[tomatohs]

It's not 2010 anymore. Most startups can't even attract "the best engineers" much less hire them.

This is the late game, why would an engineer work for a fraction of a percent of equity and a below market salary when they can take a job at FANG?

You've got to be offering something really, really valuable like remote work, an interesting problem, and/or a new experience. Otherwise the math doesn't math.

[indoordin0saur]

Engineers don't really care about equity anymore because they've been burned so many times. The big payouts from a successful company are not necessarily guaranteed the way they were pre-2015 or so. It has become too common for there to be behind-closed-doors dlilutions and investor-only exit opportunities. It has become very unwise to trust anything beyond real cash wired to your bank account.

[rachofsunshine]

Author of the OP here - to put some more empirical backing to this, virtually every single engineer in our candidate pool values illiquid equity at 20% or less of face value, and about one in three give it no weight at all.

Totally off the topic of the thread, but it's why I do things differently with the people who work for me. I'm the sole owner of Otherbranch, but I pay out a percentage of profits over certain thresholds (between 25 and 75%, rising at higher levels of profit) to the team. Keeps things concrete and aligns incentives with building something that works today rather than obsessing over a hypothetical exit.

[eszed]

Love that compensation plan. I wish my (and every) company did that.

[rachofsunshine]

Yeah, so did I. Being both a ride-or-die leftist and the owner of a company is a weird place to be sometimes, and it's basically the way I figured I could best implement the world I want to see inside the world we have.

[jcalvinowens]

Every single solitary person I've personally known who worked at a successful startup got screwed out of their equity somehow. Literally every single one.

[cmrdporcupine]

I worked at one in the 2010/2011 time frame where I did not, ironically one where I made no effort at all on negotiation on options and assumed the options would be worth zero. A year later Google bought us.

I didn't get "I'm retiring now" money, not even close. But consider I expected nothing, was only a senior-level IC there for a year, and remained an IC after, it made appreciable change in my life and got me a good paying job at Google after.

But I think in that case it had more to do with the parties involved (our management were great people, and Google was motivated to treat us well).

I'd love to replicate this experience, but it ain't gonna happen.

[indoordin0saur]

Yup. The stories of old, where an engineer would grind for a decade then have a nice seven-figure payout to buy a home seem a remote memory. I'm not sure what happened because successful start-ups still exist and it seems like somebody is profiting off of acquisitions and IPOs.

[BrandonM]

Just to add a counterpoint, I was hired as employee #3 in 2011. In 2020, I was able to sell 5.8% of my stake for $200K (as part of Series C). In 2021, I sold another 4.4% for $500K (Series D on terms too good to refuse). I still hold equity or options in nearly 0.5% of the company (which is still private).

My wife and I used about half the proceeds of those sales to buy a house (cash offer) in late 2021.

I don’t know what proportion of early employees get screwed, but people who do well are usually smart to avoid posting publicly about it (and I am apparently an idiot).

[indoordin0saur]

> employee #3 in 2011

Maybe I'm bitter from getting burned but I don't think this is really counterpoint. Employee #3 you're just shy of being a co-founder and 2011 was an era where equity grants were real and companies weren't yet so clever about handing out Leprechaun gold.

EDIT: Random aside, but I looked up "leprechaun gold" and I guess the trope of a gold-like substance that disappears from your pocket when you're not looking is actually from Harry Potter and not a part of the traditional folklore.

[SpicyLemonZest]

It still happens all the time. It's just in an awkward in-between, where it's neither so uncommon that it's worth comment in news stories nor so common that most people in tech know someone who's gotten it. The Figma IPO surely minted dozens of millionaires, although I guess their lockup wouldn't be expired yet.

[thinkingtoilet]

I was working for a large company with great pay and incredible benefits. I was fucking miserable. I took a 35% pay cut to go to a small company with basically no benefits. I'm so much happier now. I live in a rural area and work remote. I live reasonably. I don't need all the money I can possibly get.

[Keyframe]

why would an engineer work for a fraction of a percent of equity and a below market salary when they can take a job at FANG?

Once you hit a few million in the bank, have a house, priorities kind of shift. Not for everyone, but for those that would work elsewhere for reasons not money.

[cmrdporcupine]

The problem you'll find (I've found) in this case is that management in many of these "startups" expect a certain kind of ... ahem... motivational/authoritarian structure ... that lacks effectiveness or sense with someone who has paid off their mortgage and is mainly there in order to ship things and enjoy crafting software.

Put it another way, there are people in every company whose reasons being there can conflict with the motivations of an engineer with the priorities you describe. Often those people end up being your manager.

[Keyframe]

Doesn't have to be a startup. Can be something _not your own_ but aligned with your interests. Maybe you care about the environment, or you're fascinated with weapons and don't particularly like people or whatever.

[cmrdporcupine]

It's always been the case that FAANG or whatever are not always the "best" home for the "best" engineers. Many do not/did not feel comfortable there, especially as they became more and more corporate and slow.

But unfortunately the answer now is that "best engineers" can't work there either because the layoff / employment-squeeze is in full swing.

You're right that the equity packages offered by startups to engineers are generally insulting. Every time this has come up in negotiation in the last few positions I've interviewed for the founders won't even tell you what % of shares they're offering, nor any sense of what the real value is, just pretend nonsense.

[adw]

In my experience startups have as much bullshit as FAANG companies, it’s just different bullshit.

[cmrdporcupine]

Absolutely, I agree. A few years ago I walked away from 10 years at Google hoping to rekindle some excitement in exchange for losing out on money. I hated the way things ran at Google and only lasted there so long because of the money.

So far I've mostly found different (often worse) kinds of dysfunction and not really much better velocity.

There are broader dysfunctions in our industry.

[datavirtue]

Everyone struggles to keep top talent engaged anyway. You can't move fast enough and don't have any problems that need fixing (other than the crippling tech debt you managed to accumulate already).

[mmmmmbop]

In hindsight, would you have stayed at Google?

[cmrdporcupine]

Probably. I was going crazy working there, I grew to really dislike it. But from a purely selfish $$ POV, it's likely I would have got caught in one of the rounds of layoffs or been able to take this latest voluntary layoff package.

Unless the frustration led to bad performance reviews, which could have happened.

My mental health would have suffered, but holding on another 1-3 years would have probably led to me being 5 years closer to early retirement.

It was also 2021/2022, when the job market was completely bananas. The temptation to leave and get a decent paying remote job was very high. And at the time I felt Google was doing a very poor job of remote work, at least on the teams I was on. And they made the hybrid in-office unpleasant (floating desks, nobody else there, just a weird vibe).

Hindsight 20/20, etc.

[kridsdale3]

My story is the same as yours, and the same timing, but it was Meta. I missed out on a LOT (!!!!) of money by quitting, but I don't regret it at all. The place was rotten.

I'm actually now at Google and things are just fine and peachy.

[mathiaspoint]

Large corporations are probably the worst place actually. You get slotted into some random project treadmill (which will be completely different from whatever position you interviewed for) where most of the decisions are made by middle managers at least one or two levels above you. Going out of your way to solve problems will be ignored at best and my even result in a reprehend.

These places are for people who hate thinking but are good at pretending otherwise.

[kridsdale3]

Top Talent won't be leveled such that PMs can be 1 or 2 levels above. They'll be high enough that the project plan heavily consults them from inception.

[OhMeadhbh]

Because FANG companies do not attract "top talent." They attract "very good talent," but typically talent that requires infrastructure that doesn't exist at startups. Daryl Havens is the exception that proves this rule, and you are not Daryl (unless you are Daryl and in which case, "Hey Daryl! Let's meet up sometime and chat about VAXen.")

[senko]

Neither do scrappy startups, because they don't have the money.

Top talent that accept below-insanely-great pay start their own startups.

[OhMeadhbh]

Yup. It's somewhat rare to find "top talent" at a startup, but more because many modern startups are stupid, existing only to suck from the VC teat. In my day... Be was a "startup" and Dominic and Andy were "top" talent. (and wasn't Dianne Hackborn at Be back then?) NeXT was a startup once and Avi Tevanian (despite my many, many technical disagreements) was an EXCELLENT engineer. RSADSI was a startup an Steve Dusse and Bob Baldwin were TOP talent.

I think after the dot-com run-up, "startup" often implied "unprofitable idiot idea that looks plausible long enough to convince VCs to use your company as a demonstration of the greater fool theory." But I said "often," not "always." The critical and vexxing part of this is it's so hard to figure out which idiot ideas are profitable before the VCs shower a small cadre of Stanford GSB grads with cash.