[epicureanideal]

This doesn’t seem possible. Startups are raising Series A rounds of 15-20 million routinely. A quarter of that would cover a reasonable number of senior engineers for a year or two.

But just in case it is possible…

Maybe they should try offering meaningful stock packages, rather than 0.1% and less?

Meaningful as in 0.5 to 1% for a senior engineer, 4-6% for a manager, until salary improves.

Also, try offering stock with no vesting cliff. It’s not smart to trade salary for stock when you might leave before the cliff through no fault of your own. So smart candidates often round the value of stock to $0, especially before the cliff.

[sokoloff]

You shouldn’t be giving managers 6-8x what you offer senior engineers at a startup, at least not in a startup where engineering matters.

If smart candidates are rounding the grant value down to zero, smart companies will not seek to give grants that are multiples of the current size. (That’s giving away $100 bills to someone who values them at less than your cost.)

When you’ve raised a $20M round and have an employee pool that is 10-20% in total, you don’t have many 1% grants to give…and you have exactly zero 6% grants to give.

[Hermitian909]

> When you’ve raised a $20M round and have an employee pool that is 10-20% in total, you don’t have many 1% grants to give…and you have exactly zero 6% grants to give.

This is true, but the percentages illustrate how silly many investors are being about the resources necessary to put together a good engineering team.

I've had offers from startups with well known VC backers who wanted me specifically. They'd tell me their upper bound on cash, and then assuming I thought they had a decent chance, I'd calculate how much stock I'd need to make for the expected value for working for them to be at least as good as at a big tech company. Generally the calculation came out to 4-6% of the company per year.

That number could be lowered if I had access to the cap table or were being issued some kind of preferred stock, but no one's willing to do those things either.

Cash is cheap and labor is expensive but investors still want a way better deal than any engineer could dream of.

[xyzzy21]

This is why I left Silicon Valley and founded my last company FAR, FAR from it. Silicon Valley is 100% OVER. It's jumped the shark. It's overdone and needs a fork stuck into it.

I sold the company 3 years ago. My latest company is doing so much better than it could ever be possible if in Silicon Valley in terms of "R&D budget/Investor capital".

It means we'll attain things that Silicon Valley startups with exactly that kind of personnel compensation requirements NEVER WILL.

[swman]

Where u based now?

[Hermitian909]

SF a good senior can run you 350k/year not including overhead, add on overhead and you can quickly be looking at costs of ~500k per senior per year.

Vesting cliff isn't the only problem with stocks either. Common stock holders can easily get screwed over when raising or during any liquidation event that isn't an IPO or direct listing. The disparity in treatment means as an engineer you need to value stock at 1/10th face value as a rule of thumb.