$80k for how many years of work? Unless it’s one, I’m with the parent. I’m sure it’s all legal and ‘equitable’ according to the terms, but that’s peanuts of a return for somewhere between 4 and 7 years of work (based off a typical vesting schedule).
We don’t currently know what their salaries are, but it’s pretty common for startup salaries to be 50-60% of normal salaries. The rest is typically LLC stock grants. It’s done this way with the promise of “when we sell” those stock holders will make bank. $80k isn’t ‘bank’. Especially if Baremetrics was following the startup-standard salaries.
Anyone taking a startup job on a 50-60% of a normal salary without several percent of the shares is doing themselves a massive disfavour.
Most of my startup jobs have paid market rate. The shares and options have compensated for the risk, not a lower salary.
I'm sure some accept lower salaries, and certainly the salaries won't be comparable with the very top end of the market, but most people don't work in the top end of the market.
A startup that tried talking me into a massive cut without offering me basically founder-level share amounts would be an instant red flag.
All indications are that they were operating on a profit basis, not a growth basis, so I think it's a poor assumption that anybody was being paid a half-salary. As the post states, they're keeping their same compensation going forward, and all are choosing to stay, suggesting it's very satisfactory, and has been all along.
I mean, that's somewhat my point? They were not pursuing rapid growth. From the post:
We’re also a company that has purposefully operated right around breakeven for years. So, unless you’re a “strategic acquistion” that throws acquistion multiples out the window, a slow-growth software company without lots of profits and a product that’s technically quite complex is ultimately just not going to get a huge multiple.
It's peanuts, but it's also REALITY. Few people get big windfalls working for startups as employees or even founders, but maybe you get a little bonus on top of your salary if there's an exit.
Few employees may get a windfall in reality, but it doesn’t make it easier to see (nor does it justify the founder’s choices).
Those employees are just as responsible for the company’s success as the founder is; it sucks to see them get shafted while the founder walks away with “fuck you” money.
Agreed, which is why it's good that this stuff is being shared. It's a datapoint to consider for those of us as we make career choices. But let's face it, if we are not founders, then we are just "the help".
And without “the help”, most founders (OP included) won’t make it to the sale. You can’t scale without “the help”. You can’t grow your market without “the help”.
To badly paraphrase someone: “The idea isn’t what’s valuable, the implementation is.” That implementation is probably >90% thanks to “the help”.
There's a sense of entitlement here that's not sitting well with me. Don't get me wrong, I think employees of a "startup" deserve to get some sort of payout during a liquidation event, but I think that payout should be directly proportional to how much risk was assumed.
Did they take a full standard salary? (Doesn't have to be SV 100k+ salaries, but standard for whatever is paid in their area). Did they do more than just code? etc etc
By your logic, the butcher who worked for market wages in a meat processing company should get a big pay day because Nestle decided to buy them.
It's all good until founders understand that "we are just the help". They are the ones with the most risk, and they cannot simply walk away to a new job if they don't like how things are going.
But a lot of founders put too much weight on early employees, require working as much as the founder, or require to take responsibility in things that far outreach what they were accepting to when signing a contract.
None of his employees were there that long from what I can tell. The initial employees got laid off I think 4 years ago and were probably there 1-3 years (who knows if any bought out their equity). Current employees were there 1-3 years. Only two current engineers from what I can tell. It also depends on how much salary they were paid as many people will take cash over equity.
Most startup employees don't even get 80K. My last "exit" as an early employee was barely 20K. I doubt my current startup will be any better. I look at this as a "bonus" and not anything that was expected. The average startup employee will be lucky to get non-zero.
If you want "returns", you're better off getting a stable, higher paying job and investing the excess in public markets. You have diversification and liquidity.
So was the founder. SV level salary, per their words.
And, as I've said elsewhere, startup salaries are rarely on par with the industry average. Working at a startup is typically sold as "you'll be paid less, but if we sell you'll get a payout to make up for it".
It is pretty simple though, either they negotiated some stock based component to their compensation when they started and would be getting payout, or they didn't and they have been fully compensated by their salary.