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I got through the video/phone interview. Talking to the person, she was knowledgeable. I will be working as a mid-level guy to start (well I would be working a mid-level position, but I would be the only person in my department), and she said once they ramp up I would be the head of my department. She asked for my salary, I told her a good number and she accepted (the job post had a salary range, and I asked for the top number). But going to ask about benefits later, specifically health benefits (I don't want to end up paying $500 a month or something dumb just for Kaiser). They want to see me for an in-person interview. Office address looks to be a suite that you just rent out by the day/week on Market St. I'm pretty cautious. Should I ask about getting stock options? What kind of things should I ask about at the interview? I've been working 10+ years, plenty of interviews, but I have never worked at a start-up before. What should I ask specifically about FinTech start ups? SA Forums Poster fucked around with this message at 03:38 on Jul 11, 2019 |
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Jul 11, 2019 03:34
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The interview offers you an opportunity to find out what the company requires from you, not just what you can get from the company. Don't be dazzled by stock options. Startups offer options because it serves the investors' interest to do so, in terms of retaining employees and guiding their priorities. But if you ever get any, make sure to read up on how they're taxed.
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Jul 11, 2019 04:12
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Stock options in tech startups are usually worthless, the VC communities have structured every deal such that unless you get in at Series A or before you are effectively locked out. Even if the company is wildly successful, there are very few good outcomes for the lowly employee shareholder. Never surrender real money for fictional money. Especially in these tech startups, where the whole thing is tuned perfectly to screw employees over and over again. The anecdote about the dude who painted the walls and got paid in stock and became a trillionaire is the exception that proves the rule, they will never, ever allow that to happen again. Pryor on Fire fucked around with this message at 14:04 on Jul 11, 2019 |
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Jul 11, 2019 14:01
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What stage is the startup? That's going to really determine what you should be asking about. Some general things you might care about are runway (how long until the company goes bankrupt/needs to get more funding), revenue growth rate (if it's not doubling year over year it's probably not going to be a success), and what kind of exit they're looking for. What department are you going to be leading? The other thing to think about is that a startup is going to have between zero and not much formal support available for new managers. Going in with your eyes wide open about what that implies (e.g. needing to find yourself a mentor, finding internal buddies to help you learn the company specific ropes) will be important. Additionally, figuring out how much your boss actually knows about your job (could be close to zero) and what they'll be expecting you to be able to do will be really, really important for spinning up a new department. Another important thing to realize is that chaos is a normal part of life at a startup, especially one that's successful (since growth makes everything break). The pace is also a lot higher than most companies; that doesn't mean long hours necessarily but it does mean that decisions that can take weeks a bigger companies are often made in less than a day. For example, at my company we interviewed someone on Friday, decided we liked him quite a bit but he wasn't a fit for the slot we had open. Today (the next business day) we decided to create a new position and make him an offer for it; he'll have an offer in front of him tomorrow morning. That fast pace means that side effects are often not well understood (or if they are they are accepted rather than mitigated) which leads to a lot of on the fly adjustments for everyone.
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Aug 13, 2019 03:42
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On the stock front, just treat it like a lottery ticket. In that first startup I took home what amounted to a bit less than a 10% annual bonus upon exit as an employee somewhere in the 200 range. You should negotiate for as much as you can get, but not at the cost of cash in hand.
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Aug 13, 2019 03:45
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FinTech = bitcoin. It’s a scam or run by people who have no clue what they talk about (maybe both!). Find out whether they’re scamming VC money or customers and decide if you’re ok with that. Make sure the salary is in real money and not in their own off-brand bitcoins that “will be worth millions some day.” Leave after the first time they don’t pay salary on time, it will probably not get better.
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Sep 19, 2019 05:40
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klafbang posted:FinTech = bitcoin. It’s a scam or run by people who have no clue what they talk about (maybe both!). Find out whether they’re scamming VC money or customers and decide if you’re ok with that. Make sure the salary is in real money and not in their own off-brand bitcoins that “will be worth millions some day.” Leave after the first time they don’t pay salary on time, it will probably not get better. Hilariously, our CEO did start another company for crypto work 
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Sep 19, 2019 15:04
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klafbang posted:FinTech = tech company. It’s a scam or run by people who have no clue what they talk about (maybe both!). Find out whether they’re scamming VC money or customers and decide if you’re ok with that. Make sure the salary is in real money and not in their own off-brand options that “will be worth millions some day.” Leave after the first time they don’t pay salary on time, it will probably not get better. Edited this to be true. Weirdly enough despite you having no idea what fintech is the core message was correct.
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Sep 19, 2019 15:06
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Vomik posted:Edited this to be true. Weirdly enough despite you having no idea what fintech is the core message was correct.
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Sep 19, 2019 15:16
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Well besides having cocked up already by saying a number especially before finding out about benefits, I’ll echo that stock options should be treated as nearly worthless because usually they are. You’re an employee, not a founder, so treat the position much like any other for which you’ve interviewed. Any future growth that you can ride should be treated as a bonus on top of your current salary, etc. But most of this doesn’t matter because by saying a number you’ve already mostly removed your ability to negotiate that number around the benefits. Best of luck all the same! Edit: same holds for “you’ll be the head of the team soon” promises. poo poo will almost certainly change and they’re promises just to lure you in. If you take the job, you need to be satisfied with the current position description, not some hand-wavey future promise Nam Taf fucked around with this message at 13:34 on Sep 20, 2019 |
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Sep 20, 2019 13:31
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Let's be clear: stock options can be highly worthwhile. The whole loving point of working for a startup is you're making a bet on variance - that things will turn out to be unexpectedly good. Options are the tool you use to capture that upside. If you want to forego/ignore them, you should instead go work for a large company where you will enjoy higher pay and hopefully more job security Yes it's true that options are not easy to understand as a concept, and you need to have a pretty informed view of what a given startup might become in the future in order to value them fairly. But again it is silly to dismiss them out of hand simply because you don't understand them
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Sep 21, 2019 20:24
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That's not the actual point of working for a startup. The point is getting more responsibility and being more important than you would be at a big company. You can then try to use that experience to work somewhere better than you were working before. Small tech startups being successful enough to give you a relevant sum of money beyond your salary is so rare that it shouldn't even factor into your calculations. No Wave fucked around with this message at 14:35 on Oct 21, 2019 |
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Oct 21, 2019 14:33
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got off on a technicality posted:Let's be clear: stock options can be highly worthwhile. The whole loving point of working for a startup is you're making a bet on variance - that things will turn out to be unexpectedly good. Options are the tool you use to capture that upside. If you want to forego/ignore them, you should instead go work for a large company where you will enjoy higher pay and hopefully more job security https://danluu.com/startup-tradeoffs/ quote:For a more serious take that gives approximately the same results, 80000 hours finds that the average value of a YC founder after 5-9 years is $18M. That sounds great! But there are a few things to keep in mind here. First, YC companies are unusually successful compared to the average startup. Second, in their analysis, 80000 hours notes that 80% of the money belongs to 0.5% of companies. Another 22% are worth enough that founder equity beats working for a big company, but that leaves 77.5% where that's not true. TheFluff fucked around with this message at 17:07 on Oct 28, 2019 |
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Oct 28, 2019 17:00
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got off on a technicality posted:Let's be clear: stock options can be highly worthwhile. The whole loving point of working for a startup is you're making a bet on variance - that things will turn out to be unexpectedly good. Options are the tool you use to capture that upside. If you want to forego/ignore them, you should instead go work for a large company where you will enjoy higher pay and hopefully more job security
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Oct 29, 2019 00:28
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Dik Hz posted:This is bullshit. Options exist to make people work for less than they could make on the open market. The most valuable $100k to someone is the first $100k they make. Don't gamble your first $100k against a startup's 1000th $100k. The risk is asymmetric. Got to Agree. Unless I wanna play founder, I only come into a firm after stock options are not really a thing and they can pay my full wage. Sometimes I get approached by VC guys to be the corporate adult in the IT shop and get them to stop playing games with the budget (startup guys really hate anyone telling them no even if the idea is really dumb). If you can get the VC guys to hire you, you can get paid out of their premium payouts but that also means you work for the VC and not the firm. VC guys often pay better since they are looking for people who could be retired right now but work because they enjoy it, talking former partners at big consulting firms, engineers who cashed out and 20 year vets in consulting or enterprise business or areas like that. The big thing you need to know that is mostly never told to you unless you ask or you dig into financial reports is the multiplier when the startup gets sold or goes public. VC gets a range of 2x to 5x (really bad ones are even higher) of the money they put in before anyone else gets paid. Since most firms sell for less then this you get nothing but salary. Softbank also really messed up the VC system, previous to them you would get 2-5 mil to get yourself going, a good team and idea can easily earn 10x that with 5 to 10 people running the show. Softbank instead gives them 200 Mil and demands a moonshot. The problem with this crazy system is that now your idea needs to be worth that much more, or be able to expand, or something I guess in order to get the VC guys paid back. The other VC firms are being forced to do the same thing since hot startups will now ask stupid amounts of money with little plan but some graphs that show their idea is good.
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Nov 4, 2019 05:07
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got off on a technicality posted:Let's be clear: stock options can be highly worthwhile. The whole loving point of working for a startup is you're making a bet on variance - that things will turn out to be unexpectedly good. Options are the tool you use to capture that upside. If you want to forego/ignore them, you should instead go work for a large company where you will enjoy higher pay and hopefully more job security Every startup screws their employees out of all the equity the millisecond their idea looks to be actually profitable. This has been going on in the valley for 30 years now. Me personally I used to own 3% of a company that ended up getting bought for over $400 million. I got $0.00 out of this transaction. How did the bankers screw me and everyone else who "owned options"? They pretended to go out of business and reincorporated the llc in a different state. This is the norm. Happens every day. There is nothing complicated or tricky about understanding options, don't be condescending. It's simpler than 8th grade algebra, anyone should be able to sit down and read their equity agreement and understand how they work. The problem is that most people can only afford a five or six figure lawyer, and you're never going to be able to do poo poo about the company screwing you, because they will have an eight figure lawyer. Don't surrender real money for fictional money. Pryor on Fire fucked around with this message at 00:00 on Nov 28, 2019 |
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Nov 27, 2019 23:44
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Pryor on Fire posted:Every startup screws their employees out of all the equity the millisecond their idea looks to be actually profitable. This has been going on in the valley for 30 years now. What school did you go to where they taught stochastic differential equations and numerical analysis before algebra??
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Nov 29, 2019 14:15
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Come back and explain the Black-Sholes model when employee options are tradable.
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Dec 23, 2019 07:31
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Pryor on Fire posted:Every startup screws their employees out of all the equity the millisecond their idea looks to be actually profitable. This has been going on in the valley for 30 years now. I have spoken to two friends whose San Fran startups have collapsed in the past week. The boards have done an excellent job liquefying the companies and extracting as much cash as possible from whatever isn't nailed down. That's it. There's no severance, there's no health care, there's no equity. They were both expecting to be millionaires or at least multi hundred thousandaires from their equity. Both completely hosed by the bankers. Don't surrender real money for fictional money.
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Apr 5, 2020 15:19
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Don't surrender real money for fictional money. That said, there are great reasons to work at startups. You can get access to broad swathes of the business, you will get more interesting and more challenging work than at an established company, you have an opportunity to advance your career at an accelerated pace, and your job security becomes something broader than 'I hope my company doesn't fire me'. It was a running joke that the official path at Microsoft to become a VP was to go join a startup and then come back a few years later. If chaos, unreasonable work expectations, and massive autonomy sound like your cup of tea, you also get the perk of occasionally looking at your options and pretending to be a millionaire.
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Jun 22, 2020 21:03
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I'm surprised so many devs at startups put up with their shares being in a blatantly inferior class compared to investors. I would've expected by now there would've been lots of pushback on that, since software engineers usually have good other work options and thus plenty of leverage.
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Jun 23, 2020 23:36
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Cicero posted:I'm surprised so many devs at startups put up with their shares being in a blatantly inferior class compared to investors. I would've expected by now there would've been lots of pushback on that, since software engineers usually have good other work options and thus plenty of leverage. This is two edged. The reason your strike price is 10% of the fractional price at the last raise is because you are buying common shares and not preferred shares. The investors are literally paying (sometimes 3x or 4x or 10x or more) for preferred stock and the associated downside risk protection. With the vast majority of tech options going unexercised, dramatically increasing the cash that folks would need to put at risk to exercise pre-liquidity seems like it has its own issues.
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Jun 24, 2020 00:50
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Cicero posted:I'm surprised so many devs at startups put up with their shares being in a blatantly inferior class compared to investors. I would've expected by now there would've been lots of pushback on that, since software engineers usually have good other work options and thus plenty of leverage. As for share stuff it is far too convoluted to negotiate as an engineer when you can just negotiate for more salary instead.
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Jun 24, 2020 04:33
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Foolie posted:This is two edged. To your point 409A valuations being a fraction of the headline value of a Company's stock is one of the most tax efficient ways to get compensated for the risk you take on for joining a startup. Everyone has their own risk tolerance and I respect that, but anyone suggesting in a blanket way that everyone in all situations should forego options in favor of cash comp is utterly laughable. It goes without saying that everyone needs to do their due diligence and think hard before accepting any compensation plan. But it's not that difficult. Anyone who is capable of writing code is capable of understanding the nuances around options if they're willing to put their mind to it.
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Jun 24, 2020 05:28
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