I took the $300K(boundary.com)
boundary.com
I took the $300K
http://boundary.com/blog/2013/05/26/i-took-the-300k/
108 comments
Is this advice really on a broken record? I recently saw a pitch from a bank marketing an LP stake in a prominent VC firm, and one of the first slides highlighted the willingness of Silicon Valley engineers to work for below-market rates in exchange for psychological benefits.
How do you know if someone at a party is working for YCombinator startup? Don't worry, he/she will tell you.
The advice is "broken record" and it will be ignored by majority of young engineers. Working for a cool startup is very very cool. Working for big corporation is not cool (and considered evil if that corporation is Microsoft or Oracle).
And that is actually good for economy, for startups, for VCs, and for engineers (not in monetary sense but they will become wiser).
The advice is "broken record" and it will be ignored by majority of young engineers. Working for a cool startup is very very cool. Working for big corporation is not cool (and considered evil if that corporation is Microsoft or Oracle).
And that is actually good for economy, for startups, for VCs, and for engineers (not in monetary sense but they will become wiser).
>>Working for a cool startup is very very cool.
No, working for something like Google or Facebook in its start up days is cool. And that is like once in a 15 year opportunity.
In reality you can do a lot of things on the side in a 9-5 job. Than working crazy hours at a crappy start up .
Yes working at big companies is not very much profitable, but neither is working at a bad start up. Bad starts up are worse than big companies.
No, working for something like Google or Facebook in its start up days is cool. And that is like once in a 15 year opportunity.
In reality you can do a lot of things on the side in a 9-5 job. Than working crazy hours at a crappy start up .
Yes working at big companies is not very much profitable, but neither is working at a bad start up. Bad starts up are worse than big companies.
The cool quotient, in this case, is not governed by the amount of money you make later but by the satisfaction, excitement and thrill of risk associated with working in a startup. Not to forget, more often than not you also tend to learn a lot more in a startup than the usual big corp job.
Opinions like this make me happy that I accepted a graduate job at an investment bank (with the hope that I will be able to develop something on the side) instead of going for a startup after finishing university.
One advantage people don't often talk about with finance industry jobs is their incredibly lax moonlighting clauses. Most seem to be of the form, "if we don't trade it and our vendors don't make it, knock yourself out."
That is a far cry from the policy I experienced at MSFT. Doing free reviews on my own time of books being published by Microsoft Press on products I was an engineer on required approval from my VP.
That is a far cry from the policy I experienced at MSFT. Doing free reviews on my own time of books being published by Microsoft Press on products I was an engineer on required approval from my VP.
> One advantage people don't often talk about with finance industry jobs is their incredibly lax moonlighting clauses.
Interesting. My first programming job was in a finance company who had a "we own everything you make, here or at home" policy. My manager said most finance companies would rather pay people more than have them working on things outside of work, which I took at face value. Knowing that was how I enjoy learning most, it was a big factor in my leaving.
Interesting. My first programming job was in a finance company who had a "we own everything you make, here or at home" policy. My manager said most finance companies would rather pay people more than have them working on things outside of work, which I took at face value. Knowing that was how I enjoy learning most, it was a big factor in my leaving.
Maybe it wasn't a trading-focused firm? Most of my friends (and wife) work at firms that are primarily about trading, and it's hard to hire (good) traders if you restrict them from also trading with their own funds on their own time. So, they seem to have the bare minimum policy that satisfies legal regulations about insider information and the contracts they usually have to sign with high-end enterprise vendors.
There's a 'the side' when working at an investment bank? I thought you guys pulled silly-nuts hours and had no spare time. The IB guys I read about constantly lament forgetting that they can't have a social life on weeknights when they get called in at crazy hours to fix up some higher-up's whim.
I think it depends on the division you work in. Some guy working in the networks/infra team may get better work/life balance than someone else in the front-office development team. I work in the latter and I must say the hours do suck and you tend to be drained when you get back home after work.
But I believe that if you have a strong will and good work ethics you can still manage to work on side projects in the evenings and week-ends. Hard but feasible.
It's the same as with tech companies. Some people will do crazy hours at some companies, some people won't.
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I often present it this way:
- when you join a company as an engineer, the best case scenario is probably something like 1%.
- a pretty good case scenario would be for a company to be bought in the $100M range. Say, $250M? You'll have cases in the billion-range, but that's exceptional.
So that's $2.5M! Nice! But a couple of things:
- you've been diluted in the meantime. - investors have liquidation preferences, so your percentage is coming out of a smaller amount.
That $2.5M got reduced a bunch. And you'll have to pay taxes on this. So, you're likely under a million in the bank at that point. That's honestly fantastic. But it won't last forever (meaning you're not set for life) and to compare it fairly, you'd want to divide that amount by the number of years you've worked for the company. (compared to a more stable job that pays more, with a regular bonus plan, less hours on the job, probably better benefits, etc.)
But the thing is that in most cases, people don't get 1% and in most cases, companies don't get bought for $250M or more. So, no you most likely won't get rich. Some do (the people at Instagram and Tumblr recently), but they are lucky exceptions. And even then, reports say that most people at Tumblr would get somewhere around $350k. Certainly very nice, but not life-changing and the reason it's been discussed at all, it's because it's an exception.
- when you join a company as an engineer, the best case scenario is probably something like 1%.
- a pretty good case scenario would be for a company to be bought in the $100M range. Say, $250M? You'll have cases in the billion-range, but that's exceptional.
So that's $2.5M! Nice! But a couple of things:
- you've been diluted in the meantime. - investors have liquidation preferences, so your percentage is coming out of a smaller amount.
That $2.5M got reduced a bunch. And you'll have to pay taxes on this. So, you're likely under a million in the bank at that point. That's honestly fantastic. But it won't last forever (meaning you're not set for life) and to compare it fairly, you'd want to divide that amount by the number of years you've worked for the company. (compared to a more stable job that pays more, with a regular bonus plan, less hours on the job, probably better benefits, etc.)
But the thing is that in most cases, people don't get 1% and in most cases, companies don't get bought for $250M or more. So, no you most likely won't get rich. Some do (the people at Instagram and Tumblr recently), but they are lucky exceptions. And even then, reports say that most people at Tumblr would get somewhere around $350k. Certainly very nice, but not life-changing and the reason it's been discussed at all, it's because it's an exception.
Yep, totally agree. I like to juxtapose it with the relative likelihood of exits at various orders of magnitude. A $1mm exit seems way easier than a $100mm exit, right?
In the ideal case, how much would you make on that $1mm exit if you were the sole, bootstrapping founder?
How much are you going to make in the ideal case as an employee at the $100mm exit after Series A and B rounds of funding when your initial stake was 1%?
In the ideal case, how much would you make on that $1mm exit if you were the sole, bootstrapping founder?
How much are you going to make in the ideal case as an employee at the $100mm exit after Series A and B rounds of funding when your initial stake was 1%?
Is it not possible they simply were having trouble finding work elsewhere, or were willing to accept below market salary to work on something cool? Etc?
I know there are certainly folks out there being taken for a ride. But take me for example- I know I personally could find more extravagant wages if I wanted, but I am not optimizing for salary. I am optimizing for happiness, which is what keeps me where I am.
I know there are certainly folks out there being taken for a ride. But take me for example- I know I personally could find more extravagant wages if I wanted, but I am not optimizing for salary. I am optimizing for happiness, which is what keeps me where I am.
Anything is possible. But at the time Powerset was a high profile startup with a reputation for being engineering driven. The financial crisis hadn't hit either. So it's not really plausible for them to have been hiring engineers who were unable to find any other work.
As for taking a paycut to work on something particularly cool, sure, why not? I've certainly done it in the past. But accepting a salary lower that doesn't even cover your cost of living (as implied in the article), when joining a company that's reportedly taken $20M in venture capital... That seems pretty unreasonable. Even exploitative.
As for taking a paycut to work on something particularly cool, sure, why not? I've certainly done it in the past. But accepting a salary lower that doesn't even cover your cost of living (as implied in the article), when joining a company that's reportedly taken $20M in venture capital... That seems pretty unreasonable. Even exploitative.
I am not optimizing for salary. I am optimizing
for happiness
Why not both? There is such a thing as a two-parameter optimisation algorithm.
Happiness is the function being maximized, whereas money is just one of several parameters/variables in the equation. It's an important distinction. You can't treat them as two parameters being maximized - for a few rare people, for example, the two are completely inversely related.
But why both? I'm not interested in pissing contests over who has the biggest number. What good does more money do me, if it costs me happiness?
Money is insurance against future unhappiness. Bad things happen for no reason, and you might need money later.
In case of people who don't have money. A lot of money means happiness.
And most of the times it is.
Not optimizing for money is setting yourself up for long term sadness. Though it might make you feel comfortable for the meanwhile.
And most of the times it is.
Not optimizing for money is setting yourself up for long term sadness. Though it might make you feel comfortable for the meanwhile.
Not optimizing for money is setting yourself up for long term sadness.
I'm not saying work for minimum wage. Money is obviously a component to happiness, because while you can't buy happiness, it's hard to be happy when you can't afford to eat. But you probably don't have to hit 100% of your maximum earning potential to avoid starvation-induced unhappiness, which is why optimizing for money is not my approach.
I'm not saying work for minimum wage. Money is obviously a component to happiness, because while you can't buy happiness, it's hard to be happy when you can't afford to eat. But you probably don't have to hit 100% of your maximum earning potential to avoid starvation-induced unhappiness, which is why optimizing for money is not my approach.
It's true that non-founder equity has a trivial chance of becoming life-changing money. But working at a fast-growing company has benefits. For inexperienced by ambitious people, the work-to-employee ratio makes it possible to take on projects that would normally go to someone more senior, prove your talent, learn quickly, and earn further options grants as a bonus. Even if you never get a windfall from that company, when you leave you'll have skipped a few years in job growth and be able to enter the next company in a better position.
To make a lot of money joining a startup, you probably have to be better at evaluating startups than VCs are, which is pretty difficult. Luckily, picking a startup where you can develop your skills, work with smart people, and have a lot of fun is easier than that. But it's still not automatic--you need to evaluate the founders and other employees to find out if you'll fit.
To make a lot of money joining a startup, you probably have to be better at evaluating startups than VCs are, which is pretty difficult. Luckily, picking a startup where you can develop your skills, work with smart people, and have a lot of fun is easier than that. But it's still not automatic--you need to evaluate the founders and other employees to find out if you'll fit.
I don't know why you're posting the same advice that, apparently, you know gets circulated here continually. In this case the guy got the base employee package, and that money allowed him to build a company that's on a great path. If he had followed your advice who knows where he'd be.
I don't know why you're post the same advice
that, apparently, you know gets circulated
here continually
If he had followed your advice who knows where he'd be.
Also, it seems somewhat disingenuous, given this topic, that you don't mention you work for Greylock.
"somewhat disingenuous"
Well, that's a rather passive-aggressive way of saying nothing at all, but insinuating anything.
It's irrelevant is why, I do work for Greylock but I'm not advocating that people should work below market rates, or even saying your advice is universally wrong. I'm saying that you are posting this advice on a story which literally contradicts what you are saying. The "I left the money" story would have been a much more sensible place to leave your comment.
Speaking of arithmetic though:
He received 80% of a $300k payout over two years: $120/year. On top of that he received a salary of, maybe, $60-80k. I think he did fine, and has landed well
Your advice doesn't make sense for this story. It's like posting "and this is why I don't fly" on a story about an utterly mundane flight.
Well, that's a rather passive-aggressive way of saying nothing at all, but insinuating anything.
It's irrelevant is why, I do work for Greylock but I'm not advocating that people should work below market rates, or even saying your advice is universally wrong. I'm saying that you are posting this advice on a story which literally contradicts what you are saying. The "I left the money" story would have been a much more sensible place to leave your comment.
Speaking of arithmetic though:
He received 80% of a $300k payout over two years: $120/year. On top of that he received a salary of, maybe, $60-80k. I think he did fine, and has landed well
Your advice doesn't make sense for this story. It's like posting "and this is why I don't fly" on a story about an utterly mundane flight.
Since you are working for Greylock, which is a VC, your are directly vested into clueless/naive programmers accepting below market offers, working long hours for a false promise. It is usually the VCs and founders that make the most out of a startup. Hence your advice is misleading at best.
Also, as an engineer I'd like to see this cycle stop. It creates an exploitative environment akin to some of the bad stories you hear in the gaming industry, where young engineers are often taken advantage and burnt out the industry.
Also, as an engineer I'd like to see this cycle stop. It creates an exploitative environment akin to some of the bad stories you hear in the gaming industry, where young engineers are often taken advantage and burnt out the industry.
Thank you for saying that.
Much more nicer tone than I would have had.
According to linkedin, he worked at powerset for 3 years at "well below market rate". He got 240K in bonus money from the acquisition. So the question is, how far below market rate? If he was making 60-80K as you suggest, that's about 60-80K below market rate. Which would mean that he took a huge risk for very little actual gain, especially since the bonus was probably taxed as regular income rather than capital gains.
Part of that was sunk costs. Presumably he was gambling on Powerset being a much higher exit. This store and the "I left $300k for github" are two sides to the question of what do you do when you are facing a soft landing rather than launching into orbit.
If the bonus had come in the form of a more lucrative cash buyout, it likely would have ended up being short term capital gains as options were cashed out, so there isn't even a tax difference.
If the bonus had come in the form of a more lucrative cash buyout, it likely would have ended up being short term capital gains as options were cashed out, so there isn't even a tax difference.
The $300K payout was not a foregone conclusion, in most cases, the bonus does not come through.
What I'm really interested in, is where you came up with that "Salary of $60-$80K" - what is that number supposed to represent? It certainly doesn't correlate with any engineering salary in the bay area I've seen in 15+ years. I.E. That isn't "below market salary" - it's what most companies pay their interns/summer students doing Desktop Support for IT the first couple years. ($65K is actually my very first salary in the Bay Area - doing Windows 95 Desktop suport back in 1996.)
What I'm really interested in, is where you came up with that "Salary of $60-$80K" - what is that number supposed to represent? It certainly doesn't correlate with any engineering salary in the bay area I've seen in 15+ years. I.E. That isn't "below market salary" - it's what most companies pay their interns/summer students doing Desktop Support for IT the first couple years. ($65K is actually my very first salary in the Bay Area - doing Windows 95 Desktop suport back in 1996.)
I made $80k out of college, as did many of my peers -- $80-100 was the range. And most engineers I know are making approximately double that at the 3-5 year mark. $80k is absolutely below market for an engineer with more than a little experience -- I don't know about the pay ranges for desktop support techs.
If the story is about someone achieving a rare but desirable outcome, and there's a common perception that the outcome isn't rare, then it makes sense to post a comment like the GP's. It may help prevent availability-biased readers from improperly "confirming" their belief that the event is actually not rare.
Cliff Moon's own post is pretty clear on this point: he wasn't impressed with the outcome of having worked at Powerset for below-market wages.
Really? At one point he says "it could not have worked out better for us" I'm not getting the sense that he was dissatisfied.
He lucked out. Which is the whole point. You don't hear about all the other people who got a small bonus and were kept on at roughly the same salary. It works out decent-to-great for founders, but employee #3-10 not so much.
Although I'd be interesting in knowing. Granted, most people probably consider a acqui-hire to Google or Facebook a great medium term career move.
Although I'd be interesting in knowing. Granted, most people probably consider a acqui-hire to Google or Facebook a great medium term career move.
When I read that in-context it seemed clear that the "us" in that sentence was Powerset. He said that at the time of the acquisition he wasn't even thinking about Boundary and he mentioned starting the company only in the next paragraph.
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My impression is that people know they will get less money working at a startup than a big company (including the average payoff when things go really well).
They do it for the experience of working on something really new, and working in that kind of environment, not the money. The big tech companies try to be startup-like, but they can never truly emulate the startup experience.
They do it for the experience of working on something really new, and working in that kind of environment, not the money. The big tech companies try to be startup-like, but they can never truly emulate the startup experience.
I'm not sure this is true. There is lots of sage advice out there pointing out what seems obvious to older, more jaded folks, which is that unless you are an actual founder, you'll probably not make too much money even on a successful exit. The information is certainly out there. It is mentioned on HN a lot.
But on the inside of these places you tend to have a lot of people at the founder level who speak about how well off everyone is going to be when the business really hits it big, and this type of talk can be pervasive to the point of almost being cultish. It becomes the go-to pep talk when the going is tough -- "Sure we're working 90 hours a week, but just think how great it is going to be when we all have Lambos in the parking lot!" And I do think a lot of younger folks who are less experienced with the game do tend to believe the bullshit even if all available data (save for ridiculous outliers like Google) states otherwise. When you're inside an echo chamber, it is really hard not to start believing what everyone is echoing, even if it seems obviously wrong to objective bystanders.
As far as the founders go, I think in some cases they are just being purely manipulative, and in other cases they aren't but are just naive themselves and not really thinking about the enormous drop in EV you can expect when you are a common share pleb.
But on the inside of these places you tend to have a lot of people at the founder level who speak about how well off everyone is going to be when the business really hits it big, and this type of talk can be pervasive to the point of almost being cultish. It becomes the go-to pep talk when the going is tough -- "Sure we're working 90 hours a week, but just think how great it is going to be when we all have Lambos in the parking lot!" And I do think a lot of younger folks who are less experienced with the game do tend to believe the bullshit even if all available data (save for ridiculous outliers like Google) states otherwise. When you're inside an echo chamber, it is really hard not to start believing what everyone is echoing, even if it seems obviously wrong to objective bystanders.
As far as the founders go, I think in some cases they are just being purely manipulative, and in other cases they aren't but are just naive themselves and not really thinking about the enormous drop in EV you can expect when you are a common share pleb.
>I'm not sure this is true. There is lots of sage advice out there pointing out what seems obvious to older, more jaded folks, which is that unless you are an actual founder, you'll probably not make too much money even on a successful exit. The information is certainly out there. It is mentioned on HN a lot.
What are you disagreeing with? I said that people know that startups don't on average pay more than big companies.
Most people I know who have considered the start-up option want the start-up experience for its own sake, not because they expect big financial gains.
What are you disagreeing with? I said that people know that startups don't on average pay more than big companies.
Most people I know who have considered the start-up option want the start-up experience for its own sake, not because they expect big financial gains.
I am disagreeing with the idea that the rank and file (primarily young) employees really understand that they are almost certainly going to make less money than they would working at a big company.
Anecdotal evidence on both sides, but most people I know who have actually gone into very early stage contemporary startups as non-founders were convinced (primarily by being sweet-talked by the founders and money people) that the company they were working for was going to be "the next big thing", and that is already a bad assumption for any startup. But the worse misconception is that even if the startup defies the odds and is quite successful, most younger non-experienced folk remain under the impression that because they were given "1%" of the company to sign-up (at the time when they actually signed up), if the company exits at say $100,000,000 ("real" money but kind of chump change in the days of Instatumblrgram) they will see $1,000,000... which is... not going to happen, not even close. By the time they are fully vested and the company exits, their 1% is probably more like 0.01% or worse. The realities of things like dilution of common stock are obvious to people who live on the money side of the startup world, but not so obvious (in my anecdotal experience) to the heads-down techie types who haven't yet been burned by it.
Anecdotal evidence on both sides, but most people I know who have actually gone into very early stage contemporary startups as non-founders were convinced (primarily by being sweet-talked by the founders and money people) that the company they were working for was going to be "the next big thing", and that is already a bad assumption for any startup. But the worse misconception is that even if the startup defies the odds and is quite successful, most younger non-experienced folk remain under the impression that because they were given "1%" of the company to sign-up (at the time when they actually signed up), if the company exits at say $100,000,000 ("real" money but kind of chump change in the days of Instatumblrgram) they will see $1,000,000... which is... not going to happen, not even close. By the time they are fully vested and the company exits, their 1% is probably more like 0.01% or worse. The realities of things like dilution of common stock are obvious to people who live on the money side of the startup world, but not so obvious (in my anecdotal experience) to the heads-down techie types who haven't yet been burned by it.
I completely agree, but I want to add one caveat. People will often learn far more spending a year or two at a startup than they will at a big company. In the long run, that will often pay dividends once they get to a good big company.
That's a fair point. If you do choose to accept a salary reduction, do it for the right reasons, not because you're going to rolling in dough in two years after your SoLoMo startup IPOs.
Sorry for my naivete but what the range for founder-level equity?
I'd expect the real founders to be in for no less than 1 / (num founders * 2). But in this context for taking a below market salary (as opposed to forgoing salary entirely), I think he's trying to convey >5%, as opposed to the standard SV lure of around 1-2% for an engineer they want to work for peanuts.
Now that I've said that, hopefully someone more knowledgeable will jump in to correct these numbers.
Now that I've said that, hopefully someone more knowledgeable will jump in to correct these numbers.
Depends on the valuation of the co., number of founders, and how many rounds of investment they've done (every round dilutes things). Basically though, if you weren't there when the company was founded, you probably won't have it.
Assuming a YC 3 founder model After 1 or 2 seed rounds, likely 10-20% Decrease by 20-40% per round after
Assuming a YC 3 founder model After 1 or 2 seed rounds, likely 10-20% Decrease by 20-40% per round after
YC chooses >=10%
Microsoft's unwillingness to bump people to market is short sighted. I'd take the offer, then shift my hours to the bare minimum. I'd spend all the new free time learning or working on side projects. I damn sure wouldn't be all that committed to helping Microsoft beat google at search. This seems like the obvious thing to do, and not far from what the author did.
This is why big companies get slow and bloated. Behavior like this only happens when people are in it for the money and don't really care about what they're building.
From what I have read, Google doesn't operate this way. My understanding is they don't keep everyone from an acquisition. While this seems a bit rude fire someone or make talented engineers re-apply for their own job, it does mean the people they do keep become Google engineers rather than 2 year indentured servants who have no incentive to join the company culture.
All strategies are problematic.
All strategies are problematic.
Back in the day (circa 1996 with my experience), MSFT made employees from acquisitions re-apply for their jobs and go through the full interview process.
It was great working with Cliff and many other folks at Powerset. I think I got cynical a little earlier than some of the other folks and left before the acquisition, so I might be less justified in my opinion, but anyway,
On the below-market wages issue: I think Powerset's really crazy marketing/hype allowed it to hire stronger engineers than would have been justified given its product and technology. All the startup spinoffs he mentions (Serious Business, Crowdflower, Github... and later some more I can't even keep track of...) I think are an indication of that. I guess that's how you hire using equity. You could say it's taking advantage of the psychology of overvaluing low-probability, high-impact outcomes. Or you could say, those people were duped.
I'm just glad for all the folks who, like Cliff, were able to take the bonuses to help support families or later business ventures.
On the below-market wages issue: I think Powerset's really crazy marketing/hype allowed it to hire stronger engineers than would have been justified given its product and technology. All the startup spinoffs he mentions (Serious Business, Crowdflower, Github... and later some more I can't even keep track of...) I think are an indication of that. I guess that's how you hire using equity. You could say it's taking advantage of the psychology of overvaluing low-probability, high-impact outcomes. Or you could say, those people were duped.
I'm just glad for all the folks who, like Cliff, were able to take the bonuses to help support families or later business ventures.
This goes to show that what may be right for one person may not be right for another, despite the terms being the same; all too often we fail to take external circumstances into account.
Yet, at the same time, if you hustle and are scrappy you can always find a way to make something come about.
Yet, at the same time, if you hustle and are scrappy you can always find a way to make something come about.
Could someone explain what he means when he writes "...the payout breakdown was 30, 50, 20, meaning that Microsoft will probably get a 20% discount on your bonus if you were planning on leaving"?
He may have meant, if you quit after first year, you get 30% of the bonus, quit after second year, you get 30%+50% = 80%. If you are going to quit, you will probably quit after second year. So for most people who are quitting, MS would not have to hand out the last 20%.
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This is why you should NEVER work for below market salaries, you loose all leverage.
I worked for below-market salary for a year and a half just so that I could get out of .NET development and start working on Python. Now after a year and half, armed with more Python experience, I have switched to another Python job at what I estimate to be at least market, if not above-market salary.
Bottomline, never say never. You may have to take a temporary hit so that you get to do what you want.
Bottomline, never say never. You may have to take a temporary hit so that you get to do what you want.
I did the exact same thing when I switched from .NET to Ruby. Took a one year hit to work with Ruby at an early stage startup and left after a year to join a Fortune 100 making more than I ever did in .NET.
You should NOT have gotten yourself into that situation in the first place. ALWAYS be looking.
Not clear about what you are saying - what situation? I had a choice - keep working on .NET or take another job at a below market salary to work on Python. So I did the latter because I loved Python. This was with the goal that I would gain enough experience in Python to jump ship and work in a Python-based environment, back at market-salary.
I'm surprised that they kept you on below market salaries after the acquisition. But I'm guessing that the bonuses more than made up for it?
I'm more surprised folks fell for the "take it or leave it" gambit.
I agree. This sounds like tough talk. I can understand why they would say that but I can't undertand why anyone would believe it. What they are really saying is look, we wan't to roll you all up and it would be much easier for us if you weren't comparing notes with your buddies. Fine, I recognize that we as a group have collectively a stronger bargaining position than we would if you had approached just one of us. Use that to your individual (or even collective) advantage.
Hindsight, 20-20 and all that but the point stuck out for me.
Anyway, sounds like OP played the game the way he wanted so props for that. Something to think about next time someone claims something is "take it or leave it:" get up right away and leave it.
Hindsight, 20-20 and all that but the point stuck out for me.
Anyway, sounds like OP played the game the way he wanted so props for that. Something to think about next time someone claims something is "take it or leave it:" get up right away and leave it.
What's the third option?
(anon to protect the innocents)
I have been through the exact same scenario: acquisition, take it or leave it offer of employement to join the employer.
You know what? Go to your boss, in a non-confrontational way, tell them that you are underpaid, the market (meaning other companies) are making you offers left and right at much higher salary. It's not you who is greedy, it's the market telling you what you are worth. Then say you very much want to stay.
The deadline they give you about signing the original offer? Let it expire. Until you do that, they don't take you seriously. You're just a whiny engineer. Once their deadline is gone, see who calls first. They will call you in a panic and find out what it is you want (you already told them by the way). Then they'll move real fast to make a counter-offer that is at least half-decent. Done.
I have been through the exact same scenario: acquisition, take it or leave it offer of employement to join the employer.
You know what? Go to your boss, in a non-confrontational way, tell them that you are underpaid, the market (meaning other companies) are making you offers left and right at much higher salary. It's not you who is greedy, it's the market telling you what you are worth. Then say you very much want to stay.
The deadline they give you about signing the original offer? Let it expire. Until you do that, they don't take you seriously. You're just a whiny engineer. Once their deadline is gone, see who calls first. They will call you in a panic and find out what it is you want (you already told them by the way). Then they'll move real fast to make a counter-offer that is at least half-decent. Done.
It's good if you also have an offer from a competitor. Then there's no theoretical game to play ("the market price is your highest offer, which is currently ours") and you win by doing nothing.
> The deadline they give you about signing the original offer? Let it expire. Until you do that, they don't take you seriously. You're just a whiny engineer. Once their deadline is gone, see who calls first.
This is the sound of me kicking myself.
This is the sound of me kicking myself.
Helps if you all do it together, eg, a union.
I think I'm missing something. Why will they call you in a panic?
They just spent <insert large sum of money> to buy the company you work for. EVERY acquisition, at some level, is a talent acquisition. They're buying not just the IP, but the people who made that happen. They need to have everyone who knows how to contribute on board. There is no point in your career that you will have more leverage than on the day a company you work for is acquired.
Which is why they put out these silly "take it or leave it" offers. They're trying to pressure you into giving up that leverage. When you call their bluff, you'll find you have a really nice negotiating position.
There are exceptions of course. Failed company acquisitions for instance generally don't leave you a ton of negotiating room (although even then it's not zero).
So in short they're going to call in a panic because they need you much more than you need them.
Which is why they put out these silly "take it or leave it" offers. They're trying to pressure you into giving up that leverage. When you call their bluff, you'll find you have a really nice negotiating position.
There are exceptions of course. Failed company acquisitions for instance generally don't leave you a ton of negotiating room (although even then it's not zero).
So in short they're going to call in a panic because they need you much more than you need them.
Thanks for the detailed perspective. I've never been a part of an acquisition and I wasn't thinking about it that way.
It's not easy to replace talented people.
Negotiate. It's always an option in my experience. (For example, I've negotiated the text of offer letter and IP/confidentiality agreements at most of my employers).
Thats negotiation of terms, not the money.
I think that generally money is by far the easier thing to negotiate than terms. Even if just because a change of terms often needs to be approved by lawyers, whereas a change of $ amount can be approved directly by the parties doing the negotiation.
I think that generally money is by far the easier thing to negotiate
And here's something to back you up: http://www.reddit.com/r/TwoXChromosomes/comments/hvv2m/i_wor...
And here's something to back you up: http://www.reddit.com/r/TwoXChromosomes/comments/hvv2m/i_wor...
It is so fun to call someone's bluff like this. "The offer is fixed, take it or leave it." "OK, bye." "Waaaaiiiit, we didn't really mean it!"
I've only had the chance to do this once, with pretty small potatoes stuff, but damn if it wasn't absolutely delightful.
I've only had the chance to do this once, with pretty small potatoes stuff, but damn if it wasn't absolutely delightful.
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They probably didn't want them to stay around permanently, just long enough to complete knowledge transfer.
cognitively it probably makes more sense. ie Im on the same wage but i can brag Im getting $300k extra. If they offered them market rate and an extra $100k it wouldnt sound so great and wouldnt make as much blog traffic ;)
I wonder if there was some kind of accounting reason behind it as well.
Not sure if it's the case here, but in some sports (NFL iirc) players don't have guaranteed contracts. If a player makes no bonus but is supposed to earn $10 million a year, he gets nothing if he's cut. If he gets a $3,000,000 signing bonus and a $7,000,000 salary, he keeps the 3 because he got it up front.
I think salary is taxed at a higher rate than bonuses, which could be part of it.
Not true. http://www.thestreet.com/story/990258/1/when-the-tax-bullet-... (though you said the reverse). "It doesn't matter whether your salary is $90,000 and you get a $200,000 bonus or your salary is $290,000"
As mason55 said, a bonus will typically be reduced a lot when paid out (so that a $5k bonus ends up being more around $2.5k in your bank account), but in the end, when you do your tax return, you're taxed the same rate on your salary than on your bonuses.
Think about it this way: on your W-2, (assuming the US here) gross bonus and salary are not separated into two different categories. Thus, it can only be taxed at the same rate.
That being said, I'm surprised you'd say that salary is taxed higher… the typical misconception is to think that bonuses are taxed higher for the aforementioned reason.
Think about it this way: on your W-2, (assuming the US here) gross bonus and salary are not separated into two different categories. Thus, it can only be taxed at the same rate.
That being said, I'm surprised you'd say that salary is taxed higher… the typical misconception is to think that bonuses are taxed higher for the aforementioned reason.
Bonuses are generally withheld at a higher rate but in the end they're taxed as ordinary income.
It is all too easy to celebrate wild success as the "right" plan but we have to remember that success happens only to a very small minority and not everyone has the luxury to throw caution to the wind. For every wild success there are thousands of failures but of course we never talk about those.
Glad it worked out for both parties in this case even though they took very different paths
Glad it worked out for both parties in this case even though they took very different paths
Completely off topic, but the boundary logo is one of the coolest I've ever seen. Just wanted to give a public kudos to the designer.
Seems like there's a lot of upset people commenting abou the realities of a good startup exit explicitly pointing out the realities of a non-founder. Probably why startup culture targets youthful employees.
Thanks for the counterpoint. It's definitely great that it worked out for both of you, but it's also nice to have a more balanced/grounded view of what happened to others coming out of the same situation.
sometimes optimizely's cdn doesn't seem responding from Turkey or it goes just haywire. fyi
I like the picture, $8 on a cat.
http://stuffonmycat.com/
http://stuffonmymutt.com/
http://stuffonmyrabbit.net/
How does one make a ban happen?
edit: Did I miss something, all the other comments are good? =/
edit: Did I miss something, all the other comments are good? =/
No, I think he's just commenting on the amusing picture of eight $1 bills on top of a cat in the original blog post :)
Perhaps it was only one stupid comment. He saw the cat with the bills and remembered the cat's photo site. It's not a very relevant comment and it breaks the "no cat's photos" rule. But it's not extremely offensive or plain spam or tinfoil hat talk, and the older comments from the user look good. So IMHO I think it deserves only a few downvotes (maybe 0 or -1?), banning the user for this is too much.
I don't see anything in the rules ( http://ycombinator.com/newsguidelines.html ) about cats.
Soemone should write him, he is on linked in and twitter:
http://www.linkedin.com/pub/nick-desaulniers/34/203/755
https://twitter.com/LostOracle
I have no account on either of that and can't find a mail address.
I have no account on either of that and can't find a mail address.
Maybe he got his account hacked or something...
Account hacked perhaps?
Never accept a below market salary unless you have serious skin in the game (i.e. founder-level equity). I probably sound like a broken record about this, but you have to assume that your equity in the company will never be worth anything, and—even if you are part of a 'successful' acquisition—you are liable to get an amount that brings you up to parity with the market...if you're willing to accept the golden handcuffs.
Think of your options (or RSUs, or whatever) in a company as being a lottery ticket. Odds are, it won't pay out. If it does, it's likely to be a trivial amount. For the rare cases where things really work out well (early employee at Facebook/Google), please try to remember that you were really lucky.