[Balgair]

Thanks for the comment, but 'investing' 100k, a sum FAR more than almost anyone reading the comment will ever see in their own bank accounts, is not 'investing' for most of us. Diversity and spreading the risk is bread and butter for almost all of us. Throwing 100k into a company you believe in' is a greater gamble than almost any reader could ever justify to their spouse and expect to stay married. You live in a very different world.

[arbitrage314]

Yeah, good point--I'd recommend investing only $10k or $20k if possible.

One of my points, though, is that you are effectively investing $100k in the company by taking a crap deal to work there (e.g., via a $25k pay cut over 4 years of work). For that $100k, you're getting much less than you would get by simply straight-up investing $100k.

[tostitos1979]

Would you mind sharing a few things:

- age - Bay area/NYC or somewhere else? - how do u deal with taxes, 401K contributions and still have 100K leftover?

I am possibly overcontributing 401K (maxing the 18K allowed by the IRS) and certainly overpaying rent (bay area :[). How the heck does one manage to save/invest 100K even at that salary? As a soon to be father, I need to get my act together asap.

[arbitrage314]

I'm 30 years old, and my rent is about $1200/month (I'm married, which helps cut down on costs).

After taxes, $250k becomes $150k. After rent, food, staying alive, some travel, etc., I'm left with about $100k disposable per year. Like most of you, I don't really have nice things, fancy clothes, etc.

I would continue to max out contributions to retirement accounts, though! You can invest in startups via IRAs and Roth-IRAs (I have done it).

[0mkar]

Thats interesting. Can you please share how you invested in startups via Roth-IRAs? I am exploring ways to do something similar.

[arbitrage314]

I used a Pensco self-directed IRA:

https://www.pensco.com/

[Balgair]

I see and agree to your point, taking that kind of cut in salary is an investment of that magnitude. However, there are not many people that could even afford to put 2k, let alone 10k into a company. For most, putting in the time to help a friend, possibly valuing the time at 10k and giving that to them for free, is a much easier and safer bet. I know that makes little sense in terms of dollars, but no-one I know of, save some very busy consultants, have anywhere near 10k to 'invest'. However, most folk I know of have a few weekends and hour after work to 'invest' and help a friend out, possibly worth 10k in time.

[nostrademons]

Take a look at this thread:

https://news.ycombinator.com/item?id=10758278

[driverdan]

It's like you didn't even read his full comment. His point was that he makes enough money that he can invest $100k a year and still make the same salary he'd get at a startup.

> a sum FAR more than almost anyone reading the comment will ever see in their own bank accounts

You're joking right? Engineers make six figures and can easily save $100k if they try. Your retirement account should have seven figures by the time you retire.

[dragonwriter]

> Thanks for the comment, but 'investing' 100k, a sum FAR more than almost anyone reading the comment will ever see in their own bank accounts, is not 'investing' for most of us.

To the extent that is true, neither is taking a salary hit on that order in exchange for equity from your employer.

The contention GP makes is that even ignoring the opportunity for diversified investing, from a financial standpoint, getting a job with an established company is strictly better than a startup in most cases, since you can exceed the pay and equity (and equity in the startup) of the startup job with the bigco job.

That the bigco job also gives you the option of diversifying your equity investments to manage risk, while the startup job does not, reinforces, rather than counters, that argument.

[bryanlarsen]

Many people who join startups have "invested" an opportunity cost of similar magnitude. If the company they're working for goes south, they've lost the better salary they could have had at the larger company, they've lost their job, they've lost their health insurance, they've lost their equity they have in their company, et cetera.

That doesn't seem like much in today's hot market, but ask anybody who went through a crash how much a stable job is worth.

If you're not comfortable investing ~100K in a startup, you probably shouldn't join one.

[morgante]

> Thanks for the comment, but 'investing' 100k, a sum FAR more than almost anyone reading the comment will ever see in their own bank accounts

Assuming that the majority of HN readers are software developers, I actually don't think that's true.

While I agree that investing $100k into a company is a big gamble, it's important to realize that's precisely what you're doing if you give up a BigCo job for a startup one with a $25k pay gap and vesting over 4 years.