They can't compete. They'll never be able to compete on the money front.
If you're a senior C++ lead dev working in the front office of an Investment Bank you can make 250k-500k/year.
If you join a startup as an early employee and get 1% equity , assuming a 10% chance of exit after three years, the company would need to have a $1 billion dollar exit for the risk-reward equation to break-even.
There are a lot of ex-finance developers in the startup world, but overwhelming they're there as founders, as that's the only way they'll get enough equity for it to be worthwhile.
Your risk reward equation doesn't account for preferences. There are a lot of folks out there that would be turned off by a 0% chance of a big exit, which is what 250-500K/year is. Every startup offers a tiny chance of fame and fortune that a normal salaried position lacks.
Even if you want a chance of a big exit, it makes more financial sense to just put 20% of your salary into angel investments every year.
Sure there are other factors at play such as lifestyle, corporate culture, etc. But when it comes down to hard money startups can't compete with investment banks.
It depends a lot on what the average Wall Street Firm would do with that programmer. Is the hacker going to be doing (for example):
1.) IT Admin stuff (Creating accounts, internal admin tools)
2.) Backoffice Dev (plumbing code to book trades, query databases, feed data to risk and PNL reporting tools)
3.) Infrastructure (writing fast code that talks to exchanges to trade autonomously, or writing tools to help people run lots of regressions, experiments, and simulations with ease)
4.) Desk Quant / Quant Dev (writing valuation models, trader UI, tools for trading, tech support for traders, structuring new products, building the grand unified system that processes financial instruments)
5.) Prop Trading (finding new ways to trade for profit; systematizing that into software)
I'd say anyone who is skilled at either 3,4,5 is going to generate more value to the Wall Street firms than what most startups budget for hacker employees.
That's really apples and oranges. In many ways, Wall St and startups don't want the same programmers, at least not as much.
Working on Wall Street--or most large companies for that matter--is largely transactional. You provide a service. You get paid for that service. You tend to get paid quite well to make up for the abuse you often end up taking. This is particularly true if you work in financial markets (as most Wall Street programmers do) where there are two kinds of people: traders and people who don't matter (being everyone else).
With a startup--particularly an early stage startup--you're taking a long term stake in the company, possibly a significant stake. If it's particularly early that stake but will largely be in lieu of a market wage (or any wage at all).
In my experience the profiles of the people in both categories (in an ideal sense from the company's point of view) don't quite match.
Wall Street is large, and there are many types of firms there. Technology is a lot more important in a lot of Wall Street firms now than they used to, and, at the hedge fund I used to work at, programmers were the first class citizens and made many of the large decisions. The startup type is the perfect fit for these places - they want people who, with little management, can make innovative tools from scratch that will earn the place millions of dollars. And they pay a lot of money for this kind of person.
With respect to recent grads (bachelors, master, PhD), if you have loans to pay off, the allure of Wall Street is significant and understandable as it puts more money in your pocket tmw vs. 99% of startups.
In the case of these grads, it's not an issue of profile but simple arithmetic that results in Wall St winning.
I would say that Wall Street is probably more appealing to experienced professionals than it is to recent grads. People have goals (e.g. comfortable retirement) and very real needs (paying the house, providing for family, etc.) that take money to accommodate. Most people would gladly accept a salary that allows them to reach these goals faster than most alternatives.
If you're a senior C++ lead dev working in the front office of an Investment Bank you can make 250k-500k/year.
If you join a startup as an early employee and get 1% equity , assuming a 10% chance of exit after three years, the company would need to have a $1 billion dollar exit for the risk-reward equation to break-even.
There are a lot of ex-finance developers in the startup world, but overwhelming they're there as founders, as that's the only way they'll get enough equity for it to be worthwhile.