[gaius]

This is the dirty little secret of startups too. As an early hire you will work as hard as the founders, and take at least as much personal financial risk as them if it doesn't work out, yet with minimal exposure to any upside - so the sane options are, full co-founder, or double market rate salary to offset the risk. Not pennies and "stock options".

[jblow]

If you believe this then you have never run a company. Being responsible for a company is categorically different from being an employee at a company, even if that employee is very hard-working.

[angersock]

I'm not sure that you two are in disagreement--they are saying that precisely because being an employee is different from being a founder, an employee needs to make sure that their interests are seen to.

(this is all said with respect to an engineering position)

In an early-stage startup, you are likely to be building the product and doing at least as much useful technical work as the tech cofounder from whom you are taking some of the burden.

Moreover, because you're in a small company, you probably don't get benefits, and you probably don't get good pay ("After the next round!"), and you probably don't get much gear, and so on and so forth. The options you're granted may well not pan out, and even if they do they probably will be diluted into something equal to a holiday bonus.

That being the case, it makes great sense to look after your own interests.

This equation, of course, changes once the company is large enough to actually take proper care of its employees and pay proper market rates.

[MrZongle2]

Being responsible for a company is categorically different from being an employee at a company, even if that employee is very hard-working.

Yes, it is the difference between being a parent and being a babysitter.

Both are responsible for the health and welfare of one or more children, but the babysitter eventually gets to go home and be "off the clock".

Problem is, many small companies seem to think that the equivalent of calling up the babysitter at 2am to deal with a vomiting child is acceptable.

[jonlucc]

I thought it was standard at startups to offer company stock in exchange for small salaries for the first set of employees. If so, those employees with stock have at least some upside for the risk.

[Jemaclus]

True, but it's generally something like 0.25% equity (almost always <1%). So you're working roughly the same hours for a tiny, tiny, tiny fraction of the overall equity.

[SheepSlapper]

Not just that, the tiny piece of equity you do have is hypothetical "future money". I've been in multiple startups where you're trading salary for equity, and none of those stock options are worth the paper they're printed on now. You may get lucky and your stake actually becomes worth something, but those cases are the very, very small minority.

I'd take the extra $10k a year over stock 95% of the time, thanks. Or how about a matching 401(k)? Those are the kinds of compensation that show consistent returns right away, and aren't a roll of the (rigged) dice like employee equity.

[danielweber]

And if they ever need to raise money and you are not, at that moment, vital to the company, your 0.25% becomes 0.05%.

Assuming success at a $50 million valuation, you did all that sweat equity for 25K, while probably giving up a lot more in salary.

[webhat]

That's assuming you actually last in the company to collect on your investment, as may happen with vested equity.