| To add to this, so what if it is "$200K" ? Basically that is enough to completely cover one kids education at a state school, put down 20% on a million dollar house, or seed fund your next "big thing" for easily 6 to 18 months. On top of that you've been working for a salary that probably paid all your existing living expenses so you were not accumulating debt. That is a pretty cool thing. You are not allowed to comment further on this until you read this article: http://en.wikipedia.org/wiki/Opportunity_cost So, here's how to read startup and employee equity. Compare it to Wall Street. Yes, Wall Street. Forget whatever negative image you have of banks or hedge funds. Whatever negative thing you might say about those also applies to most VC-funded startups. (After all, most VCs are ex-finance guys, MBAs who didn't do well enough in school to get into stat arb.) 95% of startups have worse hours than IT or quant or S&T roles in banks. (Analyst programs are a different mess.) 95% of startups have no moral edge in terms of mission or management ethics. 95% of startups fire more quickly and with less severance (sometimes zero, plus a ruined reputation because shit happens when arrogant kids fall into power) than any bank. 95% of startups aren't giving more interesting work to non-founder engineers than large companies (being CTO or first engineer might be cool, but a typical engineering role is inferior) do. 95% of startups don't have the prestige for their more liberal titles/promotions to actually carry durable weight. So, there's literally no good reason to choose the startup ecosystem, unless you have a rare informational advantage, over Wall Street. Are there excellent startups out there? Yes, there are. I would argue that very few people have the skills necessary to tell the good few apart from the worthless many. In the successes, the typical employee equity payout, vested over 4 years, is the kind of bonus banks give when they're looking to fire someone nicely (i.e. the "we'll disappoint him out" bonus). Also, acquisitions are generally terrible for regular employees in terms of position, rank, etc. So you should literally think of liquidation as a severance, because the odds are high that the acquirer already has someone doing your job and he has the political edge. And $200k after taxes is really rare for an employee startup payout. That might be 98th percentile. I've seen lots of zeros in acquisitions considered "successful" by Techcrunch. It really is a fucking scam, but it's not just a problem with startups. Software people are terrible at looking out for their own interests. Engineers either need to become savvy and self-interested like hedge fund quants and get what they're worth, or bring back the out-of-fashion but powerful concept of collective bargaining. |
Consider for that there are more millionaires and billionaires in the California than there are in New York ([1] [2]). The housing market that is the Bay Area exists not in a small number of neighborhoods, but from South San Jose to Novato in Marin. One has to appreciate the wealth building effect of the industry if it can raise the median price of a single family home over a thousand square miles by $500,000.
Yes, some acquisitions suck, and yes, even some IPOs suck, but no other industry puts as company value into the hands of the rank and file employees as startups do.
[1] http://www.census.gov/prod/2003pubs/p70-88.pdf
[2] http://www.netstate.com/states/tables/state_millionaires_air...