Who really gets hurt when startups blow up, and what to do about it(medium.com)
medium.com
Who really gets hurt when startups blow up, and what to do about it
https://medium.com/@stuartawillson/therohnos-who-really-gets-hurt-when-startups-blow-up-and-what-to-do-about-it-2110330d7880
57 comments
Interesting co-workers is a big one. Very hard to vet before accepting a job, however. You won't know how uninteresting they are until after you start.
YES. This is impossible to gauge during an interview or even within the first week on the job. The only way to de-risk this is to have known the team members for some time prior to working with them (hence Buffer's bring-your-own-team experiment).
To some extent you can at least gauge management's attitude to hiring in the interview. Are they hiring anybody they can get? Or are they being choosy? If the latter, what is it that they are looking for? Do you feel confident that they can discriminate and find those people?
Some questions I recommend asking are: What attributes are you looking for in candidates? Have you ever hired someone and wished that you hadn't? How do you resolve that problem? What are the best attributes of the people on the team for which you are hiring? During this interview process, you are obviously trying to make sure I'm a good fit for the team. How do you normally recognize this?
The last question is quite cheeky because you can then change your behaviour to what they are looking for ;-) But the main thing you are trying to discover is: Have they thought hard about their team composition and do they understand what it is they want? Do they hire all the exact same people (good if you like that kind of thing, but potentially very boring)? Have they thought about the difficult problem of recognizing the attributes that they are looking for?
Some questions I recommend asking are: What attributes are you looking for in candidates? Have you ever hired someone and wished that you hadn't? How do you resolve that problem? What are the best attributes of the people on the team for which you are hiring? During this interview process, you are obviously trying to make sure I'm a good fit for the team. How do you normally recognize this?
The last question is quite cheeky because you can then change your behaviour to what they are looking for ;-) But the main thing you are trying to discover is: Have they thought hard about their team composition and do they understand what it is they want? Do they hire all the exact same people (good if you like that kind of thing, but potentially very boring)? Have they thought about the difficult problem of recognizing the attributes that they are looking for?
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As always, "Don't believe in money that isn't on your bank account"
Your landlord and your grocery store don't accept equity as payment. You shouldn't either. Except maybe as a neat-o bonus.
Your landlord and your grocery store don't accept equity as payment. You shouldn't either. Except maybe as a neat-o bonus.
I think we should do as much due diligence and reference checking on a company as they would do on us:
* Dig into LinkedIn to find mutual connections and drop them a note.
* Check out Github, Hackernews, and whatever communities might be relevant.
* Look up and attend conference or meetup presentations from their staff.
* Check out what kind of events and causes they attend, sponsor, and promote.
* Contact support (anonymously?) with a legitimate question/issue.
* Dig into LinkedIn to find mutual connections and drop them a note.
* Check out Github, Hackernews, and whatever communities might be relevant.
* Look up and attend conference or meetup presentations from their staff.
* Check out what kind of events and causes they attend, sponsor, and promote.
* Contact support (anonymously?) with a legitimate question/issue.
Interesting that the author mentions disclosing financial performance data but not capital structure. Many startups attempt to induce employees to trade salary (or time) for equity, without making it easy or even possible to understand the company's capital structure, i.e. how many preferred shares have been issued, what the preferences are, etc. I was recently recruited by a startup that made noise about my trading salary for equity, but had been through four institutional rounds. I wanted to know what the preferences were and what would be left for the common if the company sold tomorrow at various valuations. They brushed me off and I haven't heard from them since. If you're going to ask me to basically invest in your company by either working for less money or working longer than usual hours then you had better be prepared to disclose your capital structure. As a former founder myself, and someone who is probably older than the average startup employee, I know to ask these questions. The majority of younger colleagues whom I have discussed the issue with don't even know what I'm talking about.
I advise my friends to do the same, but often realize that like you have found, they aren't really equipped to ask the question in an effective manner even if I tell them what they need to ask.
In that light the "assume your equity is worth zero" really starts to be a good self protection mechanism.
In that light the "assume your equity is worth zero" really starts to be a good self protection mechanism.
That's the approach I take. I tell them that I will think of their equity like a bonus, and I will be happy to work hard in anticipation of getting something from it, but probably will not trade real dollars in return.
This. If you're getting below-market salary (market salary minus some delta), plus substantial equity, this is economically equivalent to getting paid a market salary and then investing delta dollars into the startup. Where delta is likely thousands (or tens of thousands) of dollars per year, and a substantial portion of your income.
Obviously, you should understand exactly what you're getting when talking about such large amounts of money. Which means understanding both the total EV of the business (how big it will be on a success that allows you to cash out, times the probability that will happen) and the cap structure (because you also have to multiply by the percentage that you own).
Obviously, you should understand exactly what you're getting when talking about such large amounts of money. Which means understanding both the total EV of the business (how big it will be on a success that allows you to cash out, times the probability that will happen) and the cap structure (because you also have to multiply by the percentage that you own).
"The real losers are the employees," fourteen paragraphs in.
O that more writers would rediscover the format of the inverted pyramid (think news stories, lead first).
Instead so many are following the format of: dump to paper the entire warm-up process. This warm-up is often necessary. It's fine to even write it in your first draft. Before publication, excise the long intro.
O that more writers would rediscover the format of the inverted pyramid (think news stories, lead first).
Instead so many are following the format of: dump to paper the entire warm-up process. This warm-up is often necessary. It's fine to even write it in your first draft. Before publication, excise the long intro.
Inverted pyramid was specifically "designed" for print so that a news story could be cut at a more or less arbitrary point to fit in a hole of a particular size. It's not a universal writing formula.
(That said, I agree that introductions in a more magazine-style story can ramble and can benefit from having all the "throat clearing"--as an editor of mine used to call it--being cut or pared down significantly.)
(That said, I agree that introductions in a more magazine-style story can ramble and can benefit from having all the "throat clearing"--as an editor of mine used to call it--being cut or pared down significantly.)
stats on online reading suggest that the inverted pyramid is even more essential here than for print, as everyone makes their own decision when to close a tab, and vanishingly few read the full piece most of the time.
FWIW, I agree that this piece went on about various aspects of Theranos for way too long before getting to the meat of the piece.
That said, the purpose of a piece of writing isn't necessarily to communicate a list of increasingly less important facts--which is what fits best with inverted pyramid. Different people have different preferences. I'm not necessarily writing things to maximize eyeballs on the first and second paragraph.
That said, the purpose of a piece of writing isn't necessarily to communicate a list of increasingly less important facts--which is what fits best with inverted pyramid. Different people have different preferences. I'm not necessarily writing things to maximize eyeballs on the first and second paragraph.
Yes, it's the employees.
Have you ever noticed that working on an ultra-cool product that goes bust won't cut you any slack. You get more credits for minor contributions to known brands than massive contributions to busted products.
Your skills are tied to your product's PR (apparently).
Have you ever noticed that working on an ultra-cool product that goes bust won't cut you any slack. You get more credits for minor contributions to known brands than massive contributions to busted products.
Your skills are tied to your product's PR (apparently).
I know someone who worked on healthcare.gov (the initial one). Couldn't get an interview anywhere until he stopped listing it.
Well I mean the site the was fundamentally unusable. It's not surprising that advertising his role (whether related to the myriad problems it had or not) didn't help his career much.
> Inverted pyramid
https://en.wikipedia.org/wiki/Inverted_pyramid
https://en.wikipedia.org/wiki/Inverted_pyramid
I'd also argue the customers are also real losers, more so than employees sometimes that often times can find another job really easy.
In the specific case of Theranos I'd agree, but almost everywhere else it's exactly the opposite. If a company's services are irreplaceable they likely wouldn't be going out of business, so going out of business means there are better alternatives.
Again Theranos is unique: The product they served may have costed customers dearly either financially or worse.
Again Theranos is unique: The product they served may have costed customers dearly either financially or worse.
Depends on the product. Employees have a lot more skin in the game than customers generally.
fair criticism
> The real losers are the employees
It is true that employees are often at the bad end of a power imbalance - which often creates information asymmetry, among other problems - surly the "real losers" are the people who just had their test results voided.
> Who Really Gets Hurt When Startups Blow Up?
Depending on what the startup does, one of the groups that is hurt is "the users". I encourage everybody in a startup to listen to one of Jason Scott's talks[1]. He is the Angel Of Death that descends on failed internet startups with his Archive Team that tries to move as much data as possible into the Internet Archive before the servers are shut off. A lot of ordinary people can be caught in the crossfire when the businesses they trusted with their data and infrastructure are sold off as scrap.
I'm not trying to diminish the problems that employees face in the same situations. Being laid off sucks. Knowing that years of your own work will end up unfinished is terrible. Instead, I'm suggesting that the users should also be considered in that analysis.
[1] https://www.youtube.com/watch?v=aNeE8-iVkwY
It is true that employees are often at the bad end of a power imbalance - which often creates information asymmetry, among other problems - surly the "real losers" are the people who just had their test results voided.
> Who Really Gets Hurt When Startups Blow Up?
Depending on what the startup does, one of the groups that is hurt is "the users". I encourage everybody in a startup to listen to one of Jason Scott's talks[1]. He is the Angel Of Death that descends on failed internet startups with his Archive Team that tries to move as much data as possible into the Internet Archive before the servers are shut off. A lot of ordinary people can be caught in the crossfire when the businesses they trusted with their data and infrastructure are sold off as scrap.
I'm not trying to diminish the problems that employees face in the same situations. Being laid off sucks. Knowing that years of your own work will end up unfinished is terrible. Instead, I'm suggesting that the users should also be considered in that analysis.
[1] https://www.youtube.com/watch?v=aNeE8-iVkwY
Non-US businesses find it baffling that transparency is so extraordinarily low in the US. Even the smallest UK company has to publish information on fundraising and basic finances (admittedly, with quite a big lag). The same applies basically everywhere in Europe. Russia is in many ways far more transparent than the US for company data (both financials and ownership/funding).
Given the regulatory attitude to small business secrecy in the US, it's not at all surprising that companies can implode even when there is a lot of noise and publicity.
Typically the rationale for this though is to protect counterparties, not employees per se as the author suggests. (And also just that sunlight is the best disinfectant).
Given the regulatory attitude to small business secrecy in the US, it's not at all surprising that companies can implode even when there is a lot of noise and publicity.
Typically the rationale for this though is to protect counterparties, not employees per se as the author suggests. (And also just that sunlight is the best disinfectant).
you're not seeing it from the other side.
in those countries, you couldn't hope to land your first client if you are a small unfunded startup with no brand-name investors or significant revenue. i.e. you have to be connected to start a business, good luck trying to bootstrap anything. i believe this is a net negative.
in the US, you can, because nobody can just click a few buttons and see you have no significant customer base or brand name investors.
in those countries, you couldn't hope to land your first client if you are a small unfunded startup with no brand-name investors or significant revenue. i.e. you have to be connected to start a business, good luck trying to bootstrap anything. i believe this is a net negative.
in the US, you can, because nobody can just click a few buttons and see you have no significant customer base or brand name investors.
How is it a net negative? Should people not have the right to know exactly what kind of company they are about to do business with? When you invest in a product or platform, do you not want to be able to evaluate whether it will be around in 3 years?
> When you invest in a product or platform, do you not want to be able to evaluate whether it will be around in 3 years?
How do you judge based on that? Even Apple had a customer #1.
How do you judge based on that? Even Apple had a customer #1.
There are fundamental differences between tangible products and services - change and company shutdown. Tangible goods are sold as-is, can be evaluated as such and remain functional even in the event of company shutdown (unless its heavily backend dependent). Services, on the other hand, are expected to receive improvements (and startup services are quite often sold with future improvement roadmap) and die with the parent company, possibly with all your data.
and when google/apple/facebook buys your service and shuts your service down, where does this logic leave your customers?
these heuristics are completely invalid in today's economy. sure they sound intuitive, but they're not.
http://ourincrediblejourney.tumblr.com/
in fact i could make a reasonable case that having brand name funding means you're more likely to NOT be around in 3 years
these heuristics are completely invalid in today's economy. sure they sound intuitive, but they're not.
http://ourincrediblejourney.tumblr.com/
in fact i could make a reasonable case that having brand name funding means you're more likely to NOT be around in 3 years
first of all, how do you evaluate what is going to be around in 3 years given this data? haven't you seen ANY of the recent acquisition/shutdowns by google, yahoo, facebook, etc? you're fooling yourself into thinking anything has any longevity based on who just bought who, or invested in whom. quite frankly this line of thinking is naive.
and ultimately no, they do not have the 'right' to know who owns your business, they can use their best judgment based on availability of data, or no data. you think corporations have rights? are you sure your thinking is internally consistent with the rest of your beliefs about corporations/companies?
they could force you to divulge, or not sign a contract, just like a business partner or a bank. that's as far as the rights should extend... the extent of their leverage in negotiating.
forcing individuals/sole proprietorships/partnerships/LLCs to reveal how much revenues and who owns them they have is not good, in my opinion. you can feel free to disagree. you've probably never bootstrapped a company or sold anything for a living so i get why you feel that way.
http://ourincrediblejourney.tumblr.com/
and ultimately no, they do not have the 'right' to know who owns your business, they can use their best judgment based on availability of data, or no data. you think corporations have rights? are you sure your thinking is internally consistent with the rest of your beliefs about corporations/companies?
they could force you to divulge, or not sign a contract, just like a business partner or a bank. that's as far as the rights should extend... the extent of their leverage in negotiating.
forcing individuals/sole proprietorships/partnerships/LLCs to reveal how much revenues and who owns them they have is not good, in my opinion. you can feel free to disagree. you've probably never bootstrapped a company or sold anything for a living so i get why you feel that way.
http://ourincrediblejourney.tumblr.com/
You have every right to know it. Put it in the contract before signing. They (a private company) has every right not to tell you and not to do business with you.
Just because there's another side doesn't mean it's equally valid.
But professional investors value companies as a full-time job and still get it wrong a lot of the time. My full-time job is writing computer programs, not investment banking or venture capital. So even if I have access to this information, how can I know what to make of it? I don't know what's important, which little number might be the secret sauce or the torpedo in the engine room. And any company will choose and frame those metrics that make its future look brightest. I think this is a fundamental problem with equity as a form of compensation. As the article points out, I can only invest in one job at a time. Even if it's a good job, how do I know what the future will bring in terms of option value?
As for making me feel like an owner, an oft-cited benefit of equity, I think that's a social phenomenon and not something you can conjure up with a piece of paped. Just as putting a ping pong table in the office doesn't guarantee a laid-back culture, issuing RSUs doesn't guarantee that each employee will feel like an integral part of the mission rather than a cog in the wheel. Both come from the relationships you build up as you go along.
As for making me feel like an owner, an oft-cited benefit of equity, I think that's a social phenomenon and not something you can conjure up with a piece of paped. Just as putting a ping pong table in the office doesn't guarantee a laid-back culture, issuing RSUs doesn't guarantee that each employee will feel like an integral part of the mission rather than a cog in the wheel. Both come from the relationships you build up as you go along.
Feeling like an owner is not a benefit, except arguably in the very rare cases where it is true. In all other cases it is a delusion that benefits someone else. If you are getting that feeling, ask yourself if you can act like an owner.
According to this article it's the employees, but in the case of Theranos I would have expected the answer to be the patients who made decisions based on bad test results.
Isn't this simply an issue of risk preference? Working for privately held startups is more risky than working for established businesses. Presumably employees are willing to stomach this additional risk for the presumed upsides.
Is the answer really to burden employees with even more data, or just for them to be smarter about where they choose to work?
Is the answer really to burden employees with even more data, or just for them to be smarter about where they choose to work?
> The real losers are the employees.
Why victimize the employees so much? It isn't like you go to work for the startup and when it implodes you are left with nothing and no options -- far from it, you likely made a good salary while you worked there and are likely very employable afterwards.
> They are investing their time and their careers without access to any information.
Being that employees ARE investors (their time), they should do their due diligence, too. A company not being transparent about whatever information you need to make a good investment decision should be a reason not to work there ie as a prospective employee you should evaluate how the company shares information with its employees.
Why victimize the employees so much? It isn't like you go to work for the startup and when it implodes you are left with nothing and no options -- far from it, you likely made a good salary while you worked there and are likely very employable afterwards.
> They are investing their time and their careers without access to any information.
Being that employees ARE investors (their time), they should do their due diligence, too. A company not being transparent about whatever information you need to make a good investment decision should be a reason not to work there ie as a prospective employee you should evaluate how the company shares information with its employees.
"It isn't like you go to work for the startup and when it implodes you are left with nothing and no options -- far from it, you likely made a good salary while you worked there"
Aren't startups notorious for paying crappy, below market wages?
"Being that employees ARE investors (their time), they should do their due diligence, too. A company not being transparent about whatever information you need to make a good investment decision should be a reason not to work there ie as a prospective employee you should evaluate how the company shares information with its employees."
Maybe. But given that they are required to give that information to investors who invest with money, why shouldn't they be required to give that information to investors who invest with time and effort?
Aren't startups notorious for paying crappy, below market wages?
"Being that employees ARE investors (their time), they should do their due diligence, too. A company not being transparent about whatever information you need to make a good investment decision should be a reason not to work there ie as a prospective employee you should evaluate how the company shares information with its employees."
Maybe. But given that they are required to give that information to investors who invest with money, why shouldn't they be required to give that information to investors who invest with time and effort?
They aren't legally required to provide any particular set of information to an investor. (They are, though, forbidden from mis-representation and fraud).
The investors ask for it, and if management wants the investor's money, they provide it.
Employees could easily drive the same bargain.
What about periodic updates? Investors are often board members as well as shareholders. Certain amounts of disclosure may be made to the first (depends on the by laws) and must be made to the second.
On might say that the employee is working for stock, but they really aren't: stock would be taxable income with no cash with which to pay the tax. They're really working for stock options, which are not stock. Which means the employee isn't a shareholder. So they don't get the same shareholder disclosure. This is easily fixed: exercise an option for one share. You even then have "your board member" to represent you! Or course, that's probably one of the founders (common stock), so your day-to-day experience may not change much.
In my (limited) experience with founding a company, raising angel investments, restarting it with the person who would then be CEO (the old investors were made whole) and then raising equity from outside investors in multiple rounds... the biggest problem with employee disclosure is that they are financially functionally illiterate. It's a bit burden! We chose to be fully transparent (for good or bad) where the entire sales pipeline was printed and posted every Friday, together with the balance sheet and the income statement. We summarized this with a one-weekly-tick-update on a large (and maybe grim?) "days-to-death" chart. In short -- just everybody "knew the deal". Not everybody "understood the deal", but whaddyagonna do?
As the number grew lower, people would (rationally) become concerned. Sometimes (not often) I had a line outside my door from people wanting a private session to discuss "what should I do?". And although the real answer was "Leave me alone and let me work on closing this deal", I never said that! :-)
As a person being asked to work for free ("just until we get funding!"), I can't remember the last time I was refused a chance to glance over the cap table and balance sheet.
Maybe the answer is: Just ask. If they say "no", that may be all you need to know.
The investors ask for it, and if management wants the investor's money, they provide it.
Employees could easily drive the same bargain.
What about periodic updates? Investors are often board members as well as shareholders. Certain amounts of disclosure may be made to the first (depends on the by laws) and must be made to the second.
On might say that the employee is working for stock, but they really aren't: stock would be taxable income with no cash with which to pay the tax. They're really working for stock options, which are not stock. Which means the employee isn't a shareholder. So they don't get the same shareholder disclosure. This is easily fixed: exercise an option for one share. You even then have "your board member" to represent you! Or course, that's probably one of the founders (common stock), so your day-to-day experience may not change much.
In my (limited) experience with founding a company, raising angel investments, restarting it with the person who would then be CEO (the old investors were made whole) and then raising equity from outside investors in multiple rounds... the biggest problem with employee disclosure is that they are financially functionally illiterate. It's a bit burden! We chose to be fully transparent (for good or bad) where the entire sales pipeline was printed and posted every Friday, together with the balance sheet and the income statement. We summarized this with a one-weekly-tick-update on a large (and maybe grim?) "days-to-death" chart. In short -- just everybody "knew the deal". Not everybody "understood the deal", but whaddyagonna do?
As the number grew lower, people would (rationally) become concerned. Sometimes (not often) I had a line outside my door from people wanting a private session to discuss "what should I do?". And although the real answer was "Leave me alone and let me work on closing this deal", I never said that! :-)
As a person being asked to work for free ("just until we get funding!"), I can't remember the last time I was refused a chance to glance over the cap table and balance sheet.
Maybe the answer is: Just ask. If they say "no", that may be all you need to know.
There are inherent risks in startups. Those may be better manageable from an employee perspective with more disclosure. A fundamental problem with startup is that data is backward looking, extremely noisy and is not really a good predictor of what's to come. Considering the need of high level negotiations about funding often at the brink of shutting down financial disclosure at the wrong point in time can put the startup at a disadvantage.
There are also risks of misrepresentation and outright fraud. Those can't be solved with data room access but only fact finding audits from the outside and whistle blowers from the inside.
There are also risks of misrepresentation and outright fraud. Those can't be solved with data room access but only fact finding audits from the outside and whistle blowers from the inside.
I find some of the attitudes towards equity / cash salary baffling.
If you care about the "safety" of a cash salary, join a big, established company. You'll have limited upside but a more stable cash income. No risk, no reward.
If you are joining a startup, it is by definition because you want to take on risk. The reward for that risk is by far captured in the increase in the value of the equity, not the cash compensation.
It does not make sense to join a startup and not want to maximize your exposure to the upside in the form of equity.
If you care about the "safety" of a cash salary, join a big, established company. You'll have limited upside but a more stable cash income. No risk, no reward.
If you are joining a startup, it is by definition because you want to take on risk. The reward for that risk is by far captured in the increase in the value of the equity, not the cash compensation.
It does not make sense to join a startup and not want to maximize your exposure to the upside in the form of equity.
> The real losers are the employees. They are investing their time and their careers without access to any information. Unlike a fund who may have a portfolio of dozens or hundreds of investments, an employee can only make one investment at a time. The cost of a mistaken investment can be unemployment and the opportunity cost of foregone opportunities.
This right here is why I've never worked full-time at a start-up with a large percentage of total compensation coming from un-tradable private stock. I won't be someone else's dart. My current employer pays out a substantial part of compensation in RSUs, which I have set to auto-sell the day they are rewarded. It's almost the same as getting cash salary, except with some market variance (that fortunately has paid off for me so far, as the stock price has increased over time).
This right here is why I've never worked full-time at a start-up with a large percentage of total compensation coming from un-tradable private stock. I won't be someone else's dart. My current employer pays out a substantial part of compensation in RSUs, which I have set to auto-sell the day they are rewarded. It's almost the same as getting cash salary, except with some market variance (that fortunately has paid off for me so far, as the stock price has increased over time).
"Startups" and "Theranos" are not the same thing.
There are plenty of other start-ups similar to Theranos that have gone bust and also caused harm to their employees. Hell, it's the way of most start-ups.
What distinction are you trying to draw here? That Theranos was particularly egregious, more so than just most start-ups simply failing to gain traction and closing for reasons of unprofitability?
What distinction are you trying to draw here? That Theranos was particularly egregious, more so than just most start-ups simply failing to gain traction and closing for reasons of unprofitability?
A fair explanation of the problem. I imagine most start-ups would not easily stomach the proposed solution.
Most private companies of any kind would rather share nothing about their performance with anyone.
Heck, many private companies have terrible metrics on overall performance because they're not really required to do any bookkeeping past tax purposes.
Heck, many private companies have terrible metrics on overall performance because they're not really required to do any bookkeeping past tax purposes.
Often, the founders are permitted to embezzle the last 5-10% of the capital by walk away investors.
Sometimes, the founders own and profit from vendors to their venture, which dies.
Sometimes, a tiny, viable business is started within the venture, whose main business plan fails. The little business survives and feeds the founder and a few cronies.
Sometimes, the founder goes back to her lucrative university professorship which she was "on leave" from.
The founders never get hurt.
The founders never get hurt.
Sounds like a sweet deal. You should found a company!
Often the founders have trust funds and connected families, so never have to worry a day in their lives about missing rent or going hungry.
As a current founder in a startup, these comments are hilarious.
Yea, I'm definitely a trust funder, my parents know the Kennedys, and I have at least 10 shell companies set up. /s
In reality I'm broke because I've been taking an extremely low salary for almost a year now, my parents are about as connected as a pair of sea turtles, and my rent/next meal is a daily concern.
Lot's of undeserved hate for 'founders' here it seems.
Yea, I'm definitely a trust funder, my parents know the Kennedys, and I have at least 10 shell companies set up. /s
In reality I'm broke because I've been taking an extremely low salary for almost a year now, my parents are about as connected as a pair of sea turtles, and my rent/next meal is a daily concern.
Lot's of undeserved hate for 'founders' here it seems.
The golden handcuffs are more handcuffs than gold. Ask for a reasonable wage and make sure you get it. Anything else is gravy. Understand when you join a start up that it might disappear under your feet and make sure you have a plan B. But, always, always make sure that you are building the career you want.
In startups I have seen so many people (employee #single-digit, usually) who get promoted out of the job they want to do. They hang around doing stuff they hate because, "It might be a big deal in a few years". If there is a downturn, then they are the first ones to be asked to work months (or years!) with no salary because, "I'm sure we can turn it around and they are giving me equity!"
Obviously, it's up to the person, but if I could sum up the antidote for the misery I've seen in my career: 1. Cash on the barrel head, 2. freedom to do good work, 3. interesting co-workers. As a programmer, I never ask for more (or less). (and seriously... if you miss payroll... I'll still be your friend, but I won't be working for you... sorry. See rule 1.)