Sorry, but the original poster made a huge mistake. The only part of his reasoning that makes sense is the part about the guy only wanting to work on one thing. That is definitely unacceptable, but it is unacceptable at any programming job (except the crappiest ones).
Someone who is an expert and highly valued is exactly who you want at your early stage startup.
It sounds like this guy actually knew what he was talking about with regards to equity.
Equity is crap. It's a lottery ticket, like someone said. it's fun to think about what might happen if you win, but don't bank on it.
I've been in 4 startups, two of which were bought out "successfully". My equity payout? Zero. Sorry, your common stock is worthless while the founders' preferred stock makes them millionaires. Luckily, I didn't lose out financially, since I didn't take a pay cut to work at these startups.
I agree, job security is a non-issue. We're programmers, and if we're any good at all, we're in demand.
However, no one with half a brain is going to take a 60k pay cut on $150k. Do you think we don't have bills? Someone who has been living on $150k probably owns a half million dollar house. Are we supposed to sell our house to work for your startup? If I'm a founder, I might be willing to do that. Otherwise, no.
Talk to me about the expected return on investment for this $60,000 in stock I buy every year. Since 95% of startups fail... I better be getting enough founder stock (yes, not common stock) that if we have a mildly successful IPO (I'm talking like $10 a share) that I make more than 20 times my ~240k investment.... that's over 5 million dollars - 500,000 shares of founder stock, at least.
Let's talk reality, though. Stock is what lets you compete with Google. Google gives you nearly infinite resources, a fantastic stamp of approval on your resume, the chance to work with tons of really smart people, and crazy good benefits. In order to compete with that, you need to pay equal or nearly equal, and use the stock to make up for the stuff you can't actually afford.
This is why so many startups fail. They only hire the people dumb enough to think equity is really worth something.
Someone who is an expert and highly valued is exactly who you want at your early stage startup.
It sounds like this guy actually knew what he was talking about with regards to equity.
Equity is crap. It's a lottery ticket, like someone said. it's fun to think about what might happen if you win, but don't bank on it.
I've been in 4 startups, two of which were bought out "successfully". My equity payout? Zero. Sorry, your common stock is worthless while the founders' preferred stock makes them millionaires. Luckily, I didn't lose out financially, since I didn't take a pay cut to work at these startups.
I agree, job security is a non-issue. We're programmers, and if we're any good at all, we're in demand.
However, no one with half a brain is going to take a 60k pay cut on $150k. Do you think we don't have bills? Someone who has been living on $150k probably owns a half million dollar house. Are we supposed to sell our house to work for your startup? If I'm a founder, I might be willing to do that. Otherwise, no.
Talk to me about the expected return on investment for this $60,000 in stock I buy every year. Since 95% of startups fail... I better be getting enough founder stock (yes, not common stock) that if we have a mildly successful IPO (I'm talking like $10 a share) that I make more than 20 times my ~240k investment.... that's over 5 million dollars - 500,000 shares of founder stock, at least.
Let's talk reality, though. Stock is what lets you compete with Google. Google gives you nearly infinite resources, a fantastic stamp of approval on your resume, the chance to work with tons of really smart people, and crazy good benefits. In order to compete with that, you need to pay equal or nearly equal, and use the stock to make up for the stuff you can't actually afford.
This is why so many startups fail. They only hire the people dumb enough to think equity is really worth something.