

Employee at early-stage SF startup. Should I stay or should I go? - seekingcharlie

I&#x27;ve been working here for 8 months, leading design &amp; product. We&#x27;re a 15 person team, VC-funded (raised an A round a few months ago for $2 mil). We aren&#x27;t anywhere near profitable (hardly any revenue) - to the point that performance &#x2F; greater responsibility isn&#x27;t being compensated with cash because &quot;we can&#x27;t afford it right now&quot;.<p>To be fair, I&#x27;ve been told that no-one is getting cash increases. I was given extra equity, but that means nothing to me.<p>I like my job but feel like I could be making more elsewhere. Am I being a spoiled brat? At what point is it time to jump ship?
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davismwfl
No one should work at an early stage startup with the expectation to make a
high market salary or get regular raises in the early years. Not that a
startup should pay like crap (or they won't exist long), but usually you work
at a startup because you believe in the idea, team and feel you can help make
it real. The payoff for you is in the equity turning into real money after
some years of work, but that money can really be life changing if you are in
early enough with enough equity.

There is nothing wrong with admitting that it isn't for you and you'd rather
work at a more mature company. It is whatever works for you, but just
recognize this is what a startup or really any young business is generally
like. If you don't think equity is a good reward though, I think your answer
is clear, move on.

BTW -- I don't think you are a spoiled brat, but you are figuring out that
this just may not be for you. And if you figured this out now, its your cue to
move on likely. Or accept that equity is the reward and jump on the bandwagon
to make it super successful so you and the team can get the satisfaction of
making something cool and hopefully the monetary rewards.

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dreamweapon
_I was given extra equity, but that means nothing to me._

If you don't believe in the equity, then the answer is immediately: Yes.

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alain94040
Agreed. The reason to be at such a place if because you believe in the
product, you are excited by the growth and by the ability to have real
influence on the product. You believe it's going somewhere. If this is just
like any other job to you, then yes, move on, you are in the wrong place.

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byoung2
It sounds like it is still pretty early in the game ($2 million A round, 15
people), so lack of profit shouldn't be an issue (did you mean revenue?). If
you don't feel like the business will be on the path to success (equity means
nothing) or you are not willing to take the risk, then you should quit today
and just go work somewhere that pays more and is stable (BigCo). If you feel
like the potential upside from equity say 5 years out is worth the tradeoff in
salary now, then you should stay.

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seekingcharlie
Yes, we're generating about $1,000 per month revenue.

Given the funding in particular, I expected there to be room to move in terms
of my salary & I'm disappointed that there isn't right now. Is 'we can't
afford it' an appropriate response at this stage of the company?

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trcollinson
Just do the simple math. Your company received $2mm months ago and has 15
employees. This is ~$134,000 per employee for a year. We'll imagine they will
push towards a Series B round within 12 months. They are receiving $1,000 per
month in revenue. I'll assume you mean gross revenue here, net would be a
different calculation entirely.

With that math in mind, imagine the salaries, benefits, employer paid taxes,
equipment cost, and office (per employee). Assuming that is 100% of their
costs (we didn't even talk about infrastructure costs, marketing, accounting,
legal and the meriad of other costs associated with running a startup), does
this add up to more than ~$134,000 per year per employee? I would imagine the
answer is yes. So, yes, they can't afford to give you more. Frankly, they can
hardly afford the employees they have now. In my view, that's a really tight
budget.

What should you do? Well that is a really personal question. If I were you, I
would decide if you would like to stay or not, but don't blame them for being
good at figuring out the math of the situation. They are on a shoestring
budget, I have zero doubt of that. I would most certainly tell you that "we
can't afford it" right now, if I were them.

Now, if they are making $1,000 per month net revenue, then they are
profitable. That would be a different situation entirely and they could
actually give you more.

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jmalicki
Net revenue isn't operating income - it does not include engineering or
administrative expenses, where as net income does. So even with net revenue,
they would not likely be profitable.

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debacle
A 2 million round for 15 people seems very sparse. That's either an incredibly
short runway or you're all working for peanuts.

Keep in mind that your equity is 90% likely to be worth nothing, so you should
value it at 10% of its face value, if that. If they're expected valuation is
<20m and your equity is less than 1%, you're basically being scammed.

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fsk
Start looking around. It doesn't hurt to look.

Also, it sounds like the startup will be deadpool in a year. Better to look
now while you can patiently shop around, than wait til the end.

If the startup fails, the equity is worth $0. If you start looking, you'll get
an idea how much salary you're giving up.

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rudimental
"I like my job but feel like I could be making more elsewhere."

Most likely you can be making more elsewhere. You're not a spoiled brat, you
just need to figure out what's important for you right now and get in an
environment that can give it to you. There's day to day and the big picture to
consider. Money is definitely a part of what's important for most people, but
it varies, same with autonomy, chemistry with your team, liking the product-
every big thing about a job.

Definitely look around, someone with design and product experience can find
another job right now in the Bay Area. You might find a better fit.

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cblock811
A few other things to consider:

Are you learning new skills or honing your current skill set? If so is that
worth the time to stay?

Are you increasing your network by being with this company?

I would value those two points more than a pay increase, but I'm also rather
new to this industry. It's hard to quantify these things and weigh the
opportunity costs but it's something that I consider when I look at my job.

