll be out of runway" death march. Never again.

</comment><comment><USER39> Pro: how much you learn.

My first engineering job was at a startup. I learned an _enormous_ amount in a year because there were never more than 3 engineers in that period.

I had to learn the basics - git etiquette, how changes are managed, how work is planned. But I also had to learn almost every technical layer. One day you're setting up DNS records for a new subdomain, the next you're choosing a JavaScript test framework, the next you're working with the CTO on designing an offline job-processor. It's a great breadth of experience that's hard to get at big companies, where projects typically have much longer timelines. People stay on one team, on one project, for years.

At a startup, you do it all in a mad dash, probably absorbing technical debt, which is also important. "Shit, the database migration didn't work, I just took down the site, shit shit shit" is a really important lesson that you can be hard to get at a big company.

I've worked at companies ranging from 3 employees up to 50,000+. Definitely learned the most at the smallest scales.

I see this when hiring, too. It seems from my experience that an engineer with 1 year of experience at a startup is typically much better-prepared than an engineer with 1 year of experience at Google (sample size < 10, I am likely biased by my experience and expectations, many exceptions possible of course).

</comment><comment><USER100> A lot of comments are complaining about the comp and the cons of a startup, I think when you join a startup you are basically making a decision that is risky and challenging in the first place especially if its a no name startup and the comp is really just part of the risk you acknowledge.

The real pro of joining an early stage startup (note: not a famous one with billions in the bank) is really I would say the satisfaction of being in a life-changing startup and grinding with a team, ultimately its really the developer experience you're going for. (Otherwise if its a unicorn, you're probably going for brand recognition, flexibility and comp)

</comment><comment><USER101> Pro: You get to build things from scratch, I like this one most.

Con: You find yourself at the end of the work-life balance, which might not be comfortable for everyone.

It's a great initiative, today itself I was thinking if there can a common test to get a job, but then I realized companies do not just test the engineering or field knowledge.

PS: I thought refreshing the page will show an early day picture of dropbox/reddit/stripe/instacart and so on.

<comment><USER102> > Pro: You get to build things from scratch, I like this one most.

That hits the nail in the head! Having exprience in building things from scratch has to be invaluable down the road in your career.

</comment></comment><comment><USER103> Note: this is my perspective, one as a software engineer who has mostly worked at startups and now currently at a FAANG

Pros:

\- Often easier to make lots of impact/move up quicker

\- (Potentially) less bureaucracy around decisions

\- (Potentially) lots of vacation

Cons: \- Typically not as smart coworkers

\- Often can get into more dysfunctional situations, whether by process or individuals involved

      - Not good managers/engineers also have outside impact. One company I have worked for had half of engineering leave or be laid off in the span of half a year, and most of them were above average engineers (and on the upper half of competence in the company as well).

      - Poor management structures and managers really decimate engineering.

      - Bad/toxic engineers also wreck havoc.

\- Compensation is significantly lower

      - Senior engineers can easily make over $300k at a FAANG if they are good. Stock options at startups do not come close to keeping up to pace with top performers, and are pretty much regarded as having no value given a lot of the shenanigans/risks engineers have to put up with to maybe get an exit. Startup compensation would have to change drastically to get many to even think about taking that risk, and as a result, the risk of a startup failing increases due to less competent engineers being hired, which decreases the startup's velocity and increases the startup's likelihood of acquiring damaging technical debt. The worst part about this is that startups try to be demanding over all sorts of random small things in the hiring process, yet don't hold themselves to the same standard when it comes to compensation.

      - The big tech companies have special benefits as well, such as employee stock purchasing programs, or paid sabbaticals. They do a better job of compensating for loyalty than startups do.

      - Dilution of stock value and the stock value opaqueness in VC-funded companies make engineers skeptical of their value. In addition, the preferential treatment of investors over employees for stock selling/allocation gives a lot of people distaste over the sweat capital dichotomy.

\- Increased likelihood of stress from not being allowed to address crippling technical debt or make things better so the company could operate smoother.

Just some things from my top of mind that I've observed/experienced. After spending about 4 years at startups, I'm not sure I'll ever go back - I was not a low performer either at any company I have worked at. At my last employer, one employee remarked that they would need to hire 3 senior engineers and a manager to replace my technical & managerial output & make up for the decreased output/morale of the team.

</comment><comment><USER104> I work at a startup (Reforge) and I own a startup (Casting Call Club).

I turned down a Google offer to do these startups.

Here's why:

1\. I have full control over building things from start to finish without politics.

2\. I work remotely, setting my own hours. All of us have been doing what we do for 10+ years. We care little about the hours put in and care a lot about the impact made. I can do this from SF (used to live), or Boston (where I live now), or Bulgaria (to visit family).

3\. I learn so much about the whole picture, rather than a niche.

I love Google (and my previous employer Eventbrite), and might return to them one day. For now, startups match me.

</comment><comment><USER105> I was a lawyer for a big SV law firm for 2.5 years doing company options, VC funding rounds and M&A. Then I was an early employee and engineer for a startup 5 years. I've seen this from multiple angles and the folks with a lot of startup experience will tell you that it's not worth the money - you're doing it mostly for non-monetary rewards. Engineers deciding between FAANG or a startup should not kid themselves with founder hype.

What can YC do to help? \- Provide transparency in the form of data, particularly into outcomes. For a typical YC graduating startup, what % of them have an exit within 4 or 6 years? What is the distribution of outcomes for a 1% common stock holder? Only then can engineers properly value their options. Founders will typically multiply the equity by the last funding valuation or $1 billion and claim that is how the employee's options should be valued. Only someone like YC has the access to do this type of analysis. \- There's a lot of incompetence and bad behavior by founders that investors and outside board members don't see. If you really want to understand what is going on, always have an inside channel. You should also provide these inside channels to all interested board members and investors. Not everyone is willing to do talk but someone usually is and ex-employees are usually willing to. You don't have to always do something about it but failing to talk to employees and only relying on founders to tell you what's going on is just sticking your heads in the sand. \- Options are broken. No employee should be required to fork out $50k to buy something that (1) they already worked very hard for, (2) potentially has no value, (3) will completely forfeit if they can't come up with the cash in a month, and (4) may even have to pay additional taxes to acquire. There are a few ways YC can help: (a) Establish a standard among new YC companies docs, stating that employees should have up to 12 months after termination to purchase the shares. Better yet, establish a standard such that employees should be allowed to keep vested options and not exercise until a liquidity event, no matter when that might be. If you guys set that standard, then maybe other companies may follow suit. (b) Advocate a change to tax laws so that exercising options does not have such negative AMT tax consequences, except when there is a liquidity event.

<comment><AUTHOR> I like the idea to use YC's dataset to calculate expected outcomes based on actual historicals a lot. That's a great idea!

Options have been mentioned before - we 100% agree we need to fix this and are going to work on it. [https://blog.samaltman.com/employee- equity](https://blog.samaltman.com/employee-equity)

<comment><USER106> And again, remember, the important thing here isn't only the upside for the founders, but also for the early employees.

</comment></comment></comment><comment><USER107> One giant risk is spending your formative career and life years being subject to the psychologies of young under developed founder(s), artificially granted empowerment to hire and manage employees by VC speculation.

This inexperience is a helpful pre-rec for ideating concepts and building innovative products that create massive value for the markets, but it's a crap shoot with low odds for being an effective manager: These are not people who rose through the ranks in management by demonstrating finesse in motivating groups of people into effectiveness. These types of people don't come into the company until Series B, C if ever.

Furthermore, founders are typically in hiring mode after they have secured financing - which means you only get to know them while they are not under as much pressure. Dealing with founders while they are under the additional pressure of fundraising is when the more vivid colors of personality (and harsher interactions) come out.

</comment><comment><USER108> I worked at a YC startup with a pretty good exit.

I was employee #40. I made about $100,000. The co-founders made about $100 million each. If I joined a FANG, I would have been granted $500,000 in RSUs, and they would have tripled in price during the time I was at the YC startup. Unless you turn into another Uber, the vast majority of wealth goes to founders.

</comment><comment><USER109> 30 here with a lesson for younger guys. Ask for more compensation not stock options. If you're offered stock options ask if they can swap it for an increase in compensation.

You vest slow, you may be fired before they vest, hell, the company may go under before they are even worth something.

Take the money.

Or take stock a few times and learn the lesson the hard way.

<comment><USER110> No startup is going to offer meaningful salary increases in lieu of stock options. You might eek out 10% more, you're still going to come out far below an established company offering liquid stock compensation.

</comment></comment><comment><USER111> I've been working at startups -- small and medium -- exclusively since I got in the field. I don't know if I'd have it any other way. When I visit my friends at the big companies, something about the rigidness and massiveness feels cold and out of touch. I like being able to see my CEO on a daily basis and have a relationship with him.

I think that's worth it to me, because unlike a lot of people, I'm not in this field for the money as much as it's just something I love doing. I spend my free time writing code whether or not I'm getting paid. At a big company, I suppose I can accomplish the same, but the difference is that I am afraid I will not know to what end my software is being used, while working at a startup I know exactly how everything fits together.

</comment><comment><USER38> As a pro, methinks "everything needs to get done" is the main one. It's a trait shared with all small companies, and can be petty things like buying the coffee to coming up with a plan to do X and overseeing it because nobody else has time. If you're able to take initiatives the startup/SME world is for you.

The main con in my personal experience is the grueling entitlement of some founders. Not saying this applies to any or all YC startups (never worked for one) but there are founders out there who expect an arm and a leg and then some, fully expecting their employees will work long hours for peanuts. I'm assuming this is less of a problem at YC companies since they seem reasonably well funded and able to actually pay employees properly (if not you're doing a good job at PR but shame on you), but it's worth raising if only in passing.

Another big con IMO is lack of experience of quite a few founders. The best way to frame this might be a lack of insights in the industry they're targeting. Rewarding turning a business model into something that can work with a pittance of cash and equity is not very enticing to say the least. I've seen this play out from within and without and it's just plain ugly to see whoever came up with the bright idea being thrown a bone as means of thanks while the founders and their VCs laugh on their way to the bank. With respect to this, methinks try to teach humility to founders you work with: if an employee or a consultant shows a much better way then by all means invite that person to the team as a cofounder or nearly so. It doesn't matter if there has been 3 or 5 years of work poured into a hopeless idea before that. I've seen more than a few startups where someone put a brilliant improvement forward only to be shown a bone as a reward, finding a new job as a result, and the startup eventually going nowhere or failing from lack of execution.

</comment><comment><USER112> I worked as an engineer at a startup early in my career (looong time ago). Company went under, stock => $0.

However, I am extremely grateful for that time. It taught me a wide range of non-technical skills that have proved invaluable throughout my career.

Most of those non-technical skills revolved around leadership opportunities, being given huge responsibilities vs. my skill/age (and having to figure it all out on my own), and getting to participate in many aspects of the business.

It ingrained in me ownership; and I've never been able to shake bringing that startup mentality to everything I do at a larger company.

Just my experience. Much of this perhaps is achievable while at larger companies, depending on the situation.

</comment><comment><USER113> I definitely echo the feelings about compensation at startups. They massively over-value their equity because there is no risk adjustment, they just assume that the face value price of the shares is how you should be valuing the equity, which is obviously total nonsense.

One surprising thing I encountered when leaving a startup was that non-startup companies would value my startup equity at zero when presenting offers, making that deal even worse.

I definitely felt like the founders were being completely disproportionately rewarded to everyone else, which drove some amount of resentment on my part.

One of the pet ideas I have is that founder/employee shares should have some sub-linear returns with the value of the company, with the gap being redistributed to people down the value chain. E.g. once the founders have gotten a few million from their shares, part of the returns should start going to early employees, and once they have some amount of money it starts going to later people, etc.

Another idea could be for employees to be paid with options for an entire YC batch, rather than a single startup to reduce the risk associated with being paid in equity for a single startup. This is tricky for various reasons, but tries to reduce the risk without meaningfully changing how much capital is needed.

When I lived in the Bay Area I was pretty surprised by the amount of startups in the South Bay, living in SF and then Oakland, I basically refused to commute down there because of the shitty transit situation.

There are "pros" for startups, but most of them depend a lot on what the alternative is, if your alternative is a high performing team at a well paying company, there aren't a lot of things in the pros column, but if your corporate job doesn't pay great or is sucking the life out of you, then startups could be great in comparison. So maybe the right way to frame this is more of an "is this right for you" question, than is it objectively good.

[EDIT]: Providing ways for employees to cash out their equity would do a lot to de-risk things too. Particularly for employees who have are leaving and there is little reason to keep them aligned and are willing to make space in the cap table.

</comment><comment><USER114> Background: Mostly startups (10 person, 30 person, 3 person accelerated at Imagine K12) but also large companies (Amazon, Bosch, Oracle)

Pros: 1\. Depending on your own personality and the size of the company, regardless of your role you have the opportunity to actually drive direction across the company. 2\. While titles aren't important in my opinion, startups do allow you climb the proverbial ladder faster. I became head of engineering 5 years in, that opened doors to skills I didn't think I'd pick up and opportunities I didn't think I'd have until I was 10 years in. 3\. It is mighty fun to work in a small team and see results of your work everyday. You care a lot more about customers, product, your team. You learn empathy.

Cons: 1\. The stock option sell - lets call it what it is, it is nothing but a justification for a pay cut with the sell of riches in the future. Every time I hear the stock spiel (shpeel?), I nod my head but I forget about it and always try and negotiate a salary that works for me in that I'd be happy to give a lot of my time for that amount of money. 2\. If you start your career and remain in a startup for a long time, it is very very difficult to transition to a large company if you want to {political klout, diplomacy, all skills you pick up at a large company are harder to pick up at a small startup}. I found this very hard when I transitioned from startup head of engineering to management at Amazon and quit within a few months

</comment><comment><USER115> Maximize for learning and personal growth. Startups provide the best place for this. If you have any dreams of being a founder your self, you need to spend time in trenches.

If you are a "career" man or woman, I still say spend 4-10 years at startups, then go grind with the usual suspects. By spending time at a startup you acquire a diverse/well rounded set of skills that make you an exceptional team member at big companies down the road. Forget an MBA at anything but a top tier university, do startup(s).

<comment><USER116> I used to think your first point was correct, but it's actually not. If you look at the founders of startups, very few of them have worked _in_ other startups. Usually they ladder up as the founder of progressively larger ventures.

The other pathway is a prestigious college / MBA program or working their way up through one of the big tech companies and then leaving to start their own thing.

I've seen very few "former lead engineer at X startup founded their own company" stories, and that was literally what I was trying to do with my career for probably 5-7 years.

</comment></comment><comment><USER117> Pro of startups:

\- Get responsibilities you couldn't get at a big company. Don't have a graduate degree in underwater basketweaving? Wearing many hats at a start up means you might get to do some basketweaving anyways. A few years of experience and wins to demonstrate with that and now you can get good basketweaving jobs everywhere.

\- Learn about lots of things. Learn a little about a lot. Learn what niche work you like. Learn learn learn. (caveats below).

Cons of startups:

\- Terrible comp. Enough said elsewhere in this. Also, handcuffs are weird, and the current tax system means that if your company does well, then the IRS might handcuff you even harder than the company does.

\- Environment that encourages overoptimism/kool-aid. This is true everywhere, but startups seem worse. That lottery ticket? Going to be worth millions for sure! Our competitors? They're idiots! Our employees? The best!

\- Terrible work life balance. Everything is on fire always, and you're running out of runway and "passion" is so important.

\- Fewer experts to learn from. Startups have fewer people, tending younger and greener. 30 years experience at OldMoneyCorp? That's an old stagnant legacy company, so that experience doesn't count. Oh, and they have kids so won't work here anyways. This means you'll do more things wrong and spend time learn things you didn't need to. Self guided learning is hard and has lots of backtracking.

</comment><comment><USER118> Im now a founder having previously worked in a startup as an early employee and in a senior role as it expanded.

As with many people here I had little faith in options. And now having more visibility as to how share structures evolve this has lessened even further. Despite best intentions as things progress the value of options and non- founder, non-VC held shares frequently take a whack. There is also a whole host of problems including liquidity and tax issues.

Ive have however seen some traditional companies structure early employee incentive in a completely different manor. They leave the cap table for investors and founders and instead arrange either a bonus or a profit sharing scheme that does well for these employees.

This typically works on trust, but Im sure there is a way to formalise it. Either through employee contracts which have a defined profit sharing goals (in a similar manor to a sales persons targets). Or even perhaps through contracts which ensure cash bonuses based on acquisition value are full- filled.

There must be ways to orchestrate it without effecting the finance of the company or complicating acquisition too much. For example, creating a pool of "tickets" associated with future revenue/profit/exit sharing commitments that can then be vested in a manor similar to options.

</comment><comment><USER119> To hire better you have to look at the past source code. I got hired once in a startup in France and what the CEO did is that he looked at all or so of my personnal projects. He could figured out I was a good programmer because I was able to run most of my programs and talk about them in depth. If you want to work in innovation, you have to have side projects. Has anybody tried that? Sounds quite like a silly question but I'm curious.

<comment><AUTHOR> I think this is a real advantage that startups can have in hiring over big companies. At most big companies, the first screen is from a non-technical recruiter, and they won't be able to do this.

</comment></comment><comment><USER120> Comp is a big one, discussed elsewhere.

The other professional problem that well-run startups have is that it's easy for early employees to feel like they're held to a different set of standards than the founders for professional growth. Essentially, founders are given chances to succeed in roles they never could otherwise, and early employees miss all the coaching and context that might help them succeed in similar roles.

Let's imagine I was a 26-year-old developer interested in startups. I have two paths:

\- I found a company. I have the chops to hack something together with my cofounder, and maybe we make something of it raise a seed. We hire another couple engineers, and with a couple big logos in a good market, we raise an A. At this point, I've learned a ton about what makes a business work from other founders and I see (far too clearly) the gaps in my own knowledge. I hire some marketers / salespeople to work for me, and we keep making things work. At some point, maybe I choose to hire a professional CEO, and I stay on as CTO. I still have a lot of leverage in the company. I still go to board meetings.

\- I join a company as the first employee, after they've raised a seed. I have good conversations with the other 26-year old founders over beer after work. I jump on the occasional phone call with customers and crank out features that they like based on that insight. We raise our A, though I'm still a software engineer since we only have 10 employees that all report to one of the founders. I quit seeing customers, because we hired a sales rep. We decide to hire management, and I'm considered for a line manager job, but we ended up hiring somebody externally. (She was awesome, glad we hired her, but I'm bummed I'm not reporting to the CEO anymore.) By the time we're 40 people, I don't talk to the founders much anymore, and I don't really understand what our bigger customers want. I don't have the influence I once did, and the codebase is too big for me to brute force that leverage through productivity. I start to look for another job.

There's nothing wrong with either story, but in the founder case, I was given a ton of chances and support. As an employee, I was given, at best, the support of a single manager while the company grew around me. This is fair, in some sense, but compared to the opportunities offered to the founders, it's far behind.

</comment><comment><USER121> I just finished a job search 6 months ago and it came down to comp. The earlier-stage companies I talked to seemed much more fun, but my life has some problems that money solves, and comp was very important.

The base comp was lower at the early-stage companies, but not critically so. The problem is that ~half of an engineer's comp these days is equity, and startup equity offers were far, far, far lower. My best startup equity offer implied ~2M for a 100M exit. If it takes 5 years to pull that off, I'm better off not just at FAANG, but any number of established companies.

> I think the next phase is to move the needle in favor of early employees.

I would love to see this happen. I like my new gig but I'm not scratching the entrepreneurial itch like I could if I were employee # less than 50. My life can handle the chaos of something failing in 24 months; FAANG will always be there if it doesn't work out. But I'm not in a position to be a founder, and I can't roll the dice for 5 years for the chance at 1/100th of the payday of a founder. But maybe 1/10th the payday?...

</comment><comment><USER122> I worked at startups back in the day and am now at a MediumCo and pretty happy with the situation, though missing out on the SV gold rush. I do think sometimes about returning to that world but I would need at a minimum:

* At least equal total compensation and benefits beyond the stock options.

* Reasonable compensation for the loss of job security.

* Support for my work-life balance, i.e. for my nonstandard schedule and geography requirements.

Given those things, what would motivate me to go to a startup?

* Solving a problem I care about, i.e. not selling ads or throwing elections or increasing device addiction.

* Serious, grown-up founders and leaders: no Boy Wonders, no Tech Bros, etc.

* Using technologies I respect.

I don't know how helpful that is to your overall goal, but it might be interesting as an "older" guy's perspective (mid-40's). I sort of doubt I'll get involved in startups again but if I do, I strongly suspect it'll be either as a technical founder or as the technical founder's VP of E.

For people like me, the "YC Consulting" model proposed in another comment could be pretty attractive. I guess it might already exist at e.g. Google (Ventures).

</comment><comment><USER123> Summarizing the most popular startup con here: if I'm a relatively senior engineer, joining some late-stage startup for 180-250K cash comp and 50-100K options, then the payout in case of good M&A or IPO could be $20-100 per share (if I don't wait years, cash out at the end of the hold period and move on). So let's say in 4 years I can make $720K-1M cash and $1-10M in stock. Which is roughly comparable to the big guys.

Make it possible at the little guys too. More risk - more equity. What I see now in the Valley is that the series-A guys are offering the same stock (roughly) as the series-D. Just the strike price is an order of magnitude lower. I ever saw pre-IPO startup offering _more_ stock than seed-stage one. This just doesn't make any sense. ISOs are not dollars, their value is multiplied by the risk coefficient. And I feel that founders are somehow lured into thinking that their ISOs are even worth the strike price. Change that and you'll see more people coming to work for startups.

<comment><AUTHOR> Very interesting comment. May I ask a quick clarifying question?

When you say "the series-A guys are offering the same stock (roughly) as the series-D", what units are you comparing them in? Number of shares? Percentage of the company? Estimated $ value of the shares (and if so, how calculated)?

<comment><USER123> The number of shares. One can argue that early startup shares are less diluted and thus comprise a bigger piece of the company, but the risk is disproportional to dilution.

When evaluating an offer, you just multiply this number to the projected IPO price given the comparable (same industry, company size, etc) IPOs recently.

<comment><AUTHOR> FWIW, I wouldn't recommend using the number of shares as the benchmark for comparing offers (across any two companies, startups or otherwise).

Actual share counts are quite arbitrary. It's common for startups that are going public to do a 10 to 1 stock split shortly beforehand. Using your algorithm, an offer from that company would 10x more valuable the day after the split!

Much better would be to compare the expected value, by multiplying the ownership percentage by some estimate of the value of the company.

<comment><USER123> True. This metric is as good (or bad) as any else, a percentage of the company included. You can't predict dilution or stock split (the only startup I joined early enough to have the strike price of 11 cents which went IPO, did a _reverse_ stock split). But somehow the number of shares granted in a company of 20 ppl with stage-A money and 0 revenues is within 10% of the company with 3000 ppl and doing 300M in revenues. And also within 10% from the company with 200 ppl and 30M in _profits_. Go figure.

</comment></comment></comment></comment></comment><comment><USER124> Cons:

If you're an engineer in demand, and your startup exits nicely, your equity is still less than the market rate you would've gotten over the years. Less than your 3rd-best offer, for that matter.

Often you can't even know anything whatsoever about your upside and have to take it on faith. Faith! It is increasingly common that, as an employee, you are intentionally given too little information about the equity to know what you would be getting _even if_ you had a crystal ball telling you the price for which the company was eventually going to be sold.

In 2018, because both the salary and the upside are low, working at a startup is in the same bucket as working pro bono, except that it's pro bono founders instead of pro bono publico. But you'll still get a pitch that the upside is big in the event of a nice exit (you just can't be trusted with specifics), and you'll hear a lot of rhetoric about how being scrappy is better than having 18 cafes and 23 massage rooms.

In 2018, unfortunately, it is, in short, a bit of a scam.

Pros:

Lack of bureaucracy.

</comment><comment><USER125> I see a lot of talk about comp, and that is 100% an issue (particularly considering the time-value of money, that every year that you're earning more money you can earn ~10% long-term on that in your IRA/401k).

But, considering there is only so much money that startups have access to, and most early employees are not primarily motivated by money (I would hope, or else they are likely quite naive), the biggest let-down I've experienced as an early employee, that would have made up for the lower comp, would be actual access to the founders' networks and learning opportunities.

If being an early employee meant getting to meet with investors and help the founder raise money (and make an impression on those investors), if it meant being actively involved in the struggles of the founders involved in running a startup, then I suspect those of us who wish to start our own startup some day would consider that a reasonably attractive opportunity to really learn those skills and build their network.

<comment><USER125> The other thing that I think would be great if YCombinator threw their weight behind would be lobbying for universal healthcare.

I (and many others, I presume) would be much less risk-averse and more likely to start a startup or work at a startup if healthcare wasn't so expensive. One of the biggest benefits of working at a big company is their good health insurance, which many startups are lacking. So not only do you get paid less at startups, but your costs are higher if you or anyone in your family gets sick.

</comment></comment><comment><USER126> The single biggest con for me is asking me to move to the bay area on a sub $200k salary. I have 4 kids, I live in SoCal. The difference in mortgage alone means that I will be either losing money compared to my current job at a medium sized company or having an absurd commute.

I looked at bay-area job opportunities and FAANG would be break-even to small- raise, while all startups would be a minimum of $20k less money in my pocket for any sub 30 minute commute. My current commute is 15 minutes.

On top of this, from my sphere of people I know non-founder equity is a joke. One quote from a friend "You're more likely to get rich taking a job with no equity and sinking the difference in salary in powerball tickets." The largest exit from my social circle netted the (#3 employee) $60k, or about the difference in salary over the time working there. The best financial outcome for him was actually the massive raise he got by working at the payscales of the company that acquired the startup.

</comment><comment><USER127> One major con, as far as I'm concerned, is the increasing ageism that exists in the industry in general, but especially at startups. My father-in-law is 68 and can barely get an interview, much less an offer. He is _very_ technically competent. Any company of any size would be lucky to have him. Now, you might argue that he's too expensive, especially for a startup, but the fact is he just wants to work and is willing to take less money to do what he loves to do.

You could also argue that they won't hire him because he might retire at any point. Sure, buy why would he? He wants to work. Some at his age and experience even need to work still. And besides all that, even if he retires in two years, the startup would get a tremendous mount of value from someone with his experience over that two year period.

Given how badly companies need technical talent these days, its a shame that they leave that segment of the working population out.

</comment><comment><USER128> On the compensation point...

If you are a smart, quantitative person looking to maximize your income, you should go into investment banking, not software engineering. Partners at an investment bank can make $5M a year. You won't make that as an engineer at Google.

Since you're reading this, I'll assume you didn't go into investment banking, but went into engineering, likely because you found it more rewarding. Good job! Life isn't about money.

Now if you're a software engineer looking to maximize your income, go be a senior engineer at Google. You'll make $400k a year (supposedly). But you may find working in a smaller organization to be more rewarding / engaging / exciting. If that's the case, work at a startup.

You won't maximize your earnings potential at a startup. But you'll likely work in a nimble environment, solving interesting problems, and get a lottery ticket (options) to boot.

<comment><USER129> Aside from the probability distribution issues with investment banker income, it's actually a much harder thing to simply "go do".

Going straight into investment banking right out of undergrad is a privilege largely reserved for students of "elite" schools [1]. The other way in is post-MBA, but an MBA is quite expensive.

The hourly rate also looks very bad [2]; junior/entry-level research analysts routinely put in 80+ hour weeks, regardless of the reforms that were put in to attempt to curb that sort of abuse after multiple deaths.

[1] [https://news.efinancialcareers.com/uk- en/199099/top-50-unive...](https://news.efinancialcareers.com/uk- en/199099/top-50-universities-getting-front-office-investment-banking-job)

[2] [https://corporatefinanceinstitute.com/resources/careers/comp...](https://corporatefinanceinstitute.com/resources/careers/compensation/investment- banker-salary/)

(Edited to add a couple of pertinent links.)

<comment><USER128> I would argue that making $400k as an engineer at an elite school also requires some element of academic pedigree.

</comment></comment></comment><comment><USER130> I think the incentive structure for first 10 employees is completely broken right now. Adjusted for risk and dilution, the risk reward ratio for top 10 needs to be closer to the founders since they are taking almost identical levels of risk. I wish companies would value the stock part of their offer with respect to the valuation that investors have put money in. I never understand the huge disparity between the valuation of companies as understood by investors (in terms of their investing decisions) and as explained to prospective employees. From my point of view it would be good if the Startup clarified what they intend to pay me, put a hard cap on how much of that they can pay me in cash, and then allow me to use the remaining to "buy" stock grants at a valuation that closely resembles what investors have recently invested at.

</comment><comment><USER131> Pros:

      * More choice in terms of technologies you get to work with
      * Less bureaucracy
      * Once you've launched, typically a very fast life-cycle in terms of conception to production
      * Early on, you can fit the entire company in your brain
      * Investors are less likely to bring in stodgy "babysitters" and just let the founders do their thing

With the exception of the last point, the "Pros" really haven't changed much in the last few decades.

Cons:

      * Limited transparency from founders
      * Weak technical leadership in many "technical cofounders" or CTOs
      * Widening compensation gap versus established companies
      * Equity offers are often poor (related to above point)

For "Cons", the first two have been with us a while. The last two are a recent phenomena as our industry has matured.

</comment><comment><USER132> Of course, now that start ups are starting out side the bay area, that is the biggest appeal. There's a lot of people who want to get out of the Bay area. From the perspective of someone with a family: With the astronomical housing costs on the penninsula, working anywhere outside the bay area/penninsula is like getting a 1 to 2 million dollar signing bonus. Even with less than half the pay, you'd be much better off (assuming someplace reasonable: Albequerkee NM, Austin, Dallas, Chicago, Nashville, etc).

Nearly 50% of bay areans want to leave: [http://www.foxnews.com/us/2018/06/04/bay-area-exodus- nearly-...](http://www.foxnews.com/us/2018/06/04/bay-area-exodus- nearly-50-percent-californians-say-want-to-move-out-soon-poll-finds.html)

</comment><comment><USER133> People are forgetting that a start-up is inherently an unnatural place for employment. Given a choice, a rational decision will always be to work with the big companies, specially if those big companies are among the FAANGMU (or whatever abbreviation it is). And it's not only the money. The money is good no doubt, but it's the brand recognition. I know several folks who went to work at Amazon on a pay cut for a couple of years, and jumped way ahead on their next gig with a badge of honor of being an ex-amazon employee.

Now, the question is will you leave that job for a start-up. It really depends on your situation. Have you already been an employee of the big co? Then, sure go for it. Your employment at FANGMU has pretty much guaranteed you employment at middle tier companies with a good salary. No start-up has that kind of clout.

<comment><USER134> Well it depends. Some startups actually prefer you to have startup experience...which makes sense. They might like it if the startup is well known but I don't think that's a requirement. And definitely a lot of the experience gained in a huge corp will not be good for a startup.

</comment></comment><comment><USER135> Here is the very basic equation we are all looking for:

M(faang) <= M(su) + (CV * ES * CS)

where M(faang) is the money/salary over the expected timeline earned from a FAANG-ish company (many many of them), M(su) is the money/salary earned while in a start-up, CV is the Company Value when the Start-Up lotto is cashed in, ES are the Employee's Shares as a proportion of the company that the employee can sell for money, FR is the Fail Ratio of Start-Ups that get to the point that they can sell the company and don't just flame out.

Lets run some numbers to get a feel for the equation:

Say M(faang) is $125k/year and the timeline we are looking at is 7 years; that's $875k total. Say that potential start-up employee is making only $60k per year for those 7 years; that's $420k total. So, the expected paycheck at the end of the 7 years needs to be at least $455k.

So, CV * ES * FR must be $455k. FR is typically said to be 90%, as in 90% of start-ups fail, we'll take that as dogma too and set it to 0.1. ES is likely to be very small, even for very early stage employees, so without nearly any consensus via googling, let's set it at 0.001. CV is the company valuation when the start-up lotto is won, these days it's tough to find this out (it's mostly a power distribution), but let's be a bit conservative and set it at $500M. These numbers give us $50k.

That number is about 10x _less_ than what is needed at a minimum. The start-up fail ratio is really never going to change. So, either the CV must become about $5B, not $500M, or the ES must go upwards from a thousandth to a hundredth (honestly, either situation isn't unreasonable) to meet the minimum pay requirements.

You can play with the numbers yourself and add conditions too (stock mechanics, value of medical benefits, rent issues, taxes, etc), but the math isn't calculus, just nested algebra. Hopefully this will help others out when thinking of trying to join a start-up as an employee.

</comment><comment><USER136> Pro: Remote friendly (sometimes). Startups can't pay the big $$ for good talent, so they're more open to remote employees. I've worked for a few startups where I never met anyone else on the team face-to-face, worked from our corners of the world, and we built cool shit.

<comment><USER137> Con: Startups almost always screw the remote workers on stock and legal terms. I have yet to see a positive story. Illegal worldwide industry-wide non- competes, forward-dated options (if any), remote expensive jurisdictions, wrong financial info, etc.

So yes, remote is a sweat deal if you are getting paid cash, but keep in mind most of these founders were laughed out of the room in their own HQ city's startup community.

</comment></comment><comment><USER138> One thought experiment is to take your hypothetical market rate, and calculate the opportunity cost of working at the startup. Then think if you had that cost over say 5 years, in hard cash, would you take it and invest in the equity of that startup over other options?

<comment><USER139> Great way to think about it. It is a concentrated, illiquid equity investment.

</comment></comment><comment> d--b As an experienced engineer it's too late for me. I'm being paid 500k/yr working for a small successful hedge fund with flexible hours and remote work. There is no way I can gamble this away for an expected maximum upside of $10m with a 10year horizon...

</comment><comment><USER140> Pros:

\- More autonomy

\- Less administrative overhead

\- More executive interaction

\- Higher percentage of superstar colleagues

\- Work is more fun

\- More breadth of opportunity and interaction

Cons that YC can help with:

\- Less formal training

\- Less formal mentoring

\- When things go South, the cuts are worse and you have less notice

(The above can be mitigated by offering training and mentoring for the entire community, and proactive in-community job placement when companies fold)

Cons that YC can't help with:

\- Higher volatility in financial outcomes

\- Less predictable schedule and work-life balance

\- Less brand awareness for your parents to brag about

<comment><USER81> One idea to reduce volatility in financial outcomes: offer equity in the YC fund itself in addition to the equity in individual companies. That would also give employees an incentive to support other employees in the cohort.

<comment><AUTHOR> We've looked into that. It's hard to make the math work - when you slice up YC's equity into that many pieces, each piece becomes very small.

<comment><USER81> Well, presumably you'd have to take (at least some of) the companies' option pools as well, but I'd believe that the math still doesn't work: that just reflects that the equity for employees is not a valuable deal in general.

</comment></comment></comment></comment><comment><USER141> I'd like a portion of my equity to be shares of a Y-combinator fund. I can spread my comp risk across a batch of startups, just like a VC.

</comment><comment><USER142> Health insurance and housing instability is a _huge_ risk. Not to mention the weaker pay and corporate structure.

If company explodes within 4 years (like most startups), I'm off interviewing again, and my family relies on my health insurance for substantial coverage, as well as paying housing costs. Obamacare is getting gutted as we speak, so it might as well not exist.

if you want to change the game, set up a standard small company health insurance group and offer entrance to all employees and their families, regardless of pre-ex condition or whattever. So long as you find work for a company signed up with that group within, say 12 months from company collapse/being fired/whatever, you keep coverage. Effectively decouple employment from health insurance. Give me the ability to lose employment _for whatever reason_ (remember, Fire Fast is a popular creed) without putting my family at risk of bankruptcy or losing our house, and I'll be _far_ more interested in working for a startup.

Similarly, YC needs to contemplate pushing remote work hard on its companies. The amount of money I would have to ask for to live in the SFBA with, again, hedging the risk of company collapse or being fired is absolutely absurd.

There's extremely little upside for me to take the enormous risk of being poorly managed, company doing wrong decisions, market not being there, etc. The liklihood is that I lose money, my bosses are very inexperienced, and the business doesn't fly. Maybe I am a reasonably early stage employee and walk out with a $0.5m check (this is a reasonable ballpark for an IC). That's cute... RSUs from major employers equal that for reasonably senior ICs. Without the risk.

For comp, you will need to jack up equity substantially - probably some kind of preferred share not subject to clawbacks (I remember well how Skype took advantage of ICs) - _as well as_ meeting the cash salary of the big players. This hedges the risk of the company exploding.

These days, I generally only talk to startups who are past their A round, have paying customers, and reasonably experienced engineering management. And I expect market comp as well as a well seasoned benefits plan.

</comment><comment><USER143> As a startup employee, I'd say a big con is not necessarily the amount of equity, but the type of equity, and difficulty of evaluating it. Common stock really only provides exposure to the tail end of good exit outcomes, since other entities on the cap table get liquidation preference, participation, and so on. To make it worse, it's not standard to share information about capitalization with employees, so we have no real shot at valuing the equity portion of an offer. It would be nice to be able to know what our equity is worth, and get some benefit from a decent but not great exit.

</comment><comment><USER144> Pros:

\- accelerated responsibility, especially early in career

\- making something new

\- little bureaucracy

\- credentials matter less

\- can be more fun

Cons:

\- typically inexperienced, inept management

\- longer hours, higher instability, _and_ lower comp even if the startup pays off. Not quite the worst of all worlds but it's getting there.

\- lack of transparency about cap table and what options are worth. 90% of my colleagues don't even know about liquidation preferences. We expect early employees to make investor-level decisions with employee-level information

\- exits are rare or perpetually delayed. even acquisitions may mean nothing if you aren't a good fit at the acquiring bigco and are let go before vesting (and if you _were_ a fit, why were you at a startup?)

\- chaos, stress

\- typically hostile environment for URMs, monthly HR disasters

\- distorting effects of investor prejudices, expectations

\- SFBA-centricity; locks out the vast majority of founders and potential employees, and very high costs for early startup employees

You asked for solutions but I doubt many of these are easily fixable. Maybe we have to accept that startups just aren't a rational career path to maximize wealth. And especially for Americans, it's incredibly risky to try a startup, unless you come from a very privileged background.

The fact that startups are chaotic and run by inexperienced people seems to be a given. Unless you go to a "studio" model where you have a stable team of professionals spinning out startup-like projects all the time. Some people are trying that but IDK if it's ever worked.

Transparency about how funding and options work would be trivial to solve. But the founders, board, and investors all have the incentive to keep it hard to understand. But maybe YC could set new norms here, somehow.

It might help if YC's alumni network included more URMs. I know you're trying to fix that.

And maybe this is harder but at least at the startups I've worked at, there's been a lot of wasted effort simply in order to satisfy what various investors want _this_ month. But I've never worked for a YC company so maybe it's better there.

One possible mitigating factor to all of the above would be for the whole startup ecosystem to be more remote-friendly. The compensation starts to make sense if you have nationalized healthcare and don't have to pay SFBA rent and aren't in the running for other SFBA jobs anyway.

</comment><comment><USER145> It sounds like a lot of the criticism is that employees don't get enough compensation or don't get it quickly enough. With options, the variance is too high, since even companies that raise a lot may fail, and liquidity takes a long time. Plus, if the shares are voting, founders have to give up some control. I guess the variance will always be higher than many employees would prefer (at least not considering schemes that share risk among multiple startups), but how about something like the following for mitigating the concerns people are raising?

The company commits that some percentage of each month's revenue will be immediately set aside for existing employees (to a first approximation, split equally between them). Crucially, any investment should be counted as revenue for this purpose, since early-stage startups often get major investment before major revenue. Ideally the percentage should be something big, like ten.

To encourage employees to stay, the revenue will be paid out to them over a period of years, similarly to how options take time to vest. A detail to be worked out is what to do with any money that isn't paid out because the employee leaves. (Maybe just return it to the company, though that could give companies an incentive to get rid of employees after a major funding.)

The company should be able to revise this commitment but not without a warning period of, say, half the period over which compensation is paid out to employees.

</comment><comment><USER146> Wow, when did we all lose our souls? So many pro "FAANG" comments. Working at a big tech company totally sucks. Its soul sucking.

Personally speaking, I made about 300k at a FANG adjacent company - and I hated every moment of it. I quit to make less money at a startup. And I'd do it again.

Today, especially today, what is there to be proud of in working for a FANNG company? Google is working with the Pentagon on war technologies and new ways to abuse their users privacy with Internet spyware and spam; Facebook is a master of fake news and Donald Trump; Amazon is an anticompetitive monopoly.

If its only about money, check out mikekij's comment:

> "If you are a smart, quantitative person looking to maximize your income, > you should go into investment banking, not software engineering. Partners at > an investment bank can make $5M a year. You won't make that as an engineer > at Google."

Hacker news is the place to be positive about startups, the future, and technology.

<comment><USER147> It can feel like these startups aren't all that independent from those companies. Most are hosted by Google or Amazon and many depend upon Google or Apple to approve their mobile apps for distribution. Some get acquired by them.

<comment><USER146> Good point. These are big monopolies and its pretty tough to avoid them.

</comment></comment></comment><comment><USER148> One of the real cons of joining a startup that doesn't grow fast is that the founders of the startup will structure the acquisition so that the early employees get nothing. I'm talking about the "well the company has no value after paying back the investors, but the founders and their friends got sweet hiring deals at newco that otherwise they would have had to share with the other employees" sort of quasi-acquihires.

I've been through two of those (and successfully forced the acquiring company to give me $ in one of them because of how venally obvious the deal was.) I hear of these sorts of things happening relatively frequently. It's a real reason that I probably wouldn't participate in another startup.

For me personally, it isn't the risk of failure that keeps me from joining another startup as an early engineer. It's the risk that the founders will cut a deal in an acquisition that cuts out the early employees.

This would also be good for the acquiring company, they have a large risk in cutting a deal just for the founders. In one of the cases that I know of, the acquihire was a disaster because the founders represented to the company that they had the expertise that rested within the early employees and it ended with a great deal of waste.

So, fix this issue and I think you'll see better results overall.

</comment><comment><USER149> Pros:

* Access to new tech/growth opportunities

* Culture is often far superior to the big players

* Make an impact, you can have an outsized impact simply because of company size

* Nimbler/move faster due to less bureaucracy/overhead

Cons:

* Huge risk/feast or famine situation, working for a startup could mean retiring 15 years later or 15 years earlier

* Stress levels/health risks

* Complete chaos at times

* Mediocre / nonexistent benefits

* Sold as "do interesting things" but not always true. Startups have just as boring things that need to be done as any company.

* Career growth is largely based on the growth of the company

<comment><USER150> Ha, most startups use crap tech because the founders might not be highly technical and hire the first tech person they come across or they outsource and can't vet whatever cheap contractor they found.

</comment></comment><comment><USER151> I worked at a startup of a semiconductor fab early in my life, which was not quite the same as what you mean but I think the reason still applies. I wanted to see how these messes get made. After working in old organizations with lots of legacy problems, I wanted to see first-hand what the process was that led to these situations. It did.

Having worked as a contract programmer at software startups, I can say that the main reason would be, to have more power to direct how the software develops, instead of just having to accept so much of it as a problem on top of which too much as been built, and which cannot be fixed.

However, I worked at a software startup only as a paid-by-the-hour contractor, because frankly the attitude towards early employees time is appalling, and I have seen this in how many, many other people got treated at other startups. There really isn't enough of a potential payoff for early employees to justify the hours that they are made to work, and in many cases it is done mostly because it is so easy to demand that and no justification is required. Founders are by nature egomaniacs with ruthless focus on their business, and that can turn even very good people into the sort of person you don't want to work for (unless you're charging by the hour).

</comment><comment><USER152> More than 'pros' and 'cons' I see working at a startup as requiring a certain kind of personality.

Working at a startup: Ideally you'd have a high risk tolerance, be self- motivated, be interested in learning new things -- being a do-whatever-it- takes kind of person. The kind of person who wants to throw themselves into their work. You want the kind of person who just can't sleep unless they get their product into peoples' hands. Everything may well be on fire -- all the time -- and it's up to you to fix it.

What you get being that kind of person at an early startup is a breadth of experience, often in things you weren't qualified for initially. You get oversize impact. You build your reputation -- fast. You get to build an amazing network of similar-minded people who you can leverage whether the startup goes well or poorly.

The cons, of course, are that it may not go your way. Either because of you, or because of reasons totally beyond your control. At any moment. You may make a ton of money, or no money, or anything in between. It's not the kind of workplace that's a good fit for everyone, or even for every life stage. Big companies offer effectively a 'guaranteed' way to make a 90th percentile salary, startups definitely don't.

</comment><comment><USER153> I worked at a few startups over ten years ago. As a SW engineer I had unique value to the company back then - me being able to hand optimize code better was what set the company apart from the competition.

But SW has grown up a lot since then. Now you need more commodity, reliable engineering. Most of the low hanging fruit in SW have been picked.

Today's startup key employees are the designers, copy writers, sales people, and marketers. HW might still be where SW was 10 years ago.

</comment><comment><USER154> Pros:

* Technical skills sink or swim very quickly - you'll learn vastly more in the same period of time at a startup than you will at a big company. Or you'll fail.

* You learn to accept that failure isn't as bad as high school / college would have you believe - as long as you learn from it.

* Invaluable leadership experience very early on.

* A lot more responsibility early on - if you like to take charge and see things through it's a wonderful experience.

* Startups are usually founded by intelligent, successful, driven people - based on head count you usually work closely with them and have the opportunity to soak in that knowledge and experience.

* Connections. When you're young / early in your career a startup puts you in situations to meet people you wouldn't normally be in the same room with at a large company.

Cons:

* Equity is a joke. Liquidation preferences are always against the employee no matter how early. I'm at my second startup and anytime I hear a coworker talk about taking a pay cut because they got equity I cringe.

* The pay CAN suck, it doesn't have to. It took two tries but at my second startup (current job) I'm paid fairly. Maybe slightly less than I would be making in the same role at a large company but coming here included a promotion I was 6-12 months away from at the previous large company.

Neutral:

* Transparency. Some startups keep everyone in the dark about cash on hand, burn rates, fundrasiing, etc. Do not work for one of those startups.

</comment><comment><USER155> There is no average startup. Everything depends on the competence of the founders, and whether the project sincerely excites you. There is a world of difference between a badly run startup focused on a boring market, versus a well run startup focused on an exciting possibility that might honestly make the world a better place.

Sturgeon's Law says that 90% of everything is crud, and that applies to startups. The good ones are rare. If you get a chance to work at one of the good ones, you should go for it. But can you be sure? Sometimes the founders are talented at selling a false image of what the project will entail.

Startups are a chance to build something entirely original with brilliant and ambitious people. But startups are also dangerous. Limited money means there is little room for mistakes. One bad decision can mean bankruptcy. The potential payoff attracts capital, which in turn attracts scam artists. The unscrupulous often lack the skills needed to succeed, but sometimes they are smart enough to trick investors. Even entrepreneurs who start with a strong moral compass can find that the threat of failure unmoors their ethics from their ambition. Emotions matter. We might hope that those in leadership positions possess strength and resilience, but vanity and fragile egos have sabotaged many of the businesses that I've worked with. Defeat is always a possibility, and not everyone finds healthy ways to deal with the stress.

As an example of what can go wrong, see here:

[https://www.amazon.com/Destroy-Tech-Startup-Easy- Steps/dp/09...](https://www.amazon.com/Destroy-Tech-Startup-Easy- Steps/dp/0998997617/)

</comment><comment><USER156> The main reason I consult to startups over taking a gig with a FAANG type is location. Silicon Valley, SFO, SEA, PDX are all lovely places to visit, but I don't want to live there, pay the mortgage there, or sit in a commute there. Yes I make a lot less than I'd like, but I also have total control over my schedule, get to work on green-field type projects, and get to work from my laptop in my garden.

</comment><comment><USER157> I've thought about the comp issue for a while and came up with a kernel of an idea for a possible solution. Most companies are going to fail which means that most engineers will see their options go to ~$0. The reason VCs make money regardless of this low success rate is that they have a better Beta due to the many concurrent bets they're taking.

It occurs to me that some kind of Startup PEO could be created to help give engineers a favorable Beta too. Startups would hire the PEO by granting them equity and paying the salaries of their team each month. In exchange the PEO would pool the costs for good healthcare and other benefits. They'd also provide placement services to help engineers in their program switch companies whenever they wanted.

Do damn good work and the shared fund will give you upside. You won't be rewarded for picking the winning horse anymore, but instead the quality of your work over years and across several organizations. I'm not going to pretend I have all the incentive management figured out, but I think there's something in there and an ORG like YC might be able to pull it off.

</comment><comment><USER158> I would add that there is some added risk (impossible to quantify) to being an early employee in 2018 as it seems that we are coming to the end of a macro cycle. Therefore the likelihood of a positive outcome (or surviving follow-on rounds) for a start-up in a down environment is lower than if it was earlier in a cycle. The obvious caveat being that if this bull market continues - <USER5> point is moot.

</comment><comment><USER159> I think the talent pool is getting smarter about how much their equity will likely be worth (hint, it's $0). Those who are joining startups now, are either naive to that fact (not good once they discover the data), or they care more about working on the problem than they do the compensation (which is the perfect employee if you can find it - but the cost of living in SF has made that nearly impossible).

So when the company you are going to work for is going to pay you less in cash, likely require you to work harder, and not offer any guarantee that they will be in existence in two years, you are taking a ton more risk for less reward. Financially it does not make sense, so you better be in it because you enjoy the work that much more than a big company.

Bottom line is that startups are going to need to pay more money to attract talent. The secret is out on common shares and what happens with liquidation preferences.

As for how YC could solve this, perhaps they offer an unemployment supplement to those who are laid off. Help talented folks reduce their risk and you will find it easier to recruit.

<comment><USER159> Just another thought, but perhaps YC can explore more options for building startups in secondary markets where the cost of living is more manageable. I know the shop is famously SV-centric, but certain companies may have a better chance at success in markets like Salt Lake City, Austin, Des Moines, Nashville, etc.

Maybe an HQ2 process for YC.

</comment></comment><comment><USER160> Financially I don't think it makes sense to join a startup after the first two dozen employees or so ... unless you get a very special compensation package. The risk-adjusted rate of return on your labor can't compare to the compensation packages at places like Google and Facebook.

Having said that ... your chance at working on an interesting project is higher at a startup if you are the kind of person that can land a spot at Google/Facebook. What I mean is, you'll be a big fish in a small pond. The kind of person that gets buried in some obscure ad-tech team at Google, for example, can pick and choose the projects he works on if he shops around at a lot of startups. Want to work on an open source database? I bet you can find a place that will pay you 100K to do that ... but your stock might be worth nothing in four years ... and if you worked at Google your compensation would be around 160 and your stock would be worth around 750K.

So you really genuinely have to love what you do. And if you want a family you have to be prepared to move out of the Bay Area when you fail ... because you won't have enough money to buy a house the way your peers at Google and Facebook will.

So being at a startup you need to make peace with a lot of very probable outcomes ... moving away from California, possibly starting a family later, etc.

On the positive side, you can choose the area of technology you want to work on. And if you chose well, there's a chance you can parlay that for future returns.

I haven't even touched on the role of purpose and lifestyle ... mainly because I think its simplistic to assume a startup will give you purpose and a big company won't. I think purpose is something you'll have to shop for ... just like you shop for the right project.

</comment><comment><USER161> I think startup is best way to boost your career. This is aimed mostly at junior level roles - it's the fastest way to gain meaningful experience. What a dev experience in one year in a startup is like 5 years in a big corp. For highly experienced/highly paid/execs - I don't see the value in joining a startup unless you're the founder or you need that for motivation.

</comment><comment><USER162> I advise fresh grads or new entrants in the tech job market to avoid startups as their first gig. Instead, starting at a mature company with a strong team team is much more suitable. Learn from the industry experts in your field in a real world setting, develop your chops, and establish yourself as a professional. After that go do whatever feels exciting, which startups certainly are.

</comment><comment><USER163> Pros: \- some startups have a really high concentration of awesome and smart people to work with \- it's exciting to work on something new with a big vision \- you can quickly get experience building a feature (or a whole product) from concept to launch. As an engineer building a feature you can feel more ownership over more aspects of it including the business/marketing/pricing etc. \- I've found at early stage startups it's easier to make friends with your coworkers than a larger company. You tend to do more together, from dinners to socials, and you become a tight group. It's especially nice for people who are from out of the area or recently graduated etc. \- you can work on really cutting edge and innovative things. You might get that at a larger company on a team like Google X but it's not guaranteed \- potential for big upside if your startup does well

Negatives: \- you are subject to the whims of the founders. There is much less oversight over firing, demoting, and general behavior of a founder than the oversight a manager would get in a larger company. \- If you're a woman, you are likely one of the few in the engineering team. There's often bad behavior and it's very difficult to speak up about it without retaliation. I know multiple women who have been fired by YC founders and it's been a tough environment for them to succeed in for multiple reasons. It's also easy for women to end up doing a lot of office housework in addition to engineering in a startup where roles are not as well defined. I think it has gotten easier to at least have some recourse now in the era of me too \- Lower compensation once you factor in public company stock, bonuses, 401ks etc. Base salary might not be too different but larger companies offer a much fuller package of compensation

I could do a deeper dive on the additional factors that deter female engineers out of early stage startups but that would be a topic of its own!

</comment><comment><USER164> Con: half the money. Pro: work remotely and create a lifestyle you enjoy.

Startups that don't allow remote are really missing out on a great differentiator.

</comment><comment><USER165> Working for a early stage startup depends on the stage of life, your financial freedom and your ability to hustle.

Early stage startup requires that you work a lot more than 40 hours of week with a big pay cut compared to what you would get at an established company. This usually is not a problem for individual or couple who don't have kids but very difficult for people with school kids. You have less time and less money -- both have direct impact on how your kids grow up. Is it worth taking the risk? This depends on your values and how you define success in life.

Your roles and responsibilities are not well defined. Even for a software engineer, you have to split your time helping sales, customer support and marketing. I personally find this aspect super exciting but I know a lot of people who don't like and wont thrive in this kind of environment.

Most startups fail. Founders and VCs can screw you -- intentionally or unintentionally. Odds are just stacked against you if you define success by financial gains.

</comment><comment><USER166> I think with most startups, even if they're successful, they don't deliver on the ownership and ROI you would expect for the time you invest.

Several years ago, I joined a Midwestern startup just before the Series A as one of the first ten employees and the first mobile FT dev. I took a pay cut to join and was explicitly promised ownership and real "skin in the game." Nine months later, when they finally devised an options pool, I found I had been granted 0.065% and left immediately. It was like they'd stolen months of my work. Today, they have over two hundred employees and are probably headed to a large equity event.

Another startup I joined raised a lot of money and paid almost market rates to some of the best developers in town. Their tech was some of the best in the city, but they pivoted and lost most of their developers when they didn't achieve product-market fit. They will probably only ever reach a tiny multiple compared to what their investors desired.

</comment><comment><USER167> Have founded a startup, worked at a startup and worked at several fortune 500s and I can say the most interesting thing on my resume for the fortune 500 interviewers is by far the startup experience.

Showing that I can pull my weight, have a sense of leadership, drive, ambition, etc are traits that every employer wants to see but not many employees get to flex.

<comment><USER82> I've heard this from multiple Fortune 500 hiring managers, too. And of course it's doubly true for founders and hiring managers at startup and growth-stage tech companies! Just about every experienced person I know in startup-land thinks that resumés that show only big company experience are a negative hiring filter.

</comment></comment><comment><USER168> Early employees get to decide on a gamble: Do I want equity in return for probably less salary and do I want to get load of influence on the technology in return for a higher expectation that I can deliver it?

A more general difficulty is that a good employee might not want to work for you because they don't know that they are a good fit and plenty of poor employees might say anything they can to convince you to hire them because they like the sound of a startup even though they cannot deliver what's needed.

The missing part of recruitment (from personal experience!) is how to quantify what skills are needed in a startup (multiple hats, big picture, time commitment, understanding of the whole business, not just the tech, pragmatism in spades and the idea that growth is assumed and will need to be managed - ideally with early employees being the Managers) and how can the applicant 'prove' they can meet these?

</comment><comment><USER169> As an H1B visa holder, my number 1 concern when responding to startups is the uncertainty it creates in terms of future H1B extensions, green card application etc. Big cos have large lawyer squads to push me through the paperwork.

Besides that, can YC create some sort of insurance fund to pay employees at early stage startups at market rates? This fund would mostly be fueled by equity that the founders and investors were planning to give the employees. If a startup succeeds, the payout should be able to sustain a few more startups at roughly market pay. Of course, what this would mean is that the employees who opt in given up their chance to "make it big", but also reduce their risk while getting to work at something they are more passionate about and more rewarding compared to whatever they are doing at bigger companies.

</comment><comment><USER170> It seems like net share settlement for employee option exercise would benefit early employees considerably without really costing the issuing company much. For example, if I have options to purchase 100 shares at $1 each and current market value is $2, instead of me having to pay $100 to exercise I can pay in shares, so I instead end up with 50 shares of stock ($200 current value minus $100 to exercise, so I get net $100 in value, $100 / $2 = 50 shares).

This is pretty common in the convertible bond world. When I first learned that employees had to write a check to exercise that sounded crazy to me. I'm curious why net share settlement doesn't seem to really exist in the startup world. Maybe due to the difficulty in determining current market price?

</comment><comment><USER171> This is a big topic with plenty to be said but to synthesize some concrete ways YC can eliminate the cons:

\- Raise equity ownership if possible.

\- Raise the 90 day option exercise period.

\- Be pro-actively transparent about the financial math.

There is a counter argument here that more transparency could lead to morale issues but most mature EEs know that they are rolling a dice and upfront honesty works wonders. The worse thing for the eco-system is the feeling of getting duped.

\- Ruthlessly support EEs in growing their careers.

If your hands are tied w.r.t giving financial upside, at least be a champion for personal growth for EEs. As a founder, you get tons of opportunity to receive mentorship. Send that elevator down, every time you get a chance to. YC can easily provide mentorship for EE cohort, if it can do it for Founders.

</comment><comment><USER172> The biggest irritation I have is that some things are outside of my control. I can make technology better, optimize things and add features, but I can't magically wave a wand and make other areas of our company better. In specific it's hard to learn how to market a product, especially if it's a disruptive technology. Also frustrating is that I have been here before and seen scenarios where 3 years later someone else is able to bring your passion project to market after you've given up after being told "that would never work" by people who are now using said product.

I truly believe there are tons of already built products out there that get turned offline because they never were marketed correctly.

</comment><comment><USER173> When I hear startup, I think 80+ hour weeks with low pay and a very very small chance of being compensated for that. If there is any way to compensate ruining your health financially.

Basically, it's all cons. Unless you like playing the lottery and have no life.

</comment><comment><USER174> Startups offer pretty good compensation for folks who lack the ability to pass a FAANG interview. Folks lacking traditional CS backgrounds but with an actually high level of skill for writing software, specifically web software, tend to be over-represented in this group.

A lot of the downsides of startups people mentioned here are 100% true. If you didn't study CS in college though, consider the hours of reading Cracking the Coding Interview you'd have to do and divide those hours by your FAANG comp, and you might come out with an equal or slightly higher hourly rate going the startup route. And your interview process might be a lot less stressful.

</comment><comment><USER175> I've worked at multiple startups and feel it isn't worth the effort. The execs always make out and everyone else doesn't make it worth their effort. The compensation will be better when working at established companies.

</comment><comment><USER176> Startups pay pennies in both cash and equities and are usually run by morons working on dumb "problems" they sold to even dumber investors. Good luck solving this. (If you're really interested check out Andrew Mason's work on equity.)

</comment><comment><USER177> Pros: Work with cutting-edge tools and languages. Work with people who basically know their shit. You're given much more responsibility, hence control, upfront. Process isn't ossified. Flexible hours.

Cons: Hope you like your coworkers because you'll be working cheek-by-jowl with them in someone's coworking space or crammed in a garage or something. They will try to pay you partially or entirely in Bison dollars (equity). You are assumed to have flexible hours so I hope your evenings and weekends are free. A company without solid footing can go tits up once the VC funding dries up, sending you on an early job search.

</comment><comment><USER20> I have a [https://www.workatastartup.com/](https://www.workatastartup.com/) question:

What happens, if you work for a YC company and want to work at another one? Do they still see your looking?

<comment><AUTHOR> At the moment, yes - and we know this is a huge issue. I don't recommend using it if you are working at a YC company at the moment. We're fixing this in the next week.

</comment></comment><comment><USER178> >> Ask HN: Pros and cons of working at a startup in 2018?

i dont see how they are different from 2017, 2016 ... etc.

There is nothing special about start ups its just another business so consider it like one.

I'll distill it down to simple level. Working for a startup or any company is like working for a pizza joint. Consider there are 3 pizza joints in town and you know how to make pizza sauce. Which pizza joint would you choose? Why?

\- The one that pays more \- The one that has better hours \- The one that has better work environment/culture \- The one with the owner that is not an asshole \- The one that has a better potential for personal growth

plus whatever else you think is important.

</comment><comment><USER179> There is a lot of talk in the comments about amount/value of startup equity vs FAANG companies, but having founded and worked with numerous startups, there seems to be an overall lack of transparency when it comes to equity. It's not just how much (percentage), but how are you even measuring that percentage? Fully-diluted shares or current outstanding? What are the liquidity preferences of the VCs? 1x, 2x, 3x? Beyond the rare chance of the company even exiting, there are so many terms that most engineers are completely oblivious to, and the startups are usually not there to inform you.

</comment><comment><USER180> Pros: for even the worst startup there are fewer useless people, bureaucrats and insane witch hunt types than there are in a large business. You learn more if you're a go-getter and your work can really make a difference.

Cons: your returns are way more volatile -CAPM adjusted, I'm pretty sure it's not worth it, and if you're trying to learn things and need formal mentoring rather than 'self serve' you won't get it.

I can't stand bureaucracy and non-contributors with power over my life, so I prefer small startups.

</comment><comment><USER181> Joining a startup in 2018 is probably one of the most stupid things one can do. The market is certainly oversatisfied at this point, so the risks increase, as well as the average bullshit from founders and investors one has to bear with (e.g. see Theranos). Sure, YC will continue as long as you can. I understand, you also just want to make money. But for an engineer it is much smarter now to join the biggest possible company, take all the benefits, build a small nest egg, and be active about switiching jobs every 2-5 years.

</comment><comment><USER182> The only reason to join a startup is if you know the founders and you think working with them would be fun enough that you're willing to give up hundreds of thousands of dollars to do it.

</comment><comment><USER183> Currently a dev at a pre-Series A startup.

Pros:

\- both the freedom AND responsibility to build things that'll directly translate into increased growth/profits, or the opposite in the case of failure

\- close-knit dev team, and in general everyone is chill, i.e company culture is great so far

Cons:

\- my salary compensation is pretty average so I am hoping for an eventual big pay-out, but it's hard to gauge what the payout amount of my shares will be.. maybe this is just due to my ignorance/lack-of-experience (are there tools/calculations to figure this kind of stuff out?)

<comment><AUTHOR> Here are a couple of articles that might help with regards to calculating your equity payout: [https://codingvc.com/valuing-employee- options](https://codingvc.com/valuing-employee-options) [https://medium.com/@jamesseely/eshares-option-value- calculat...](https://medium.com/@jamesseely/eshares-option-value-calculator- edc20c211cbf)

I'd also really encourage you to talk to the founders of the company about this and ask them to walk you through _their_ model for how much you should value your equity.

Our advice to founders is to walk every employee through a model that estimates the value of their options under different scenarios.

<comment><USER183> Really appreciate the links and feedback, thank you.

</comment></comment></comment><comment><USER184> There might be potential bias here - people who work at intense startups probably don't have the work-life balance to browse HN and comment on here right now. /semi-sarcasm

</comment><comment><USER185> I would distill this as follows. Limiting to 1 pro and con to respect your and my time.

 __Pros \- You develop the skill of approaching things more holistically as you are forced to see things from end to end perspective.

 __Cons: \- As an early employee (#1 to 5) You are taking the SAME amount of risk as the founders but being compensated quite differently. The exception to this is where founders have invested their own money into the startup. But thats rare in SV style startups.

</comment><comment><USER186> Con: Aggressive copy+pasting of giant tech companies. I get the sense that start ups are now just market-fit validators who assume all the risk without the ability to reap all of the benefits.

Snapchat + Spotify comes to mind. Unless your company has to make heavy investments in operations infrastructure (think Airbnb/Uber) go in with the mindset that you will definitely be competing against FAA(N)G (not so much Netflix), as soon as your product gets some market-fit.

</comment><comment><USER187> So much good input here, and as a person outside of SV I am sad for those that chase the brass ring without realizing it is on someone else's finger. I agree that if you are hiring early employees at below market rate because you cant pay market rate then you shouldn't be hiring employees. But that's worthless input because there will always be a person willing to take the low paying job thinking it will pay off. For shame and oh well.

</comment><comment><USER188> Depends on your age, here is why: I've been in startup most of my 20s and early 30s. The amount of learning, growth, potential and responsibility is amazing. you simply will not have it elsewhere. you will have tons of impact. when i got married and had kids i couldn't take these risks anymore, i needed a stable working place with good WLB. now i'm making more money, using the experience i had in startups working for a FAANG company.

</comment><comment><USER189> All this comp talk is a little silly imho. I literally just quit a job (today) at a big boring company where I brought home north of 300k / year to join a startup making less.

Why? Because doing something interesting is more important than making a ton of money. Because creating something is better than tending someone else's garden.

Seriously though, do what you want to. Go make some money. It may get old though, and then you'll be back. Impact has value

</comment><comment><USER190> I've worked at a couple of the top tech companies and have been co-founder of a startup with a successful exit.

Pros:

* Low stress. I find the most stressful thing at work is trying to figure out what my boss wants. (Small) Startups are easy -- just stay alive and find product market fit.

* Power/control. Things are small, so it's easy to know a large part of the codebase/product. This allows one to quickly make changes to support the business.

Cons:

* Pay. This has been well documented in this thread.

</comment><comment><USER191> Here's one that may have been mentioned, but wow, there are a lot of comments.

Founders: get over yourselves. I understand that you have to have a lot of faith in yourself to do what you're doing.

At the very least, try to have some humility, and maybe understand that what you're doing may not be world-changing after all.

How many good employees were passed over just because they didn't appreciate your "vision"? Furthermore, why should anyone care?

</comment><comment><USER192> This may well get buried, but I think it's worth pointing out that all the big employers consistently mentioned in this thread once started out as, well, startups. Yes, getting there is a near improbability, and most companies never get there, but the ones that did got there by virtue of people believing in the mission (whatever and however you want that to mean) being important enough to make tradeoffs for.

</comment><comment><USER193> I dunno how possible this is legally, but one thing YC could do is create a pool of equity of all the startups in a batch which employees could be granted options in.

Investors diversify, and founders own a disproportionate share of their companies (because they take the largest risks, but even so), but early employees are locked in for years with no chance to diversify.

So a shared pool would let early employees diversify their (time) investment.

</comment><comment><USER194> Speaking about a few cons from an H1B perspective from countries like India.

1\. The nature of H1B Visa makes it inherent for people to not take the risk of working at a startup. Part of the problem is the short time between layoffs and finding another job. H1b's may have very little time[1] to search for a job after a layoff. A startup could make it easier for them. Short of a layoffs due to financial reasons, startups could have a decent protocol for making the transition smoother. If the engineer is not a good fit, unless he is terrible, he can work a few months more until he finds another position. A few weeks notice as a standard is very little and keeps good engineers away from startups.

2\. Some startups process Green Cards(GC) only 1 year into employment as a part of their "policy". This is partly understandable as GC processing is a bit costly. But the cost is not that much(<10,000 based on my experience)[2, 3]. So this 1 year hard stop is non-sensical from a monetary standpoint(especially with developer salaries running in 80-150K over many years)[4]. It also creates a sense that GC is being used as a carrot and stick approach to make people stay, this is morally questionable because for the H1B's have a lot at stake (pack bag and go to india if you don't find a job fast enough, disrupting family and personal lives). A better idea would be to process it immediately as Google/FB etc do. This gives a lot of people confidence to work and even if it does not work out its not that big a deal.

PS I can vouch that a GC is more important than 10K$ here or there in the long run.

[1]At the moment a one time 90 days grace is provided thanks to a 2017 USCIS rule(which is plenty), but it can be only used once per H1b VISA. i.e. if you use that up once you can't use it again.

[2] [http://www.immi-usa.com/eb2-green-card-cost/](http://www.immi- usa.com/eb2-green-card-cost/) [3] [http://www.immi-usa.com/immigration- attorney-fees/](http://www.immi-usa.com/immigration-attorney-fees/) [4] [https://stackoverflow.com/jobs/salary/results?l=San+Francisc...](https://stackoverflow.com/jobs/salary/results?l=San+Francisco%2c+CA%2c+United+States&ed=1&ex=5&ff=1&dr%5B0%5D=BackendDeveloper&tl%5B0%5D=)

<comment><AUTHOR> That's an excellent point about the terrible H1B grace period policy. A lot of good companies have an informal policy about that, but I agree it needs to be more widespread. Do you know if any companies offer that policy publicly?

</comment></comment><comment><USER195> There are entire categories at work you can't do at a startup. And since you might die tomorrow, a lot of what you build is a fairly throwaway.

</comment><comment><USER134> What is a startup anyway? It can be anything between a 2 people business without a cent to a company with 500 employees that raised 300 million dollars. Even Airbnb is considered a startup in the media. When talking about these things it's very important to distinguish what stage the startup is in because the experience varies wildly. A pre-seed startup is not the same as a round-X startup.

<comment><USER134> I don't think working for a big, well funded startup will be that much different than a big corp in terms of work life balance, stability etc. You have mass firings in Microsoft too.

</comment></comment><comment><USER110> One reason I would never again join a smaller startup: Most of them refuse to offer equity refreshers. Even after a significant funding raise, I've been at startups who simply do not offer any more equity beyond the initial grant.

Compare that to any competitive Big Co or startup, such as Facebook, Google, and Airbnb. All of them offer annual equity refreshers, and that equity is _significant_.

</comment><comment><USER192> One thing I think most startups can do well to remember is that engineers are not the only hires a company needs to make and that modern tech companies very rarely fail due to technology factors. I'm curious why there isn't a greater emphasis placed on non-technical roles? My only conjecture is inherent bias, but I could well be biased myself in throwing that out there.

</comment><comment><USER196> Having worked at both a Fortune 500 software company, and a small valley startup with good funding, I can speak to this issue.

On the matter of working at a startup:

PROS:

\- You have a much larger impact on the product. Often times you may be working solo on a very significant part of the product. If you enjoy this feeling of autonomy, this is a major plus.

I list this as a major PLUS because at the large company I worked for, I felt like a "cog in the wheel". I could easily be replaced. Despite doing good work, I was just one of many who could do the same work. I could only "own" a small portion of the application.

\- You have a chance to make money on the exit. Assuming you got stock options as part of your hiring agreement.

CONS:

\- Jack of all trades, master of none.

You will be asked to wear multiple hats. In my case that has meant I was hired to do one X, but actually ended up doing Y, and Z in addition to some X. Specifically, that meant learning new programming languages, new domains, etc.

I list this as a major CON. While it can be very good to learn new languages / domains, I think you should do this on your own "track". Learning a new programing language on the job, especially at a startup, can be quite stressful when you're expected to also PRODUCE.

On the other hand, learning it on the job can give you some of the most practical experience in the shortest amount of time. So this one can be a double edged sword. In general, if you are YOUNG in your career, this is GOOD. If you are middle, to late in your career, avoid a startup for this reason. (Don't stop learning. Rather, find a mastery of one domain, and make that your day job while keeping up your abilities in other areas).

\- On all the time. Your coworkers will be working weekends. That can mean that when you aren't working, you feel like you should be.

\- You'll never feel like you can take a vacation. Take them anyways. But you will feel guilty, and like you're asking a lot to take a week here or there. At a big company, this is "PTO" and you either have the days available, or you don't. Take the time if you have it, because you have a large team that can cover for you.

\- You'll never feel like you can leave, as the business hugely depends on you.

</comment><comment><USER197> I did a PhD, so by the end of my 20's, my net worth was approximately zero. If I rolled the dice on a startup, there's a very good chance I'd hit my mid-30's and be in the same place I was financially at 20. Instead, I opted for FANG where I could accumulate as much in a few years as my parents did over their careers.

</comment><comment> ryan-allen My two cents is that all the low hanging fruit is gone and start ups are now 'mainstream', 10 years ago you could make a nice looking TODO list and as long as it had shareable lists and deadlines you could flip it for a few million.

I think the kind of work that is required to build something is much harder. I'm probably wrong though.

</comment><comment><USER198> To me, the cons of working at a startup in SV are these:

\- lower salary than bigger cos

\- mostly smaller/less challenging projects

\- low chances of ever liquidating RSUs and if you do, the value will more likely be low with some very rare exceptions

\- it's harder (or impossible) to achieve a decent lifestyle living in SF/Bay area with a startup salary

\- lack of diversity in most small startup teams

</comment><comment><USER199> Here's some problems YC might be able to fix.

Equity Liquidity -- I can't wait 10 years to get liquidity on options. YC could offer to purchase some employee equity when the company raises additional rounds.

Employee Branding -- FANG on a resume looks better than working at a startup. That really helps when it is time to look for a new job.

</comment><comment><USER200> It is strange nobody here mentioned the crypto (public blockchains) space. As a pro early employees have liquidity and much more money in average than with a typical startup. Not saying the space is not full of scammers and void promises but good projects pay well and have more incentives attached.

</comment><comment><USER135> Just a quick aside: I'm in biotech/medtech and hardware engineering. A lot of the comments here are about _software_ engineering in SV. Here in biotech-land the average salary, even in the Bay, is about $80k.

Granted, we don't have as many start-ups as the FDA puts a hell of a damper on things.

</comment><comment><USER201> The only reason that makes sense is to break into an industry without experience, or to move up the career ladder faster. Startups are hungry and will take folks who couldn't even get interviews at big tech. And if you make your bones, boom, you're in.

</comment><comment><USER202> One nice thing about startups / small companies is they can be flexible with work hours.

</comment><comment><USER203> Hey Jared. I think the most noticeable appeal a startup has is equity. The rules of equity are skirted, obscure and the level of trust is low.

Stratups cant compete on compensation to big-co but can compete on equity compensation and its just not competitive.

</comment><comment><USER204> _And where there are cons, what would fix them?_

My understanding is insurance and benefits are a weak area. The internet ate my really long comment. Suffice it to say, if you haven't already, I will suggest you (YC) talk with an Aflac agent.

<comment><AUTHOR> Do you have any specifics on what issues you have seen?

<comment><USER81> Things I've seen: * No 401ks (which means I'm paying extra in taxes). * Crappy health benefits (prescriptions costing 4x what they do under other plans or high deductible plans). * No commuter benefits/pre-tax Clipper cards. * No tuition reimbursement or education budget, the assumption being that just working is supposed to be the whole of the employee's career advancement. * No parental leave. * No childcare support (why this isn't rolled into coworking spaces I have no idea.) * No HR in case of harassment, politics or personal vendettas.

</comment></comment></comment><comment><USER205> There seem to be two sides in this thread - "Fix it for early stage employees" from the OP, feels like a long term map towards less reward for capital and more for labour.

The grassroots side seems to be "give us more comp or we go work for Google" \- which is roughly the same map as above but from a different direction.

However I suspect the chances of landing a gig like that are similar to landing early employee at a 50Mil exit. Or perhaps I need to go work in SF, or charge more in London...

What seems to be missing here is not a path to a new socialism (not a bad thing TBH) but that the risk / reward ratio has shifted - usually to justify large rewards there needs to be concomitant risk. But it seems to me that product market fit is being found earlier with less capital cost. And then the sheer scale of the market when you do find a fit is returning a reward out of all proportion to the investment at risk. From Whatsapp to Trello, a small team can find product market fit and go global.

In which case the reward for capital should come down in a sane market. The risk is not as big as it used to be, so the price must come down.

That seems a good thing ?

</comment><comment><USER206> Pros: More Freedom More Earnings Potential Express Way Up the Corporate Ladder More Say in Business Decisions More Say in Work Culture

Cons: More Pressure More Work Less Job Security Possibly Little or No Starting Pay

</comment><comment><USER207> Startup only as a contractor otherwise you'll get squeezed dry.

</comment><comment><USER208> It really depends on the startup. There are some crazy awesome situations, and some crazy not awesome situations. It is hard to generalize across all startups.

</comment><comment><USER209> As someone who has started and worked as an early employee at several startups in the bay area and has spent a large amount of time interviewing and evaluating offers:

Con 1: Compensation

Equity is not worth it. Early employees bare the same risk as founders, work just as hard, and have an order of magnitude (or two) less upside. The chances are that even a series A funded startup will go bankrupt and the equity is useless. Seed funded startups are even worse in the sense that the risk is way higher for just slightly more equity.

Base compensation is too low. Salaries at usually barely livable in the bay area and leave no room for savings. This has two major problems:

\- First, its hard to support mortgages or families. This creates a biased hiring process that favors those already well-off or very young (and likely inexperienced).

\- Secondly if the startup fails (the likely scenario), the chances are the employee's savings are non-existent. They'd more likely opt for a cushier job instead of building on their experience at another startup.

SOLUTIONS:

1) Early employees need a higher salary. No living wages. No forcing people on a ramen diet. I'm talking $130-$180k for engineers at the _seed_ stage (in Silicon Valley), PLUS healthcare. Other roles should be proportionately similar based on market rates. This means either seed rounds need to be larger, or bridge rounds become much more common. I think the latter makes more sense; if the startup has some traction, but not enough to go for a series A, then the founders can raise a little more. If the startup doesn't have traction and burned through its seed, it should fizzle out sooner and liberate the team to do other things.

2) WAY more equity for early employees.

* 25% - founding team (first 5-10 employees)

* 25% - all future employees

* 50% - <USER6>

* Investors eat from everyone's shares proportionately.

A win for the founders should be a win for the early team. There should be no scenario where the early team doesn't benefit from an exit but the founders do. The founders succeeded _because_ of the team.

3) No bullshit vesting schedules. At worst, stick with the standard 4 years, 25% a year, 1 year cliff. No 10-10-20-30-30 5-year split nonsense that only favors employers and force people to stick around longer than is healthy. And add refreshers that vest. 10-20% of their annual comp. Salary bumps can also work as a substitute. Incremental rewards are important.

4) Not 100% on this, but common stock for everyone. No class A shares -- win votes by convincing the team you're right and not being a douchebag.

</comment><comment><USER210> Con: Lack of mentorship because everyone is so busy and manpower is low.

Pro: Have to chance to decide what to do if the hierarchy hasn't been built up yet.

</comment><comment><USER211> Startups should allow employees to take RSUs with them when they leave the company. Otherwise it is deceitful to refer to it as compensation.

</comment><comment><USER212> Should we expect the balance to shift back in a few years where salaries+RSUs go down and startup compensations become competitive again?

</comment><comment><USER213> I am working at Udacity right now, it feels good.

</comment><comment><USER214> Seems to me like today's engineer #1 of a startup valued at < $10M should be getting 5% equity, not the 1% of yesteryear.

</comment><comment><USER215> If you're young: yes try

If you can be a cofounder: yes go on

Everything else: no they are bad employers

</comment><comment><USER216> I guess as long as you don't care about the $ might be fun

</comment><comment><USER217> What are some well paying non-startups that are not FAANG?

</comment><comment><USER218> How does this differ from triplebyte?

<comment><AUTHOR> Here is an earlier sub-thread on that: [https://news.ycombinator.com/item?id=15917671](https://news.ycombinator.com/item?id=15917671)

</comment></comment><comment><USER219> Pros: \- Level of responsibility and opportunity you can get at an early stage startup WAY outstrips what an established company can typically offer you, especially if you are early career. You might be able to get more money at FAANGM, but your career will not grow as fast. \- Because of the above you get to learn skills that generalize (eg. how to deliver value with a product, how to negotiate a partnership, how to make an impact on a P&L). I've seen many folks come in from Big Co. who only know things that are specific to that company. The reason for this is that Big Co. has already figured out how work needs to get done to achieve their business objectives, and everyone who works there gets handed that API. I've seen folks come out of large companies and realize that they hadn't learned fundamental skills around how to generate value. That they had mostly built experience in how to operate in the environment they were in, but didn't translate outside. In startups you have to learn to generate value or the company dies. \- You get to make an asymmetric bet. If you're early career your opportunity cost is low but your capture could be high if it works out. \- The experience of working on an early stage team really trying to DO something is unparalleled. You won't find anything like it at Big Co. (unless you're lucky enough to get involved in a new product launch, which does happen).

Cons: \- You only get one bet at a time. This is as opposed to investors who get a portfolio. But your stake is usually smaller than theirs. So it's REALLY hard to hedge your risk. This is not a worry in your early career, since your alternatives are not great. But it becomes a problem later on. If you don't have personal liquidity, you really can't afford this by your mid-thirties. \- Returns are really skewed right now towards founders and investors (who dominate the cap table), and then the first "adult" executives brought in (who may not get the largest equity stakes but tend to be bonused out in cash even in the case of a fire sale, when most employees get nothing). IMO this is why startup recruiting is so hard right now. It's clear to anyone looking closely that the returns are so heavily founder/investor skewed that it makes no sense to join a company at an early stage if you have any other options.

IMO the biggest problem to fix is the lopsided cap tables. Without this it's really hard to attract talent. For most people who are startup focused, the competition is not a high paying job at FAANGM, but them starting their own thing. Here's a possible solution: Companies could start at their inception with 3 classes of shares instead of 2- preferred (for investors), 10x voting common (for founders), and 1x voting common (for employees). You could then allocate a MUCH flatter cap table so that you can make meaningful equity offers to attract folks to the early team who would otherwise have chosen to found a company themselves, but you don't run into the control issues you would otherwise run into due to diluting the founders stakes. There are certainly other solutions, but solving this problem is what I would advocate for- ie. make it more rational for someone to choose to work for your company as opposed to starting their own.

</comment><comment><USER220> Just a few cons....

The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp.

Equity grants for early hires haven't kept up well with both the afore mentioned industry comp pressure and the drastically increased time till liquidity. An early hire employee will be in the soup nearly as long as the founders but with significantly less upside.

That said, working at a startup can be great fun. It's also a fine opportunity to learn on somebody else's dime.

<comment><USER221> >The big players have drastically pushed up developer comp. The "maybe" money that might come from a best-case startup exit isn't holding up well against the RSUs of the big players. I have friends pushing total comp north of 400K / year at the usual suspect companies. Over a five-year-span-till-liquidity your "maybe" money is competing against a near-guaranteed $2M in comp.

I can second this. But it's not just the money though. One big thing for me is lack of actual vacation/sick time accrual in favor of this "unlimited PTO" nonsense. It leads to a culture where no one ever feels comfortable taking vacation or sick time (the obvious goal of the policy), and work life balance is a nightmare as a result.

<comment><USER222> I work for a non-startup/non-tech company with unlimited PTO and people here take advantage of that all the time.

Unlimited PTO doesn't lead to work-balance nightmares; it's the result of management discouraging employees from taking breaks.

<comment><USER223> I've worked at two companies with "unlimited PTO" and it also worked as stated.

</comment></comment></comment></comment><comment><USER224> Startups in my opinion are almost never a good deal for folks who have the option to join a big successful company. My points will be directed at folks who can get a job at a big company easily but are lured by the great things they've heard about startups. Specifically I'll target the issue of compensation.

Startups, in my experience have very shady predatory compensation strategies. Along with the VCs that fund them, startups target people fresh from college, selling them the "each stock COULD be worth X, so you could be worth Y" story. They also target people who have spent their entire career at startups since this fairy tale works on them too. I have worked at both startups and big companies and my compensation at bigger companies has been so much better. People working at startups don't believe me when I tell them how much I make. Past me would not believe present me either. I am not talking about a 10% or 20% or even 50% increase in compensation. My pay is 4.2x of what it used to be and I know people who have had similar experiences. It's not like I was being paid peanuts at the startup I was at either. The pay at big companies is just much much better. It's easy to underestimate the power of performance evaluation driven stock refreshers and the sheer increase in the stock value that some of the big companies have had. Here are some things one should consider compensation wise when working at a startup: * You are essentially getting a lottery ticket with your stock options. How do you value this lottery ticket? Don't buy the stories the founders sell you on how this is a gazillion dollar market and even getting a faction of it would make FooBar a trillion dollar company. A simple but still optimistic method - just use the VC valuation. They have way more information and experience than you do and if they value it at X, it's at best valued at X. So if your tartup decides to give you 0.25% of X then you're stock is worth 0.0025X at best. You'll be surprised how little your options are worth if you use this method. * But even that valuation is optimistic. If you leave the company before they go public (or hit another liquidity event) you either leave with your existing options and pay a tax bill on something that may be worth nothing OR you leave with nothing. Now some startups let you claim your options for up to 9-10 years after you leave, but the typical ones give you a period of about 3 months - <USER7> you're forced to make this decision. The irony is that if your startup has actually done well, the tax bill might be too big for you to pay and you have no option but to stick around or leave with nothing. I've known cases of people who have poured their heart and soul into a startup, got burnt out and then were laid off and had to leave with nothing. Consider how long it takes the successful startups to go public these days and add a risk factor to your valuation based on that. * Okay, so you're rich enough to afford the tax bill on your risky options when you leave - you might still get screwed. Guess whose shares are getting diluted the most during the next round of funding? Ex-employees have no say in the company and the company has little to no loyalty towards them. A company could easily do something shady like raise money, dilute current and ex-employees, but give all the existing employees new shares to make up for the dilution.

For a sample of some of the disingenuous "I know what you need better than you do" kind of marketing that VCs do to help maintain the status quo, take a look at [https://a16z.com/2016/06/23/options- timing/](https://a16z.com/2016/06/23/options-timing/). These folks are not your friends.

Startup founders get the vast share of the equity and even the 3rd or 4th employee gets a tiny fraction, while having to do the same amount of work. So if you still want to work at a startup, my advice would be to either be a founder (hopefully not one that continues the cycle of screwing over other employees) or at the very least come from a big company. Founders and VCs know that big company employees make a lot of money and they wouldn't just give up on their good compensation package for the "each stock could be worth X" story. Hence they compensate them much better than their average employee that doesn't know the market. Folks coming from bigger companies can also afford the tax bill associated with early exercise of options or exercise of options when leaving a company. Further consider working at startups where they let employees buy their options years after leaving. There are also successful startups that straight up give RSUs.

The well known article by Dan Luu at [http://danluu.com/startup- tradeoffs/](http://danluu.com/startup-tradeoffs/) addresses some of the other points raised when discussing the relative meritcs of startups VS big companies.

</comment><comment><USER225> I have found that working for startups, that unless you're the team lead or the only dev, there is usually very little room for growth or advancement. The annual pay increases are terrible and the employee turnover rate is usually quite high.

These pros/cons are based of my own experiences (I'm based in the UK).

The pros: \- Come into work whenever you like (within reason) \- Working with latest tech \- company culture is usually great \- Your team are usually very motivated and passionate about what they do \- The challenges you usually face are exciting and interesting \- Being present when the company meets new milestones is very satisfying

The cons: \- Sometimes the features requested doesn't have enough information. This leads to the development team to either chase management for more information or make do with the information thats there. Which then leads to complaints or feedback after the work has completed (which could've been outlined before the work started) \- Management usually want to know the fastest way to do a feature and then claim to allocate time to deal with the technical debt later (it usually never happens) \- Management also doesn't prioritize the stabiliy of the application which in turn can lead to more issues and bugs along the way. \- Deadlines get shorter and stricter as the company gains momentum. As a result you're expected to do more overtime or work later if you fall behind. There is usually no room for error here. \- Work/life balance is not so great \- Doesn't provide great benefits such as pensions/healthcare/dental \- No room for advancement

I don't think its too bad working in a startup, but once I became employed to a (self-funded) medium sized company, their culture seemed significally better. They provided all the pros outlined above and had fewer cons. Work/Life balance was much better, allowing us to work from home or flexibility to do so if we needed to be home for a delivery or take the car to the garage for example.

Also, its more relaxed. While there were deadlines, we're also not encouraged to rush anything, we were the ones who dictated how long it takes to add a feature and set our own deadlines based on the complexity of the feature. We also had the ability to push back the roadmap accordingly if necessary in order to make sure something is done right. The reason for this is that bugs or issues can really damage the companies repuation and so its pretty important we take our time and do all the due-diligence required before our releases.

I suspect working for a self-funded company is better because the clients/customers are already there or on-boarded. There is no/little pressure from the shareholders or investors to get things done quickly. I would imagine that a startup has a lot to prove and so needs to impress in order to get more funding.

Note that these are my personal experiences, I've only worked for 4 startups but I've had very similar experiences with all of them. If Startups are able to at least alieviate all of the cons I've outlined above then I would be happy.

</comment><comment><USER226> Agree with many others here that _talented_ early startup employees don't tend to make enough money to offset the opportunity cost of FAANG-like total comp. That point has been argued in the thread above more eloquently than I could.

If you accept that compensation is the issue, and want to fix it, and get our best and brightest back into startups, that has to be corrected somehow. I can only think of 4 sources:

A) Pay them more, shortening operating runway B) Make their equity worth more, by making founders' worth less C) Make their equity worth more, by making startup companies worth more D) Make their equity worth more, by making investors' worth less

I'm going to argue as a current startup executive that (A) is already efficiently calibrated by the market and has yielded the current balance, so not likely to find more ground there.

The current supply/demand of founders would suggest (B) is not likely to make a dent either. If it could, that would suggest that there is an oversupply of (qualified) founders, such that we could do with fewer. I think most VCs would disagree with that world view, as most of them take 100s of meetings to do a single deal, and generally consider capital deployment to be their primary operating limitation.

If someone has serious ideas for (C) that can make a difference at scale, I think they would do well to share them here.

That leaves us with (D). Anybody who has negotiated a term sheet will tell you that this won't be easy. But I submit a humble suggestion for a cultural shift that I think could make a big difference here: make liquidation preferences unfashionable.

My reasoning is simple: in a modest outcome, the effect of the preference is much greater on employees (who lose out on their true equity value) than on investors. Most VCs have already hedged the downside risk within a given fund by diversifying over 10-20 other deals, and most of the time, at least one or two of them (if the fund is any good--and they won't be around long if not) will net a > 10x return. The value of the preference as downside protection is therefore quite limited.

On the flip side, it is a huge impact for an early employee, who might see an extra 50%+ dilution in a modest exit after the prefs get paid out. And let's face it... these modest exits are far more common than the unicorns.

Doing this would also free up better price competition among non-institutional investors who are happy to have non-controlling participation, especially in later growth rounds, and so could actually make the sector more attractive to a wider investor base.

This wouldn't produce an overnight change, but could result in more early employees having positive "EV" stories, which could eventually shift perception.

</comment><comment><USER227> ok

</comment><comment><USER228> This may just be a personal viewpoint but I no longer see the distinction between a startup and another company, not when I'm the senior developer coming in to head up the team. In London in particular it feels more like a marketing term to attract more naïve talent, which isn't necessarily a bad thing (corporate/enterprise still has a pretty uncharitable perception, for better or worse). You can find yourself working for a startup that has existed for four or five years, hasn't properly launched their product or found their place in the market, and on some level has stagnated.

I've no experience with the tech world in the US (or SF really), neither YC, so maybe the conditions there are different, but my vague thoughts are this (and these are usually the things I assess when I'm interviewing with any company, it's rare that everything is checked so it becomes a matter of trade- offs):

\- I'm more passionate about building out a nascent product that really touches me than I am about working for a startup. There is vision, it aligns with my values, I'm confident I can help make it happen and I want to be part of it. That it happens to be the idea of a startup isn't relevant because I'm looking for fulfilment, not a cash-out. Appealing to making my day-to-day comfortable and productive, while also respecting my worth, is a good way to get me on board with that.

\- With that in mind, coming in with the pitch that I have to sacrifice a fair bit in order to make this dream come true - low salary, higher equity, 10+ hour workdays/no sustainable pace - isn't going to work unless it's an intensely special idea. That means respecting boundaries about when work happens and when work doesn't, with the reasonable expectation that sometimes there might be a bit of flexibility.

\- Speaking of boundaries. Fucking stop it with the mandatory fun. I love a beer with the crew as much as anyone but turning every single potential social gathering into a bacchanalian fuck-fest or making alcohol as available as possible inside the office just isn't motivating. Give me a reason to leave the place and enjoy the outside world and socialise naturally, and think of more exciting things than straight up parties if you want to do company get- togethers.

\- If not fully remote, then at least temporarily remote. This is mutually beneficial if the startup is mature about it, because it means you can enjoy a change of scenery without going totally off the grid.

\- Respecting experience. If I pass muster as the senior/experienced programmer you need then I expect that you're paying me because you're interested in my input, not to micromanage me. Let me bring something to the table.

I actually think you're far more likely to fulfil these wishes at many startups, and massive corporate outfits may be slower to respond to that kind of thing. But then it raises the important question: if you're moving the needle in favour of employees, how do you allow them to influence these cultural concerns?

</comment><comment><USER229> I both founded a YC backed startup and I worked at another YC backed startup and had a great experience there. Having said that, I can't say I would ever recommend a new graduate taking an offer at a startup (at least an early stage one) over an offer at a BigCo of some sort.

A BigCo will help them get hired for the rest of their career. Anecdotally, I learned and accomplished far more at startups than at Google, but anytime someone sees my resume "Google" is what they notice first and are impressed by. This sucks because early employees at a startup have so many opportunities to learn and accomplish way more than a typical BigCo employee, but recruiters can't easily filter on this like they can "Oh this engineer worked at Google - they must be good!" As a result, working at a BigCo will likely help their career more than working at a startup.

Pay and filtering out good vs bad offers is another concern. Most engineers are unfamiliar with startups, equity, preferences, cap tables, and everything else. We on HN are probably more knowledgeable, but I founded a startup and still don't fully understand it all so I can't imagine how someone completely unfamiliar with startups could possibly evaluate an offer. This is made worse by the fact that it feels like startups for the past decade have taken advantage of this ignorance and screwed over many early employees with poor offers and a fake promise of wealth when the company is a mega-success. Many others have made this point in this thread already so I won't get into the details, but the TL;DR is that employees need to be treated as vital investors in the business and as people you want to help succeed.

A third concern is development and training. At a startup you are expected to already have a pretty solid knowledge base when joining; you typically need to know how web apps work, some of the stack the company uses, etc. That isn't to say you won't learn a lot at a startup, but this is typically done in a "sink or swim" manner where you have to have some foundational knowledge to avoid drowning. At a BigCo this isn't always the case, and many new grads will be hired with less domain specific knowledge and are given an opportunity to learn and grow over the first year. Now I realize not all startups (especially early stage ones) can afford to hire employees who won't be contributing in the immediate future, so I'm not sure how you fix this (maybe a company like Triple Byte could find promising employees who lack some specific knowledge and give a crash course before sending them off to startups to interview?), but if you can get hired at a BigCo you can basically get paid to learn these skills which is a much more enticing offer.

A fourth concern I've heard from people less familiar with startups is concern that the startup will just die at any minute leaving them jobless and in a tight situation. This mostly stems from founders not sharing important information like cash reserves, burn rate, runway, etc, so I think the general fix is to encourage founders to provide more clarity around these things. The problem is this is hard because no founder wants to admit they are failing or that the company may not be alive in 3 months. They might raise money or turn things around and they don't want their best employees to leave, but by not saying anything they risk getting into a situation where employees need to be suddenly let go and a single story like this can scare away many potential candidates. This just isn't as much of a risk (or it is perceived to be less of a risk) at BigCos, even though they do occasionally close down branches.

</comment><comment><USER230> Con: with most startups (mostly the vc funded ones) it feels less like a startup and more like a corporate. The hacking ethos and mission driven teams have been replaced by overly nice offices, steve-jobs-wannabe-kid-ceos and mediocre team mates. I've lives both worlds and it seems there are few places left that are like the old days.

<comment><USER81> The lack of engineering skill among teammates is a huge con in general to working in the Silicon Valley, not just among startup. The money is too good and the bar too unrelated to actually maintaining code. Personally, I've found startups are one of the few ways to not spend a career mucking out a mess dozens of others left behind with few tests and even less design.

</comment></comment><comment><USER231> I was the 7th hire at a YC start-up which is now worth at least $1bn. I negotiated 2% of the stock in exchange for a 60% discount in salary, and an understanding that my work would primarily be evangelism/marketing, as I was burned out on engineering and just didn't want to be a sysadmin/devops/whatever anymore.

Anyways, I signed our two biggest customers, organized our tradeshows, did some tech work, and protected one of our employees from assault at a conference.

When I'd been there for 3 months, in the midst of a conference (where we were kicking butt, by the way), most of AWS went down and we scrambled to figure out what to do.

When I got back from the conference I was fired without severance. After I let them know I'd be speaking to the customers I'd signed, and that three of the engineers in their hiring pipeline were friends of mine, they came back with a "generous" offer of 2 weeks severance.

The funny thing, is they were really nice kids, and I do mean kids, they were children. I'm quite sure they used this as an opportunity to get rid of me because Paul or some other greedmonger at YC ordered them to screw me over so that they could sell more stock to investors later.

After that point, it hasn't mattered if I work for a start-up or a big company. YC taught me that all companies are the same, and now I just view myself as a mercenary.

It doesn't matter where you work, how much they lie to you about "culture" and "family", or how much they try to convince you that you should take a salary discount because "your stock will be yuuuuuuge and we're changing the world", or "this is a greenfield environment with a chance to do something entirely new" (it isn't. all start-ups are really just rip-offs of other start-ups. )

Your main response to every sales pitch they give you should be, "f _ck you, pay me ".

Repeat it, memorize it, live by it. F_ck you, pay me.

"This kinda shit happens all the time. You gotta get yours, but fool I gotta get mine" \-- Snoop Dogg.

<comment><USER231> PS, I've also been told by several friends who have gone through YC, and one who currently works there, that there's an unofficial internal blacklist, and I'm on it.

For what it's worth, in the 3 months after I was fired I referred a few dozen new customers, and I had no animosity towards them until I found out about the blacklist last year.

</comment></comment><comment><USER232> Work Environment:

Informal atmosphere, flat hierarchies, open mindedness are some terms that perfectly describe work environment at a Startup. So, if you are bored of your organization's formal work environment, then Startups have a better place to work at for you.

Real ownership & Results:

By working at a Startup, you can have a freedom to work. If you have an idea, execute it, and come up with the results. There is no need to follow a hierarchy and take multiple approvals. In case, your idea is a big hit, just enjoy the equity.

Experience:

Startup gives you ample of opportunities to take decisions and that too quickly. This would not just help you in learning but also help in gaining experience in case you have plans to initiate your own startup.

Sense of Accomplishment: Working at a startup gives tremendous & quantifiable impact. Startups give you a position to be an integral part of the system that plays an important part in the fine working of the business. The sense of accomplishment one gets from this is something that money can't buy.

Diverse Work Day :

Work day at startup is not like 9-5 corporate job. You do not have to go to office to do the defined tasks & come back home. Instead every day, in fact every minute can be unpredictable about work. There are different clients and different work, and you would have to manage all simultaneously. So, one another best aspect about working at a start-up is, you won't be bored!

The bad side:

Lack of structure: Due to inexperience of leadership, if management loses sight of team/cost/communication of strategy with investment, then one has to face the consequences and bear the burden.

Perk-less salaries: Yes, startups have fund raising issues. So, do not expect big salary package in the beginning. There is even no scope of any sort of perks or monetary benefits in the initial years of the Startup.

Lack of work life balance: Startup also means a lot of work, which demands extended work hours. You might enjoy flexibility in work style, however it would surely demand more time from you. So, be prepared to give extended working hours to your job and compromise with work life balance at initial stage of startup.

Job insecurity: Your career is directly proportional to the growth of the company. If its future at stake, so is your career. Chances of instability are thus high with startup companies.

Now that you know the good and bad side of working at startups, take decisions wisely and then work hard to enjoy success.

</comment><comment><USER233> \- Lack of stability \- Equity instead of salary \- Long hours \- Wearing multiple hats (hate having to do QA, Operations, even some product development)

</comment><comment><USER234> Pros: Being surrounded by smart people, paycheck

Cons: Group think, incorrect biases, getting cucked out of royalties, helping the elite take the future

</comment><comment><USER235> The basic problem right now is that adding capital dilutes labor, but adding labor doesn't dilute capital. I think this is one of the biggest problems the blockchain can solve by driving down the costs of double entry accounting by at least an order of magnitude.

<comment><USER236> This is super interesting but I don't quite understand it.. Can you explain how adding capital dilutes labor? Also, how does blockchain make it cheaper to do double entry accounting?

<comment><USER235> When you bring on new investors, it dilutes the equity of employees. But when you add more employees, it generally doesn't dilute the equity of investors. Rather, pools of equity are created periodically for employees with investor approval, and employees get options from that pool.

With blockchain though you can give equity in realtime, e.g. every 5 minutes that people are working, rather than once per year or whatever. The fact that work and equity distribute can both be monitored very granularly at no extra cost means that labor can (and will) be given equal footing with capital, rather than having hiring and compensation changes approved periodically by investors with little to no input from labor.

<comment><USER236> Thank you for clarifying. Couldn't a well drafted contract achieve the same ends as blockchain for giving equity in realtime? It seems like that is more an issue with the terms of the current employment contracts and not a technological deficiency

</comment></comment></comment></comment><comment><USER237> No healthcare at a startup.

<comment><USER238> The one time I worked at a startup, the lack of healthcare made me borderline suicidal.

I was beginning my gender transition when I worked there, and my doctor bills were bankrupting me.

Never again. Never ever ever ever again. I'm not touching a company with fewer than 500 employees again.

<comment><USER236> This may come across as ignorant and I apologize in advance but are health care costs associated to gender transitions typically covered by health insurance?

<comment><USER238> Depends on the kind of treatments. What was killing me then was the cost of doctor's appointments to get on hormones, which are generally covered (whereas it's a pain in the ass to get surgeries covered even with good insurance). Doctors are _expensive_ if you don't have insurance.

When I first started out, in order to avoid the doctor costs, I ended up reading the clinical guidelines myself, finding a place for me to order my own blood tests, and looking up a reputable overseas online pharmacy I could order the medications from. The blood tests cost me $60 a pop, and the hormones cost around $80/month from the online pharmacy I used. Now, I'm also going to mention that I was also spectacularly underpaid at the startup I was working at then. That $140/month hurt. Badly. And I was constantly worried customs would confiscate the meds. Now, estradiol and spironolactone aren't controlled substances, so I couldn't be arrested for ordering them online, but theoretically customs could confiscate them anyway because they're Rx-only medications and then I'd be out $80 for nothing (yes, there is legally a level between OTC and controlled, where it's illegal to sell but not illegal to buy). In practice, they only do this one week a year (look up Operation Pangea) because they don't have the resources to do it but there was still a chance.

After a few months, I grew uncomfortable doing this without a doctor's supervision, so I eventually decided to suck up the costs and find an endocrinologist. The doctor's bill was in the neighborhood of $200 per visit, and because I was still early in my transition, I was seeing my doctor monthly at first. Oh, and I was still paying $60 to Private MD Labs for each blood test, because it turned out to be far cheaper to get my blood tests through them than through the provider my doctor worked with. The one consolation is that the medications themselves were cheaper; estradiol and spironolactone are both on the $4 generics list at Walmart, so my actual cost of meds went down from $80/month around $30/month (my doses were such that I was taking multiple pills per day). But those endo visits ruined my finances...</comment></comment></comment></comment>