[SomeCallMeTim]

$2M as part of a signing bonus seems like an "acqui" to me. It just wasn't enough for the author. Which is fine, but not exactly as much of a scam as he implied.

This article just seems to be a real world example of PG's essay this month about "don't talk to corp dev." [1]

[1] http://paulgraham.com/corpdev.html

[chii]

it's not a scam in the sense of an illegal scam, but it certainly is trying to prey on someone who might not know better.

If you are a lone engineer, but is capable of making a successful app, you have a certain aptitude for programming. This is useful to google. The recruiter is making a bet that this lone engineer is not business savvy enough to know how much their true worth is, and if the bet worked, google would've been able to low-ball hire a really good engineer. They failed this time, but you don't hear about the times this strategy succeeds, because those 'acqui-hires' might've even been celebrated by the "victim" as success!

[SomeCallMeTim]

$2M is a reasonable definition of "success" as far as I am concerned.

And the $300-$500k+ salaries that Google is frequently throwing at engineers these days are worth more than the marginal chance you'll make a multi-million dollar exit event.

So I'd hesitate to call anyone hired by Google a "victim."

[chii]

let's say you found a rough diamond in a mine (that you own), which if polished, could be worth $10 mil, but somebody offered you $2 mil for it. Do you still think it's a good deal to take it?

It's not the absolute amount that matters - it's how much they are "underpaying".

[SomeCallMeTim]

It's only a valid analogy if there is risk associated with polishing it.

If the diamond could be worth $10M when polished, but also could be worth $0 because of flaws you can't yet see, and there's only a 20% chance that it will be worth $10M, then $2M is exactly the right amount to take. And in this particular case, I'd take the $2M every time, because that's the exact expected value of 20% odds of a $10M valuation.

And when you have your own company, there is always some level of risk. The chance of $10M may be far less than 20% -- and there may be a 1% chance of $200M.

It's only if you think your diamond has either already been polished to the point of being worth more than $2M, or you feel your own odds of success at polishing are better than 20%, that you should say no to the offer.

The original author believed that, which is perfectly fine. He had previous experience with selling a company, and so he may have even been right.

But those with less experience may actually do well to sell unless someone with more experience is around to tell them they're sitting on a diamond mine that's worth way more than the offer. Or you can roll the dice based on your own appraisal of the odds; that's fine too.

I've actually been in the situation where I did say no to terms I didn't find good enough, but then later the company failed and I ended up owning 100% of nothing. So having them "underpay" for me would have ended up with me owning 40% of something at least, since they were going to fund it to the next level.

It's easy to take a look at the odds and guess wrong -- and it's also easy to be an armchair quarterback and tell people that they should have taken a chance instead of the easy cash. As a result of my experience, I'd likely lean toward the easy cash at this point, but feel free to make your own decisions as you see fit.