Cash is king - never work for free or let some overzealous founder (who has tons of equity and is ok working for poverty wages) try to encourage you to work longer or harder "because equity go up one day".
The founders of Windsurf are clearly horrible people and the fact they were DM'ing people on twitter trying to explain being awful people really reflects the current state of the valley.
Garry Tan even deleted a comment on this tweet where to Windsurf employee #2 he said "looks like you left $20M on the table". These people see employees as replaceable widgets and to them this is just a game build around the "excitement of building".
Legitimately F*CK these people.
Not all places with large existing codebases are that bad, but if you are experienced, it can be very personally satisfying doing something well before it has degraded over time.
I have worked in quite a few. One is a household name down here in Australia. I was the first engineer with the two founders. I worked 2 years 24/7 for half the salary I got when I left. I'll never get my money back but that's ok as I loved the time there.
Presumably you have a lot more control and freedom to do things how you want than at a large company with a lot of red tape etc.
That's the main reason I would do it.
On average, startups tend to have a better culture due to the incentives at play compared to big-tech. And that attracts engineers regardless of the comp.
You get to make a nice payout for a VC. And isn't that all of our life goals?
Because right now, there has been too much innovation in ways to screw over employees and the only reasonable assumption is that equity will vanish.
- Did he take the offer or not? - Did he forfeit the vested shares because he took the offer or because he didn't? - What was he offered in return for forfeiting the vested shares? - Did he get a payout of 1% because he took the offer or because he didn't? - The 1% comment implies that Google didn't use the $2.4B to buy the shares of Windsurf; if not shares, then what did Google get in return?
Original citation: "I was given an offer that would explode same day. I had to forfeit all of my vested shares earned over my 3.5+ years at Windsurf. I was ultimately given a payout of only 1% of what my shares would have been worth at the time of the deal."
Nothing has substantially improved since the article was written. With “forever private” companies it’s only gotten worse.
Seems like the best shot is to strive toward becoming financially independent, and then just go for the startup route and follow your passion. If you it doesn't work out, no big deal - if things turn out great, you'll just be even better off.
That said...
Don't be a fool for all these AI startups that want you to burn out on 100 hour weeks. Many YC and non-YC startups are using this bravado based hiring strategy trying to get cheap labour to fuel their rockets to the moon. Don't be no fool!
It was a fuckover.
Shame on the VCs who got paid out allowing this to happen.
If you’re not a good judge of people you should work somewhere that pays cash
Many interesting, and probably true, replies about investors cheating out employees, but it seems very few people read the actual post.
Essentially options for good (but not great) sr engineers are
1. Get 120k salary in Europe (on higher end)
2. 500k at FAANG in US (salary + RSU)
3. ~200k at startup in US + lottery tickets
Both option 2 and 3 strictly beat option 1 (especially after taxes) so European should get off the high horse and recognize reality that they are poor and exploited by companies and government.
If I was a venture capitalist dependent on 20-somethings believing in the dream I sold them maybe I wouldn’t write snarky replies on them on Twitter when this happens and actually look into fixing things for early employees (like, maybe, giving them similar terms that the founders get), but that’s just me I guess.
If no founders can be trusted, sweat equity partnerships will become rare. If the only people who can build companies are VC funded founders who hire employees who treat the whole thing like a game, there will not be a good crop of companies to come out of that environment.
Founding is freaking hard. It needs to be reliably and fairly rewarded. Otherwise the people trying to bootstrap and make things happen have nowhere to go if the idea they are completely convinced MUST be built is also a hard hard sell to VC hive minds... because it's too oddly shaped (innovative).
We all have an interest to put the instruments and paperwork into place to make stories like this NOT happen so that sweat equity startups founded on personal convictions and strong cooperative incentive alignment will happen.
At least in my anecdotal experience, everytime I’ve entertained a startups offer in the past decade it’s been either something like engineer #1, 3% equity and no you cannot see the cap table or other agreements with investors, or something like 10k units at 25 a share when we’re on series z, and you lose them if you leave, and you can’t sell for 6 months if you leave, and the investors have priority on payment if we sell for less than our valuation and yadda yadda yadda.
I mentally just valued the equity as 0 in the compensation with all those limitations on liquidating them and never understood why anyone joined a startup
The only thing that changed recently is the "unicorns" stopped happening altogether.
So, startup base compensation hasn't kept up, and the career and financial risk of working for one has gone up due to higher interest rate and higher open-market asset prices.
This is what I’m trying to do now. Having worked in startups and big tech; I think the best thing one can do is to attempt to forge their own path. For independence, financial gain and sanity
You will get a regular salary, with occasional performance bonus, just like any regular company, with all the action a startup requires.
You're assuming someone joins a startup when they could join a big company. It's an exceptional occurrence.
Do seek professional help. It doesn't need to be expensive lawyers, there may be gratis support from the cooperative network. https://ica.coop/en
Having done two more, the best outcome I’ve seen is a 50k post tax payoff for 5 years of shitty startup conditions. Great, I got a down payment on a house now worth 800k.
So that reason the best play, if you’re not a founder doings cash out early, is to just play it safe in a big job and dock money away in equities and real estate.
There is nothing I could do for pleasure, even with double my salary, which would compensate for the misery I would feel working a job I hated. But that's who I am, and we're not all the same!
Don't just accept promises. Ask for the 409A valuation, liquidation preferences, and pay bands. If a company won’t provide transparency, that’s your signal.
Equity is a lottery ticket. Salary is money in the bank.
My equity from 4 years ( employee ~60, grew to over 500 ): worthless. No one is able to exercise any options. They also readjusted when the valuation came below the total raised, making the value of my vested shares ~$13k ( down from ~$200,000 ) . They 'made us whole' by giving more shares with a new 4 year vesting schedule.
Startups have found ways to fuck everyone but the investors with equity. It's confederate dollars; funny money. Maybe some people get great deals, I don't know. From my limited experience at very successful startups, the only people who made real money were those able to parley huge bonuses or base salaries.
Work for good people with a history of moral dealing. A family member just had a life-changing payout because leadership was generous. A friend walked away from a company pre-pivot without equity for what became one of the decade's biggest acquisitions.
This stuff is lottery tickets, but real ones. You need to be smart about who you make your limited bets on.
And agreed, big cautionary note here shows that Windsurf having "founder-friendly" investors does NOT mean employee-friendly ones.
The only good reasons to do so are if you want to learn or make contacts so that you can found your own startup later.
In my pensive moments, one of the things about humans that makes me go "god damn" is how little money it takes for insanely talented people to just come and work for you.
Hey, at least he’s taking his LARPing as a douchebag ceo seriously. Easy vip invite for DND nights.
I had the option to sell some equity recently but it would have only been like $16K USD so I held... I had about $9K taken out of my salary to pay for those so it doesn't make sense to sell given the massive growth the app and not that much dilution... The financial gain barely covers the inflation.
It feels like both revenue and profits have been kept artificially low. $6.5 million per year revenue, still growing steadily, with a loyal customer base with 10% profit seems really good... A valuation of $8 million seems ridiculously low... Not even 2x revenue, for a tech platform with good lock-in factor (they sell a lot of licenses to schools)!
It's kind of amazing how bad a deal it is to work for someone else as an employee. Even if the founder is good and generous in many ways and the business side (which you have little control over as a developer) happens to work out pretty well, they can still pull all sorts of levers to make the deal bad. With this one, I'm going to wait it out 20 years if I must. A lot of the game is just timing, you gotta wait it out, sell at the top... Some people see a peak opportunity to cash-in multiple times in their lives, some people never see it! In my case, I haven't seen the top yet.
I never had any opportunity to make serious money ever. Never had an opportunity to pull the trigger and make even $100K. The best I ever got was in crypto, my crypto was worth $100K but I was earning like 100% annual yield and required a 1-month unlock period. So I made more than that by holding it for 3 years anyway...
I think my career story so far is quite interesting. Probably more interesting than 99% of the classic SV startup stories (at least what they say publicly). I've done some things nobody else has done. Made money in truly adverse environments where a lot of people hated my guts. I've seen people behave in strange ways. At times, I felt like I was almost breaking through the membrane of 'the matrix'; almost transcending my social class. But all I got for it was 3 years of passive income. I never had the opportunity to cash out big.
It's tough out there, so tough, it often feels fake/artificial. Often, it feels like you have to be 'chosen' and that's all that matters. Your work doesn't matter, how talented you are doesn't matter, how lucky you get doesn't matter (besides the luck of 'being chosen').
At the end of the day, money is like a river and people upstream from you get to decide whether or not the river will flow in your direction. When you understand that new money is created constantly and, just like the river, the water cycles between the mountain and the sea, you start to understand the value of positioning and 'being selected'. The people upstream will keep telling you that they don't control the flow of money; that the river flows naturally through the lowest valleys... It's your job to put yourself in that low valley... But really, they've built massive dams up there directing the water almost arbitrarily. You may be at the lowest valley but they're redirecting the water elsewhere artificially because it suits them better. Reality is that they can easily alter the path of the river anywhere they want and it has little to do with 'building something people want'. It's about building something the people upstream want... And sometimes they just want to help their existing friends; unfortunate for you if you are not their friend.
It's a catch-22; you need rich friends to get money but you need money to get rich friends. But I suspect it's way easier for a poor person to get rich by befriending a rich person than it is for a poor person to get rich without rich friends. The second approach feels like you're piercing through 'the matrix' because of all the weird almost conspiratorial resistance you might get (tech feels like one big club).
Sometimes you might accumulate some dirt on some rich people and that gives you some leverage over them but it's the kind of leverage where you have to keep coming back to them to get crumbs. I feel like you can never break through that way due to regulatory capture. You can only do limited damage to them and it's always costly to you. They still have the balance of power.
This becomes truer and truer the more of an employee and the less agency over the company's choices you have, but generally if you're not a co-founder (founding engineer doesn't count) equity traded off against salary is someone scamming you.
Not very good incentive or compensation, if you have to value it at $0.
the much bigger motivation is "keep the company afloat so i can keep drawing my salary", so just boring old non-equity paychecks provide plenty of motivation.
if you're an employee that thinks your contributions are so great that you are single-handedly juicing the stock price or valuation, you're probably wrong but if not... you should probably take those skills and found your own startup.
You can almost never get any info on equity until it's too late and you realize it's worth nothing.
Those questions are certainly worth asking but employees should also keep in mind that even if they do share that information your equity can still later be diluted away to worthlessness.
"Wanted to hire me" as in they made an offer, or an earlier step? At offer stage, I've never had a company refuse to answer these questions. I don't have "dozens of companies" worth of experience though, maybe one dozen if that.
Yeah, because that is in your interests, not the engineer's.
They offered to sell me more shares
I countered that I'd been trying to dump the shares they already gave me and if the shares are truly worth X dollars they should buy them back from me
Anyway glad I quit
I always take more equity. I wouldn't work for you in the first place if I didn't believe in your equity.
Sure, if you don't want to take a risk then look for a higher salary, and probably at a more established company because even if you have mostly salary and little equity a startup is still risky (and you're making it even more so by putting cash pressure on the company at that stage).
On the other hand, if you want a chance at a bigger payout, you'll want more equity. And yes, you may well not get that payout.
Stock options were always a lottery. But this takes the shenanigans to a whole new level.
Ask HN: How to negotiate stock options? - https://news.ycombinator.com/item?id=28401655 - September 2021
It's always worth offering to take equity as long as they agree in writing to not ever dilute your shares and vest them immediately. However, it's unlikely that any company will agree.
It's best to imagine compensation as exactly one's salary. Then (virtually) all surprises are good.
Well, yes, because that’s insane.
I feel like I understand _what_ an RSU is and what options are, but are there any good resources for me to learn from?
Options go to zero much more often.
So you're working at this startup. Lets say it's worth $10 million. To make things simple, in this company, there are 2 people, the fucker, the CEO, the guy that started it all. He holds 90,000 RSUs, each worth $100, so $9 million, and the fuckee, you, who holds 10,000 RSUs, each worth $100, for a cool million.
Here's where the fucker fucks the fuckee, ie you. The company does a round, and then creates, out of thin air, a billion shares (1,000,000,000), and issues them to the new investors. Lets say the company reached unicorn status this round, which is to say a valuation of a billion.
Holy hell a billion! But wait now there's 1,000,100,000 total shares out there, and the valuation of a billion, divided by the new shares, means that each share, of which you only have 10,000 of, is now worth just under one dollar.
That's right, your $1 million just turned into $10,000. Which isn't nothing, I'd love to come across a random $10k I didn't know I had. But that's just, like, one really nice vacation for you and the kids, which you haven't seen enough of because you've been working so hard at this startup, and not, like, a college fund for the kid that's showing aptitude at engineering and that you were hoping was gonna go to MIT.
Dilution is inevitable, there's no avoiding it. The scenario I presented is just to show you an example of how dilution fucks you. If things go well, would you rather have 10% of $1 million or 0.1% of $1 billion?
For more, it depends on how you like your information. ChatGPT's got stuff like ISOs vs NSOs pretty well covered, Investopedia's got a lot of good stuff if you'd rather it that way.
First a 409A is generally engineered to keep the lowest value possible in order to allow the employees to exercise their options at the lowest value via an 83b election so at an exit they can be taxed at the long term capital gains rate. When someone joins a startup and is issued options the value of the stock is set via the 409A (which has to be renewed every year). The lower the number the more likely an employee can afford to write the check. 100K shares at $0.01 vs at $0.25 is a major factor for anyone to consider. Any startup worth their damn will make sure the facts in any 409A fit a low number for that reason. The reality of an exit where you are acquired will be based on other numbers that optimize for forward earns and value of your team and tech.
The questions you need to ask are:
What is the total authorized shares? What is the required process to raise that number? How are we funded? Does funding include preferred shares? What is the preference on those shares? On an exit what is the payment order?
I agree about the salary bands and at my current company we provide them, as well as answering all the questions above upfront to any candidate with an offer.
The reality of windsurf is that the founders are scum and this is going to end up in court for years. Google should be ashamed.
The only time it ever makes sense to push for more salary instead is if you literally cannot get a job at a public company (or even a near IPO unicorn). Plenty of startup employees can, so clearly they believe their startup equity is worth something.
Financially speaking, startup equity is actually worth a lot as an employee (https://www.amafinance.org/startup_comp/). Yah, over 50% it's going nowhere but expectation needs to consider how huge the win is even if it is lower probability.
It seems like you're saying: if you choose to work for a startup rather than a bigger company, it must be because you think their equity is valuable, so you should prefer to take more of your pay in the form of equity if you can.
But there are plenty of other reasons for choosing to work at a startup.
You might have chosen to work at that particular startup because the work interests you. You might prefer startups to bigger companies because they have less bureaucracy and can do (some) things faster. You might prefer startups to bigger companies because there are fewer layers of management above you and so you have a better view of why you're doing what you're doing.
Even if you're only in it for the money, I don't think your argument is valid, though this is more of a nitpick: it might happen that a startup particularly wants you or at least your skillset and is willing to pay more for it than any bigger company you've found. You might think the startup is likely to fail, but still prefer being paid twice as much. (This is kinda nitpicky because I don't think this situation is super-common, unlike the other ones I mentioned above.)
This is why you would never see an early stage investor invest in only one company. They need volume to be able to survive the high risk/high reward nature of startup investing.
Now, maybe you think you are a better judge of the probability of success for your startup than an investor, so the risk is lower. You would be wrong; if there was a way to reliably predict which startup would hit it big, then investors (who spend all their time trying to predict exactly that, and have a lot more data and history to use in their evaluation than you do as an employee) would have a much higher success rate.
So even if you have a very promising startup, your equity is a huge risk. Your company probably won’t hit it big, and if it does you have to hope you aren’t screwed out of your equity by the millions of tricks they use to screw employee shareholders; dilution, preferred shares, etc.
Even worse, you are taking double risk. Your startup is risking both your equity AND your salary. You want to diversify your risk, so you can use your investment when your salary fails and use your salary when your investment fails. In this case, those both will fail together if your company doesn’t make it.
Look, equity and stock options are great, but you REALLY have to discount its value as an employee because of the way the risk shakes out as an employee.
yes that's literally the definition of expectation value...... so
ev = 1 bagillion * 0.0000000000000001 = ~0
I know a few people who did well working for unicorns, but that isn't most startups, and pretending that any given startup will be one is selling yourself short.
The headline "startup bought for x million" is almost always a lie, either direct or by omission.
First, when a startup is bought, its generally not bought at the headline rate. So if you see a "bought for $45m" that doesn't mean People who own shares all got a % of 45m.
That number is normally bullshit, but also a "total package" which include share offers for joining the new company.
This means you will get say 1% of the headline buyout now, and then golden handcuffs to get the rest.
Also, it makes no sense to give employees that much money upfront. After all, if I'd been given $1m in one go, I wouldn't be fucking working now.
Commendable of them. That should be normal decency by leaders. I wonder how common it is.
Cognition acquired Windsurf. So how has he "joined Cognition"?
"I had a place at Google DeepMind as part of the deal." What does that mean? DeepMind doesn't have anything to do with Cognition or Windsurf, right?
Why would an offer at Google require forfeiting vested shares in Windsurf? Is that Windsurf policy or Cognition policy or Google policy?
"I was ultimately given a payout of only 1% of what my shares would have been worth at the time of the deal." So he took the payout and forfeited the shares? "In going to Cognition, I’ve chosen a different direction." Or not, he rejected the payout and kept the shares? I can't even tell what's hypothetical versus what actually happened.
I literally don't understand a single thing about this tweet. I've read all the comments here so far and my confusion seems to be shared. Can anyone who has context please help explain what's actually going on? And particularly how any company could force you to forfeit vested shares in a company?
Google poached windsurf employees and licensed their tech, paying out billions to upper management but apparently offering a fraction of the value of shares
This employee chose to stick with windsurf instead of moving to Google
Windsurf was then acquired by cognition for an unspecified but probably quite low amount
So this employee is now at cognition
But so did he keep the shares or take the payout? Is the 1% payout an accurate reflection of Windsurf's value after having lost so many valuable employees? And why didn't he take the Google job? Was the 1% contingent on taking the Google job? But how could it be, since Google doesn't own Windsurf/Cognition? But if it did somehow, did it have a higher paycheck to compensate? Or was it contingent on staying at Windsurf/Cognition?
This thing needs an in-depth blog post analysis. The tweet by itself isn't providing even close to the information necessary to understand what's actually going on.
Smells like a strong bias against employees in favor of management and founders.
These are those people. Oil and railroads were high technology too.
They want you to think they’re Lazlo Hollyfield, but they’re Daniel Plainview.
Even if the OP considers the full headline number of $2.4b to be the value of the company, and taking his "1% of fair" number as truth, seven figure payouts would imply all 40 founding engineers had >4% equity which is nonsensical.
YC isn't particularly great here either, they are pro founder but not pro startup employee. Most YC companies offer pretty paltry equity to even the first few hires - and that is even assuming you aren't going to get screwed down the line.
That's when you get a real job at a very boring stable company and stop being delusional.
Yeah, the hours can be crazy but not too often. Yes, you're expected to give your best all the time but that's part of the fun. And the best part is the challenges are always interesting.
Maybe it makes it easier for me that I'm not at all interested in normal family life and never want to have kids.
[1] https://techcrunch.com/2024/01/11/us-startups-have-a-liquidi...
I’m not sure customer churn rate has any impact on liquidation preference.
They had plenty of value left even after getting gutted.
In negotiations I tried to get more salary, by taking less equity. It kinda worked, but later they doubled my equity to match other hires of the same era (but with a new vesting schedule for the new options). Then at some point I was fired without reason. The company went on to become worth a lot, and I was able to get out with enough to never work again and live pretty luxuriously. AFAIK others that were in my era at this startup did equally well, or many times better. It can happen, but I didn't ever think it was even possible because I didn't understand what 'options' even were when I was hired.
No one really knows how the game is played
The art of the trade
How the sausage gets made
We just assume that it happens
But no one else is in the room where it happens
Would be curious to see the breakdown of the $2.4b:
1. How much to the founders in Google employment incentives
2. How much in licensing fee to the company itself
3. How of the licensing fee went to immediate payout to VC investors (+ employees)
4. How much got left on the balance sheet of the remaining company
I don't understand how #3 can be so large and common stock holders walk away with almost nothing without breaching fiduciary duty?
Fiduciary duty is very low bar. Management has to act in the best interests of The Company, as in, as a whole. The company != #2. Lawyers are not taking this case.
I'm certain the accounting was done properly, maybe even by a Perl script, and this is how it penciled out. The question for us stiffs is what can we learn from it?
Great song from Hamilton. Sorry for being off topic.
https://x.com/apartovi/status/1948444826674102732
bad look all around.
I got a payout on acquisition by a FAANG+ (as first employee). It was only 300K but I put 50K of that into Nvidia. Actually I invested all my payout from my startup stock into tech stocks. And I got a terrific golden handcuffs deal.
After that I could afford to retire and I did.
Deep appreciation to everyone who shared their story, thank you!
This is coming from someone who programs for a living: contrary to what you are saying, the money guys take too little equity. The money guy being, the reason you are raising money at all, and not just dipping into your own savings.
> I was given an offer that would explode same day. I had to forfeit all of my vested shares earned over my 3.5+ years at Windsurf.
Was this a scenario where he lost them because some sort of “cause” event occurred, like leaving to work for a competitor? I can’t imagine that would even be valid under CA law?
I’m not even sure who was forcing him to forfeit his shares…
Looks like employees were given an exploding offer to join Google and sacrifice windsurf shares at a low valuation, or stick with windsurf
If you stuck with windsurf you then joined cognition in a later acquisition
I think if I understand what he is saying he could either stick with the product and team giving up the shares, or keep the shares and try his luck getting money for them another way.
I appreciate that his choice shows that he is in it for the product and the team, but also ouch.
> I was given an offer that would explode same day. I had to forfeit all of my vested shares earned over my 3.5+ years at Windsurf. I was ultimately given a payout of only 1% of what my shares would have been worth at the time of the deal.
Was forfeiting the vested shares conditional on accepting the offer, or did he have no choice over the matter? Was the payout what he was offered as part of accepting the deal, or was that his consolation for not accepting it? The wording is genuinely unclear to me.
I literally see 3 interpretations here:
1. Offer was to forfeit shares in exchange for 1% payout, but OP rejected and still has shares
2. Offer was to forfeit shares in exchange for undisclosed payout, but OP rejected and got 1% payout instead and still has shares
3. He had to forfeit shares regardless of accepting offer, got 1% payout
(1) and (3) are both shitty offers from Google, but (2) is reasonable. Exploding offers are not uncommon in tech acquisitions. My guess is that (2) is what happened, since that's not in contradiction with prior reporting.
Presumably they told him his shares would be worthless anyway an if he didn't take this "great offer" it would expire when he left the room and he would get nothing...
...and he fell for it.
It wasn't dilution of other things people are talking about here... those things happen but this guy straight up just got had.
So sure equity is worthless... if you sign it away.
Think like an investor. Would you back this person? Are they ethical? Are they resilient?
Also stock options should not be high on the list. Most startups fail before founders or VCs even get the chance to screw you over. In 99% of cases, nobody wins.
it's not uncommon that a regular salary from a big tech in the bay area would amount to ~$2M total after 4 years (considering stock appreciation).
if you were given 1% of equity of the startup then start up has to worth $200M after 4 years. or more likely you would be given 0.1% of equity of the startup, and then it has to worth more than $2B, in order for it to make sense for you.
how likely is that going to happen?
This is indeed venture capital risk, but this case lays bare the exorbitant amount of risk for investing in these types of companies--perhaps especially in California?
When we were talking to various companies about acquiring Sandstorm.io (my startup) in 2017, one of the companies told me, essentially: "We aren't interested in your IP, only the employees. We'll give you a set of job offers for them. We will then sum up the salary and equity grants from these offers, and call that the acquisition price. If you want to take some of that money and redirect it to your investors instead, that is up to you."
I was a bit taken aback. Obviously I wasn't about to take a cut of my employees' future comp and give it to investors.
Instead we ended up going to Cloudflare, but not as an acquisition. Cloudflare told us very honestly that they couldn't justify buying the IP, but they would be willing to acquire the company for $0 to wind it down for us. I decided to just take the job offers but keep the company independent as an open source side project, thinking maybe I'd revive it eventually. Turned out to be a mistake as some guy who was mad we didn't hire him sued Sandstorm six months later, and that was then my problem instead of Cloudflare's, oops. Should have sold for $0.
(Once it became clear to the plaintiff('s lawyer) that we weren't going to settle, they stopped pushing the case forward, but didn't drop it, so it just sat in limbo for 5 years before the judge finally threw it out it 2022. Meanwhile I couldn't dissolve the company and had to keep filing taxes for it. Ugh... lessons learned.)
Generally, when a startup is acquired, people get paid in a number of tranches:
- First, debts get cleared in order according to debt types. This could be cloud providers, lawyers, employees who deferred salary, etc, etc. If there's still cash left..
- Then preferred (generally earliest) investors get paid back. Some investors will have liquidation preferences where they get 2-5X their initial investment. If there's still cash left..
- Then execs get their preferred shares cashed out. Depending on how many rounds they'd raised, they may own less than you think. If there's still cash left..
- Finally, general stockholders get paid. This is where most employees may actually get cash.
To further complicate things, some people could be in multiple places here. A founding exec may have lent the company money to get started, have preferred shares, and have common shares so they could get paid out in early levels but not at the end.
*There are WAY MORE nuances in this but the point is: You don't just say "total price divided by shares times number of shares = the cash you get"
Unless you already had several other million saved already, I bet you’d be working again.
There's very few currencies in the world in which 1M isn't enough to retire. USD isn't one of them.
Let’s do a simple math. Assume this employee gets 5% of the company (which is super unlikely, but let’s go with it), that is 150m for what could be worth if OpenAI deal went through. 1% of that would be 1.5m.
That is still 7 figure. But this person spent 3 years in a startup, which turned out to be a unicorn and super highly successful, and he bagged a FAANG salary man pay at the end of the deal.
Basically this just proved startup model for normies are completely broken, if your goal is money, don’t join a startup
Who is gonna want to work at a startup in a non-founder role after this and Scale AI?
This continuing degradation of, and flagrant disregard for social norms is destructive for society.
Nevermind that $1m over ~4 years is approximately the same as the differential other public tech co's pay. ($150k + equity at YC co, $350k TC at G/Amzn/FB/Uber/etc.) So when they tell everyone they should work at YC co's, they're saying they're proud when in the absolute best case scenario you make just as much as at the public co's they rail against working for.
If you want to come across as genuine, directly say how much % of the payout went to employees that weren't the founders. They won't, because it's likely 3%, which correctly sounds horrible
that matches my experience working at 2 non-public venture funded companies.
For his assertion to be right, 40 people need to get paid out at least 1 million. That's 1.67% of the company or 0.04% evenly. Its not hard for me to image that up to 10% of this cap table was distributed among the 40 people.
Who did you hear it from Garry, the founder that made out with all the money ? Or the other VC that made a few hundred million from the sale and stands to gain even more if the lie of "founding engineers get rewarded" is perpetuated?
Forty founding engineers? Seriously?
They must have a very expansive definition of founder.
1. It's relatively chill and you value the stability. You deliver competence from 9-5 then go home to your family or some other thing that's more important to you than work.
2. You really enjoy the pure engineering side and find meaning in the technical artifact you're creating. Probably it's open source and has some value/community outside of your employer.
3. You're gaining valuable experience that you can later leverage into something else. Probably you're in the first 5 years of your career.
If the main thing driving you is growing a business, and you don't directly own (not options or RSUs or whatever, actual real equity) a significant slice of it, you are very likely misdirecting your energy.
(I guess there are also cases where the mission of your organisation is not profit and you care about that. I don't know any engineers in this position but I might be quite happy working in the public sector).
If you’re instantly replaceable by any dime-a-dozen engineer than can install packages on npm and use react components and add a thumbs up to slack messages…to not get accidentally rich because you just took a high paid tech job a year ago…seems fair?
I just fail to see why everyone in the comments here believes they deserve to be compensated at the level of the top 0.01% of all people without starting their own business.
Start your own company if you think it’s so easy to be a founder instead of an employee. Nobody is stopping you.
I also think it’s some crazy cognitive dissonance to assume you’d be able to walk right into a FAANG sr. eng gig instead. As if most startup employees haven’t tried before joining [insert startup].
If I join a lottery syndicate and it wins 100m but I only put in 1% of the syndicate amount say $100 do I not deserve $1m because I'm just a "whatever I am just"???
No one is saying this.
There is no question that the Windsurf and Scale AI ploys effectively left employees with ownership in the company high and dry.
> but how much do you think you deserve as an employee
You deserve what you are promised. If a founder says you will get rich if the company goes to the moon, and they instead do some strange maneuver so only they cash out, the founder is a scumbag.
You are acting like early startup employees risk nothing working for a startup, and invest nothing of their own. Again, that is a weird assumption.
I value startup equity at ~$0, but if the salary is enough to live comfortably, that's fine.
You need to work with good people. There is no substitute for ethics.
Also you need not go for roles where they offer .3 % and make a big deal about it. Don’t take less than 1% minimum and as soon as two years pass by and you have carried your weight start looking for a new job. If they value you they will bump you up. It they don’t you will bump yourself up by going for a new job. And don’t be afraid to go for competitors if you believe in the value of the space.
They have the cash, if you have the leverage. Use it.
I always offer companies pushing equity hard to trade for cash at 10% of the highest number they try to get me to value it at. Nobody has ever taken me up on it, even when they really should have.
That's exactly why it is true. If every person who held early stage stock walked out of those events happy then no one would recommend they focus on salary.
Even if each risk is a good one to make separately, it isn’t always good to make both risks.
The problem tends to be elsewhere - as part of the deal, the investor asked that his share get preferred treatment in the next round - a liquidation preference which grants them the right to first take their investment of the table and then, whatever is left is distributed. The company gets sold for 1 billion. The investor takes the billion that they invested off the table. There’s nothing left to be distributed. Your shares are suddenly worthless - just as the founders.
Early stage investors know that even the best startups have a fairly low chance of success, which is why they diversify by investing in a lot of them. The many failures are paid for by the few successes.
As an employee, you are only given stock in the one company you work for. Even if you think it will be a success, it isn’t smart to put all your eggs into that one basket. No investor would do that, and no employee should either.
If you are working at a startup, a lot of your eggs are already in that basket; your ongoing salary is dependent on the company continuing to succeed. If you take less cash for more equity, you are putting even more eggs into that same basket. If it fails, you are going to lose all the equity AND your salary.
You don’t want your investment risk and your salary risk to be that correlated.
Then there are non-unicorns. These may even start as maybe unicorns. But as soon as you know it's never going to be a unicorn, you can leave. Or stay, prospects depending. If you know it's never going to be a unicorn before you even join, you can think of it as glorified contracting. Done that too. Maybe lean on compensation rather than options because a whole lot of nothing is, tap-tap-tap, nothing.
BTW, VCs think along similar lines.
Also, engineers are not the reason VCs have a job.
How are they not? VCs don't actually do any productive work - they don't make anything.
In order to invest in something, anything, you need the something. That's a pre-requisite for investing. Engineers build the product. Doesn't even just apply to software, this applies to everything.
But you don't want to be that employee...
Unless you're planning on retiring as cheaply as humanly possible, 1M is not enough to retire for the large majority of the currencies in the world.
Hint: it’s not as easy as you think.
And the point is the syndicate didnt win??
Pretty expensive.
The founders of Windsurf had already gotten their bags, they won't have to work a single day later in their life if they don't want to. The consequences will be bared by the ecosystem.
For the time being I think they are going to be OK, the labor market is employer friendly.
Equity is only to be valued at greater than $0 if the business is publicly traded.
That said, everyone here treats equity of non-public companies as if it's toilet paper. Some of my coworkers got very lucky and very rich when our company went public, but that was also a long time ago now.
If you’re an employee you can’t look at this like an investor would. Your risk profile is completely different. The write up is correct in that it’s basically a call option, correctly point out there is no market for it and then ignore the fact that zero liquidity means you can land a 747 between the bid and ask (if you get anyone to buy from you at all).
This a feel good number generator.
I am also convinced that investors believe it's the C Suite's responsibility to tear away any equity from employees to leave the largest pot for investors.
Terms and phrases I've heard verbatim from investors and/or founders:
"There's a thousand ways to screw minority shareholdeers."
"Cram-down" (repeatedly, like it is an ordinary thing to do, effectively repudiating or diluting away entire classes of debt and/or equity)
"I hate to lie, but you often have to." (said as if there is no choice in the matter)
"You have to screw the other guy before he screws you."
"If there's a problem in a joint venture and you put out the resources to fix it, you're the chump."
It is a good idea to not do business with people who say these kinds of things.
It is delusional to think you will be the special one who they actually treat fairly and not be targeted by their greed and lack of ethics.
If you are really lucky, you will escape and find an attny willing to take your case and win a lawsuit and still get to chase them for the judgement.
The only winning move is to not play.
(Not to say there are no honest ones, but it is really getting scarce, and many honest ones have left the biz.)
There's many opportunities for VCs and founders to screw you over. And that's assuming things go well enough for that to be an option lol
So, a new trend where big tech “buys out” a startup in a way that only early VCs, founders and top managers get any value.
Do you mean the Scale AI acquihire? I took it at face value that Alex Wang just joined Meta, but come to think of it now, the company's just a husk of itself, customers no longer trust them, etc. So, it seems you're referring to Scale.
It’s breaking my brain a little bit that this isn’t a straightforward breach of fiduciary duties to the corporation and its common stockholders. If an acquirer can deal with top management and holders of preferred shares, and scoop out the crown jewels of the corporation, then what’s even the point of using a Delaware corporation to raise capital? Might as well just form a Nevada LLC using an LLC agreement that just says “good luck.”
The question is will it become more common now?
Also, people equate these to aquihire deals. But they are not really. Most aquihire deals are when the company is out of runway, or it seems growth has slowed/stopped and there are no good ways out. There is not mucH value left.
Here there is clearly billions in value, it’s just not being distributed in the normal way.
In a private company, there's no "real" public valuation of a share, so an employee who has some kind of stake really only has two real options to dump their shares, either through a company buying it (cognition) or the company going public. Without either of these events, it's really difficult, even if there's no contract about it, to sell the shares.
So the value of the company took a nose dive in the private market through the hiring of windsurfs principals, and the employee either kept his shares and went with the company, or took a job with google. So the two values are:
1. Stay with Cognition and retain the private market shares of Windsurf and salary
2. Leave cognition, forfeit(?) the shares, get whatever salary google offered
So those are the payouts being compared.
That's just called "hiring". In order to "acquire-hire" employees of the target company, one must first "acquire" the company and the "hiring" part just comes along with the deal. In this case, Google skipped the "acquire" part.
Google put a ton of money into the company which then repurchased select people's stock while leaving everyone else high and dry.
Surely it needs to be called something else, because acquihire means "hire some employees by means of acquiring the company they currently work for" (it's in the name). Since Google did not acquire the company, it can't be an acquihire event. "bribehire" or something?
[1] https://medium.com/@villispeaks/the-blitzhire-acquisition-e3...
> Had the employee taken employement with Google, it's likely their shares in windsurf would have been voided, or otherwise not vested.
That doesn't make any sense. The shares are already vested, they legally own them. How could they have been voided?
The idea of joining Google resulting in a "1% payout" doesn't seem to make any sense? Why would there even be any payout at all? And is it mandatory? How could it be?
And then it also doesn't even seem obviously terrible. If the valuation of Windsurf tanked, then is keeping the shares (now presumably converted to Cognition shares at a rate determined by the purchase?) even a better financial outcome?
I agree that Google acquiring the talent rather than buying the company seems shady. But the "1% payout" still isn't making much sense here and needs a lot more details. Because it's still not even clear if the payout is from Google (huh?) or Cognition (why?), or how it could be a mandatory condition of employment at Google.
Options vest, but you have to exercise them to purchase the underlying shares. This is nominally cheap, but from the IRS’ perspective you have just spent $1 to purchase a share worth $100, so that’s $99 of income. Multiply by a large number of options and you can easily have a real multimillion dollar tax bill even though you have no way to sell the shares to recoup their value.
Worse, if the company loses its value before you can sell, you’re still out those taxes with zero recourse. It’s an enormous risk.
If you leave a company with vested but unexercised shares, you generally forfeit them.
Probably indicates that there is a non-disparagement agreement as part of this deal. And usually they include a clause which prevents them from publicly acknowledging the existence of the non-disparagement agreement. So we have to read between the lines regarding how he actually feels.
I mean why would anyone honor employee options when buying out a company if you can just poach all the key employees and assets.
As you said there was so much money involved. I can’t think of a similar situation where employees were screwed out of billions like this.
Absent those guarantees, it's smoke, nothing, kaput: 1.5% equity or whatever % can become approximately 0% and there's nothing the employee can do about it.
They could structure the agreement in other ways to incentivize the potential employee: if additional shares are issued, pay a dividend to the employee.
the whole point of equity compensation is that it replaces cash, as the startup rarely has sufficient liquidity in cash.
But equity is often used in ways the employee does not understand and get screwed over. It's also why there are accredited investor requirements for VC/startup investments - so that only those who can afford to pay for a lawyer and such can partake in these deals. Unfortunately for an employee, the loophole is that they don't get this regulatory scrutiny, and also don't have or earn enough to hire a lawyer (and oft times not even access to the cap tables - it's just a literal number of shares, without context).
No wonder employees get screwed while investors (of the accredited kind) don't.
Understood and it makes sense. Offering equity to a potential employee is a way for the employee to benefit potentially on future growth in the company.
I'm proposing that if there is a future funding round, pay the employee a dividend from part of the proceeds. Or maybe give them more shares or a combination; but put it in writing from the start.
The question everyone seems to be asking is "is the payout worth spending the first ten years of your career in the West Coast startup scene." Ten years is quite a lot of time to spend somewhere you don't actually want to live.
Unsubsidized healthcare in a lot of places in the US costs $10k-$20k per person per year. For early retirement that eats up like $400k-$500k per person.
How is that possible? Even with a fully paid off house, you still have property taxes, utilities, maintenance.
Even 4% a year which is recommended for a 30 year retirement, you’re only taking out $24,000-$36,000 a year.
That sounds like my personal idea of Hell, I’d like to be able to get treatment if I got cancer instead of being given a prescription for painkillers and a look of sorrow from a doctor that can’t treat me.
FWIW, I currently live in a shitty $1000/month apartment in a mid-tier city, not casting any aspersions on the living situation. But, I’ve lived in this same city without a car and it’s miserable.
Under simple dilution rules, the Investor takes 50%, and the existing shareholders are diluted to 50% of their stake - the C-Suite owns 5% of 2 Million, 10 million as before.
If the C-Suite demands that their equity proportion remains at 1%, they’d suddenly own a stake representing 2 million valuation. That difference needs to come from somewhere.
The claim in the tweet was that they got 1% of the value of the diluted shares: e.g., on paper they should own 1% of $100m, but somehow they only got $10k out of it. There does seem to be a culture of this going around now -- the VC version of "Hollywood accounting". In a lot of situations it doesn't make much sense to me -- is it really worth poisoning the well of startup talent for the VCs to get $95m instead of $85m?
If the value of a company is $10m and the company asks an investor to give $10m in exchange for equity, the investor should own 100%.
If the value of a company is $20m and the company asks an investor to give $10m in exchange for equity, the investor should own 50%.
Such a privilege is also likely to be almost worthless - if the company succeeds and the round makes it worth more, you’ll win even with dilution. If the company doesn’t, then other clauses such as liquidation preferences will make your stock worthless, regardless of how much you own.
Without this provision, it's possible in many ways for the employee to be left with far less than $X, even if the company succeeds. In some ways <<<<<<$X.
Some time ago I found a good formula to plugin numbers and get a valuation multiple. The questions above were the ones that really moved the multiplier. A major lot of “startups” are in the 1-2x range. The hot ones will peak at 7-12x.
I feel like they could easily bump up profits by $2 million just by letting go of people... But they could probably double the license cost per student. Although schools don't have much money, they are kind of slow and bureaucratic; set in their ways. It's a small cost for them anyway, once a system is part of the curriculum, they'll probably pay extra to avoid reorganizing the lessons.
0.2 % of that is nothing.
even finding a lawyer with the expertise to handle a case like this is not easy, its a very small world among those types of lawyers
https://www.zillow.com/homedetails/5436-Agana-Dr-Santa-Barba...
I can cry that my dream flat in London is more expensive than I expected 30 years ago but that just shows how stupid I’ve been the last 30 years
It's not that it's cheap here, not by any measure, but it's not nearly so dire as y'all want to claim.
Lots of people are paying millions extra just to live up winding roads on a hill, where the commute is longer, and you need a geotechnical engineer to design your patio.
I would also add, the forklift driver who bought the house for 40k in 1971, by state law (Proposition 13), is still paying 1971 valuation property taxes and contributing essentially nothing to local school funding, funding which is mostly covered by you according to a "new guy has to hold the bag" type scheme. In a state obsessed with fairness, a most unfair policy.
Should you wish to modify the property, conventional area wisdom is to just do so unpermitted. Boomers don't like construction because it increases supply and they want no supply, only demand, home price go brrrr. Environmentalists don't like construction because the more nature the better. Others don't like construction because they make it their business to set the vibe of the area as static and frozen. These political interests culminate in a construction permitting process that basically autorejects everything, paradoxically increasing public danger because everyone now does everything unpermitted.
Even the famously wealthy Steve Jobs ran afoul of it and couldn't buy his way out. He had a property he wanted to modify but they wouldn't let him touch it at all. So he just let it sit and rot to make a point. Ultimately the government agreed his plan was better than a rotting house.
It just doesn't stack up. This world is cooked. The steak used to be medium rare once upon a time, but now it's pure charcoal.
https://www.zillow.com/homedetails/221-Woodbridge-Cir-San-Ma...
$4.888
https://www.zillow.com/homedetails/86-Rittenhouse-Ave-Athert...
That's not investing, that's buying. Buying means the buyer gives $10m to the previous owners, at which point as you say, the previous owner owns 0% and the new owner owns 100%. But the company is in the same position as it was before -- the same amount of cash on hand as it did before.
For investing, you're putting cash into the company's account, which raises the total value of the company.
Value of the company before investment: intangibles + pre-investment cash - debt = $10m
Suppose I own 10% pre-investment; 10% of $10m is $1m of estimated value.
Value of company after the investment: intangibles + pre-investment cash - debt + $10m == $20m
Now I own 5% of $20m, which is still $1m of estimated value. The investor owns 50% of $20m, which is still $10m of estimated value.
In practice of course, there are different classes of shares which end up being paid out differently.
Past performance is not indicative of future returns. Do you know anyone still running a risk parity 60% UPRO/40% TMF (3x long S&P 500, 3x long 20-year Treasury Bonds) portfolio? That portfolio composition had massive returns, until the Fed started hiking rates.
The annual implied volatility of SPX is around 15-20%, if you want to withdraw 6.5% a year at 40 and have to restart your career at 55, be my guest.
A 40% drawdown on 600k is -240k which puts you at 360k, 6.5% of which is $23,400. Starts getting pretty tight if you need to sell assets for cash which reduces your future returns.
Most of the reasonable FIRE advice (e.g. https://earlyretirementnow.com/ quality) suggests a ~3-3.5% withdrawal rate, which has been measured using historical data way before the current secular market.
Is your take that even such withdrawal rate wouldn't work anymore, moving forward?
A tech enabled business needs gross margins north of 70% to be attractive from a leverage standpoint, unless revenue is scaling very rapidly. Without these there’s no attractive exit opportunities.
You do have to pay interest taxes and maintenance, whether that exceeds the rent for an equivalent property is another question.
Only way to get a nice house for 300k now is to work remote in some podunk town for a big city salary.
1. The neighborhood I grew up in in San Jose has 3, 4, or even 5 cars in front of every house. My working thesis is that despite being small, these are multi-generational homes, probably with the notional homeowners being the ones that were living there back in the mid-80s.
2. My aunt lives in a much nicer part of San Jose in the house that her husband inherited from his parents. Many of the other neighborhood homeowners are in the same situation, although there has been some flipping going on.
3. Three more boomers at the family event are all living in inherited houses, including one couple that has a pair of houses that they each inherited from their respective parents. They're not renting out the surplus, but instead have turned both into animal rescue sites.
All of these folks are grandfathered in to extremely low Prop 13 property taxes.
However then your interest rate is not 1%. The best I've seen is 30 year fixed, where you pay off your house is 2.5%.
I'm paying 0.65% right now, thanks to SARON going to 0.
It just does not make financial sense to pay it off even if could.
my wife doesn't drive and we wanted to have access to good public schools and good transportation. this is not a given if you go more rural. The postbus goes maybe every hour or so.
the lakeside communities near Zurich are great and all of our friends live in one of them (on the same side of the lake of course). not living here would have severe effects on my wife's and our kids' social lives.
The NHS has _many_ problems, don't get me wrong. But 3-4 years for "chronic pain surgery" isnt one of them. There are huge wait times, but 3-4 years is not representative. (Hip replacement times are ~4 months, much higher than it used to be)
Would I fly out to turkey to get a knee done? fuck no, half the problem is physio. Can you fly out and do it? you sure can.
This kind of doomerism is going to lead to farage getting his way and replacing universal healthcare for shitty half arsed insurance.
I miss knowing where the darkest place is for 50 miles in all directions. I never got to bike highway 1 from SF to Big Sur. My boyfriend and I would have an easier time finding jobs there. There’s better roads for car enthusiasts.
There was a lot of depressing tech saturation in the Bay Area, but there’s still good pockets of the pre-software culture around there if you’re willing to live towards the edges and look for the weirdness.
50 mins - what on earth? Take the train. Even a bicycle would be faster.
- Jan 2021: 3M seed round
- Jan 2024: Series B valuing the company at 500M
That's 3 years of vesting below a 1B company valuation, and 75% of a typical vesting schedule. There was plenty of opportunity to buy when valuations were low.
There's also 83(b) election that allows one to prepay tax liabilities on stock options before they vest.
Not buying stock options or doing a 83(b) election is also a bet that can place a cap on losses if the company goes downhill, but the risk flips if everything goes right.
Yes, there is plenty of opportunity to exercise when valuations were low. But that also means you're buying before there's clear evidence that the company will be successful. It also still means you're out the cash to exercise the options before there's a market for those options and before you know that the company will actually go public and not crater for whatever reason. You also have no idea how much your shares will be diluted.
Yes, exercising on day 1 optimizes your outcome in the case of a successful exit. But it is absolutely comically a poor choice for the 95% of cases where your equity ends up being worth next to nothing.
In other cases, you may be later but have a higher strike price (expensive-ish to exercise), but its at least close to the valued price and in that case you can exercise without a major tax hit. But again usually people learn this after the valuation goes up and there's no way to go in reverse. So best we can do is share information here I guess, and perhaps advocate for some kind of regulation.
Waiting until the company is worth billions of dollars before buying its stock is one of several options available, and each has its own risk/reward profile.
And he calls them vested shares though, not vested options, though maybe he's incorrect.
And it's not like you forfeit them instantly after leaving anyways. You usually have at least 90 days. And the fact that the value of the company is so much lower now is favorable, if you think the value will recover.
But again, none of this has anything to do with the "1% payout" here that is still totally unexplained.
But how could Google require that?
> If you didn’t agree then you would be left holding your shares of a company that is now gutted.
Which is what is sounds like he wound up doing anyways? Which I don't even understand why.
At the same time, if it's an ISO option, there is no assessment of ordinary tax until the stock is disposed. If there's a merger and the proper forms are followed, you can be issued stock from the acquirer that retains the basis (the strike price) of the original shares. If the forms are not followed, the acquisition is a taxable disposition.
There's a credit for the difference between AMT tax and ordinary tax on ISOs, but it can take many years for that to fully work out, and you have to have paid the AMT in the meantime.
Early exercise with 83(b) at time of grant (or while the value hasn't changed) or exercise-and-sell make the taxes make the taxes simplest, but tax simplicity isn't always the best strategy.
Its different for vesting. Othrrwise even more toxic greed and tax avoidance would occur.
Even something like living in the countryside domestically would worry me (that is, longer times between calling for help and it arriving, then time to be transported to a medical centre or hospital, and then probably getting transported to the city anyway for access to advanced medical care).
I'm a digital nomad and have been traveling full time for 7 years now. It's great, it's a good balance of work/life balance but one thing you slowly start to notice is when you leave your country, no matter if you learn the language or how much integrate yourself into that country, you will always be an outsider to the majority in that country.
As an american you will always be a Yankee, Farang or Gringo and will carry the weight of the US collective.
Being a nomad is basically asking to start from scratch everywhere you go.
Outside of Canada and the UK this isn't true.
> Because incentives are stacked against delivering to the patient and for increasing spendings.
Germany, The Netherlands and Japan all have regulated competition models.
> It’s the tragedy of the commons.
Public healthcare isn't a free for all, its regulated, actively managed and budgeted.
> Public healthcare isn't a free for all, its regulated, actively managed and budgeted.
Not what I mean. It’s racist. Public jobs are being reassigned in a racist way to help whoever the currently-elected leader wants to favoritize, and, as the NHS ad says: “This is us, now”, clearly demonstrating a no-whites ideal (NHS’s intentions, not mine).
Public health funnels money from people who paid to get coverage, to, on one part, those would be rejected in a normal system (non-insured people) because it’s easier to say yes when it’s diluted; to to, for the second part, people self-selected by the group of currently-employed people, ie in the UK it means that normal people are selected with all criteria but protected classes (the legal term, “protected classes”, I mean) have priority for those jobs.
You may pretend the NHS is not racist, but the NHS actions speak for themselves.
8% of your waking life going to and from work without getting paid for it is dumb
Yes, housing is more expensive. A lot more. Everything else is way cheaper.
I will say though that travel is the main one that’s obviously independent of where you live (at least mostly). So that’s kind of nice.
I've lived a thousand lives, spent most of the time as true quality time with people I love, and I still have a few years left in this decade of my life.
And I'm still further ahead, financially speaking, than >99% of other people my age. (To those asking, I tripled down on life after getting a remote job.)
The one year I spent 9-5 in an office as a traditional SWE was by far the quickest and least eventful year of my life. Also probably the saddest.
I'm very glad I just said "no" and walked away and simply lived. It was absolutely worth the risk. I would never trade these years for the ability to buy a house in the Bay Area suburbs.
I probably will be able to do that anyways, if I want to, even though I don't.
https://maps.app.goo.gl/2aEXsdH9hU3o4SZw5 (winter, March 2012)
4br in only 2k sqft? For 2M? Please...
At the executive level they may not want you holding shares in a direct competitor because it presents a conflict of interest. But even then you generally have a period to divest.
Can nobody explain what the actual demand was here? What did Google offer vs. what did they demand, and why? And why would Google be buying your shares...? None of this makes any sense the way it's been presented.
Yes, the option technically exists. But without perfect foresight it’s not a good option. It’s not even an okay one. It’s an exceedingly bad one in most cases.
Acting like this employee was silly for not dumping a huge sum of money into company shares before it was in a position to succeed is flatly ridiculous.
Stock options are—as they currently stand—a lottery ticket that startups dangle in front of people’s faces that allow candidates to believe they will get fairly compensated for their labor, but with so much wiggle room that the company rarely has to ever make good on it. And I also say this from personal experience as employee. I was an employee ~#600 of a unicorn that went public. I ended up in something of the sweet spot of equity: most of the people who joined before me left before me and got less than I did in the end. Most people who joined after me got less equity at a worse strike price than I did.
I did pretty good. And this was a rare raging success story. Most people did worse than me.
Once again we’re talking about employee #2, exercising early would not have been that expensive! They had access to a strike price and low tax liability that the vast majority of later employees would ever see. You are correct in that most shares in startups are worthless, but that’s orthogonal to exercise price and tax consequences.
The calculus changes if/when the company becomes a unicorn, but by then the risk profile is much more favorable than when it was a scrappy startup, and returns are lower.
> I also say this from personal experience as employee. I was an employee ~#600 of a unicorn that went public. I ended up in something of the sweet spot of equity: most of the people who joined before me left before me and got less than I did in the end. Most people who joined after me got less equity at a worse strike price than I did.
Well one has to stay long enough to vest in order to keep the equity, being early isn’t enough.
I don’t know your specifics so maybe you did make it out better than earlier employees, but some tricks companies use once they hit unicorn status (and have hundreds of employees) is stock splits. They want to pad their share grants for newer employees to make it seem more attractive and make the strike price lower. Of course earlier employees that exercised and left get their shares multiplied too.
Exercising early almost certainly would have cost hundreds of thousands of dollars. For employee #2 of a startup, you’re almost certainly already working for mostly equity and not salary.
You are high as a kite if you think it’s reasonable to dump large sums of money into a five-person company while getting paid peanuts in return.
I'm used to seeing yearly or every-other-year streetview updates for locations I look at regularly.
That said, might be mixing up my broader impression with the interval of satellite photo updates in the google earth history. (but my bay area neighborhood does indeed have streetview history updating every year or so; obviously this is probably on the high end given proximity to tech companies...)
Plenty of people live in any city with less than that, but it is below the average income in many nice counties in the US.
You’re basically criticizing the guy for not having perfect foresight, when the real issue is that startup equity is trivially manipulable by upper-level management. It’s a carrot they can dangle in front of people while only rarely having to pay even a fraction of what was promised in the rare event of a profitable exit.
How does my second sentence say the prices are reasonable? My second sentence is saying chasebank's friend did something that doesn't make sense. It's not saying the housing market in Santa Barbara is reasonable.
Are you intentionally ignoring you said "nice" for what most would consider to be a source of ridicule (4BR SFH in 2k sqft). BTW, you haven't made an argument about real estate differences. The smaller home might be a better deal.
And you're using a turn of phrase that is the opposite of your apparent intent.
I don't think most people would consider it a source of ridicule. (BTW, you omitted 279sqft.) In all the places I see discussing it online, I see tons of people saying 2279 sqft is a normal or even large size for 4BR, and only 1 person saying it's small[1-6].
The average bedroom size in the US is 132 sqft. The average master bedroom size is 224 sqft[7]. Even if we go with 224, with 4 of those, that's 896 sqft used by bedrooms, and 2279-896 = 1383sqft for non-bedroom stuff. I don't see why that's so bad.
>BTW, you haven't made an argument about real estate differences. The smaller home might be a better deal.
chasebank described it has a "shithole". So I assumed the real estate was bad. If chasebank was describing a house on a super valuable piece of land, chasebank should have mentioned that. It would be an important piece of information that would completely undermine chasebank's point. It would be misleading for chasebank to leave out that information, so I assumed chasebank didn't do that. Anyway, the real estate of the one I linked to seemed fine to me.
[1] https://www.familyhomeplans.com/4-bed-3-bath-house-plans-hom...
[2] https://www.coohom.com/article/how-many-square-feet-in-a-4-b...
[3] https://www.reddit.com/r/HousingUK/comments/vq293z/after_gen...
[4] https://www.quora.com/How-many-square-feet-is-a-4-bedroom-ho...
[5] https://houseplanfloorplan.quora.com/How-big-is-a-typical-4-...
[6] https://www.coohom.com/article/how-many-square-feet-in-a-4-b...
[7] https://www.crddesignbuild.com/blog/average-bedroom-size/
For the latter, isn't it odd how you cherrypick and dismiss?
1. Spuriously apply national averages (including a UK forum!!! LOL) to a way above average zip code
2. And conveniently dismiss another HNer's conclusion because they...didn't provide a fact needed for an argument that YOU are trying to make and could research yourself? This is unreal.
>"Yeah, even though I didn't ask, the defendent didn't tell me they were innocent or not, so I will dismiss further review and assume they're guilty."
You said "what most would consider to be a source of ridicule (4BR SFH in 2k sqft)". You didn't say that it would only be a source of ridicule in certain zip codes.
Whose conclusion am I dismissing? chasebank's? I think chasebank's conclusion is that housing is too expensive. I agree with chasebank there. I'm not dismissing that.
Shithole is probably overstating it, but $2.2m doesn't get you much in more expensive Santa Barbara neighborhoods. Here's a 3/1 1000sq foot house that sold for $2.2 in June that better represents what the parent comment was referring to:
https://www.zillow.com/homedetails/2430-Mesa-School-Ln-Santa...
A 4BR 2k+ sqft house in any of the good neighborhoods in Santa Barbara ( Mesa, San Roque, Riviera, Mission Canyon, Samarkand) would easily be closer to $2.5-3 million.
For example: 1900sqft for $2.6: https://www.zillow.com/homedetails/2818-Valencia-Dr-Santa-Ba...
2100sqft for $2.7: https://www.zillow.com/homedetails/3117-Calle-Noguera-Santa-...
800sq ft for $1.6: https://www.zillow.com/homedetails/512-E-Islay-St-Santa-Barb...
That first one you linked to must be priced based on building something new there. The Zillow listing even has pictures of plans for a new house.
Here's a 2270sqft 3BR3B for $1.9M that I think is actually in Santa Barbara (looks like the edge of Riviera), although it doesn't really have a yard: https://www.zillow.com/homedetails/533-Conejo-Rd-Santa-Barba...
That Conejo rd listing is less expensive mostly due to fire/landslide risk and the elementary school district.
How ironic that you now backtrack when someone else makes my point. You did no research, made a spurious claim, then doubled down.
That's not the same point as sblocal123's point.
Regarding the real estate location point, yes, you and caminante made the same point. caminante made the point convincingly and you didn't. There's nothing ironic about me changing my mind when someone makes a point convincingly.
You've embarrassed yourself.