
Startup jobs with low salary and negligible equity, what gives? - 4k
	Hi HN,
I am a developer in my 30s with over a decade of experience. Being on a lookout for a new job, I have been researching lots of jobs lately (since I don&#x27;t mind moving, been looking in most parts of the US). I am divided at the moment between finding a startup job or finding a rather drab big corp job with good money.<p>I noticed some rather unsettling job adverts in the past while. Some pre series-A startups in the valley offering like $90k in salary for an experienced developer and 0.05% equity. I am just trying to understand who are their target candidates that they expect to join for such an offer (not to mention crazy working hours)?<p>I have a small family with SO not working. So, I&#x27;d be at best manage to make ends meet at that kinda salary in SF, plus the equity is negligible, and the work hours... seriously, am I missing something here? Who would take these deals? And then I often find popular posts on HN where founders are giving out about how tough it is to get good engineers!
======
patio11
Joel Spolsky had a really interesting insight [+] once about hiring pools:
they're disproportionately filled with people who you don't want working for
you, because if you're hireable, you exit the hiring pool fairly quickly, and
the dynamics of this system quickly mean that the pool is filled full of
people who aren't even FizzBuzz qualified.

I think the other side of the market is isomorphic to this: any publicly
available list of jobs is disproportionately filled with positions which
qualified talent has seen, evaluated, and rejected as unsuitable.

[+] Citation:
[http://www.joelonsoftware.com/articles/FindingGreatDeveloper...](http://www.joelonsoftware.com/articles/FindingGreatDevelopers.html)

~~~
fivedogit
_Note: I originally posted this reply about 2 hours ago and then deleted it.
But actually, I think it 's worth leaving up._

I really respect Joel Spolsky's accomplishments (I've mentioned him recently
in my own comments), but I found the blog post you cited wrong at best and
offensive at worst. It perpetuates one of the most frustrating things I
experienced while job hunting: the stigma of unemployment.

Even though I voluntarily left my last position, companies looked at my
candidacy very skeptically. Things I was told by companies:

\- "To be honest, we think you're an entrepreneur just looking to make enough
runway to move on to the next thing."

\- "Well, we're really impressed with you and you have the technical chops,
but we're concerned that you like to think on a higher level and might tire of
the daily nitty gritty." (Not true, and basically the same as above.)

\- "You did well on your coding interview, but we've got enough candidates in
our local area that we've decided to restrict our search to it." (i.e.
relocation jitters. Not coincidentally, when I finally found a position, it
was in my city.)

There are also people who are competent programmers, but come from strange
backgrounds, like the music major-turned-coder who posted the other day. I,
personally, am almost entirely self taught, haven't worked with other
engineers and have only coded on my own projects (you can see my github if you
want). People making hiring decisions are scared for their own jobs: they
don't want to be the guy who hires the guy who never had a "real" coding job
before. If it doesn't work out, I can see where that would come back on them
pretty hard. (Conversely, having worked at Google or Apple is a major bonus
for the opposite reason.)

Oh, and plenty of people underperform in on-the-spot coding interviews. Some
people are affected much more strongly than others by anxiety. It goes both
ways. I've read hiring managers on here gripe that they hired someone who
interviewed well but sucked in reality. And my guess is it goes the other way,
too.

So I find his assertion that people actively looking for work aren't the ones
you want to hire incredibly naive, elitist and just plain wrong.

~~~
itsybitsycoder
As someone who used to be very pro-self-taught programmers, I changed my mind
after actually working with some (and having to maintain the code of others).
Most of the ones I've run into have holes in core skills that are taught as
part of a CS degree, like threading, pass-by-reference vs pass-by-value, DB
normalization, separation of concerns, basic optimization, etc... To be fair a
lot of CS grads haves holes too (including me), but at least you can assume
some sort of base to work from. I'll never forget the blank stare from one of
my self-taught coworkers when I tried to explain that it was a bad idea to try
to do a full parse of a Turing-complete language with just regexes. He
seriously thought that if he just tweaked his regexes a little more it would
work.

Also, working on code in a team is very different from working on personal
projects alone. It adds in a whole bunch of things that aren't necessary on
personal projects. You don't just need to know how to use a VCS but how to use
it in a way that won't cause headaches for your coworkers. You need to know
how to write code that people other than you can read and maintain it. In many
cases you may be responsible for drawing out requirements from users. You need
to communicate effectively with the rest of the team. None of these skills are
exercised or put on display by your typical github repo.

So, personally, I can see why someone would be very hesitant to hire a self-
taught programmer with no experience. If someone has a degree and a little job
experience, you know they at least know enough to pass their courses and
survive in a team environment. With the unknown guy, you need to do some very
rigorous testing to make sure you're not getting a dud. A lot of companies
might not have the resources to do that.

~~~
weesals
Why is it a bad idea to parse a Turing-complete language using regex
expressions? I have implemented the XScript language from Age Of Mythology and
AOE3 with that approach; it seems to be quite efficient and flexible, is there
something I should look out for?

~~~
JoachimSchipper
(This comment is pretty informal; if you want to know more, look up terms like
"context-free grammar", "Parsing Expression Grammar", "Backus-Naur Form",
"regular language", or even "formal language theory".)

The problem is not "Turing-complete" (roughly, "can express arbitrarily
complex stuff"), but "context-free" (roughly, "you can parse without
considering what you've seen so far").

For instance, Brainfuck is Turing-complete (in the "Turing tarpit" sense) but
_really_ easy to turn into tokens (in fact, an informal approach may not even
distinguish between "+" and "the token 'increment'"). Even realistic languages
like C can be parsed without using anything much more advanced than regexes
(you need some ugly kludges to support typedefs, and you should pretty much
ignore newlines; one would typically use something more like yacc, but that's
still not a very sophisticated tool.)

On the other hand, XML or HTML (which are not Turing-complete, and,
informally, "not that expressive") are pretty much impossible to usefully
parse without extensively considering context - <a><b /><c /><d /></a> gives
and <e><d /></e> are "very different <d />'s".

I don't know XScript, but regexes may be a completely viable approach. In
fact, if your current approach works, it's likely good enough - it requires
some theoretical background to express _why_ you can't parse HTML with
regexes, but you'll run into lots of trouble if you try (leading to stuff like
[http://stackoverflow.com/questions/1732348/regex-match-
open-...](http://stackoverflow.com/questions/1732348/regex-match-open-tags-
except-xhtml-self-contained-tags/1732454#1732454)). Of course, there's value
in finding out your approach won't work before you've spent weeks of effort.
;-)

~~~
weesals
Thanks for the information! Looks like I've got some reading to do :)

------
Dalkanon
Most pre-Series A start-ups will offer (far) below market salary; they have
to, since, generally (and as another poster said), they have only $X00,000 in
the bank and no revenue. This is pretty typical.

What the 0.05% equity package indicates is that the founders probably have an
unrealistic expectation about how much their venture is worth at this stage.
I've seen this a few times in naïve, young (23-25 years old) first-time
founders that don't have significant amounts of experience working in start-
ups and/or technology in general. This trivial amount of equity is a huge red
flag, not only because its present value is negligible (guess what the risk-
adjusted rate of return is on a start-up run by first-time founders?), but
because it indicates that the work environment will likely be unpleasant
(hellish hours, frequently changing requirements, no clear vision -- common in
companies run by first-time founders).

Also, keep in mind: if these founders are foolish / naïve enough to think
they'll be able to hire a credible, valuable engineer with this package (they
won't), they're also likely foolish / naïve to get screwed by their investors.
Founders are only at the bottom-middle of the start-up hierarchy: VCs are
above them and LPs are above them.

~~~
beat
Probably the same founders who are on Quora, asking why their programmers
won't work 80 hour weeks.

~~~
thebiglebrewski
Can you link me to some of these so I can laugh?

~~~
brosky117
[http://www.quora.com/How-do-you-make-programmers-
work-60-80-...](http://www.quora.com/How-do-you-make-programmers-
work-60-80-hours-per-week)

[http://www.quora.com/How-can-you-inspire-programmers-to-
work...](http://www.quora.com/How-can-you-inspire-programmers-to-work-longer-
work-weeks-voluntarily)

~~~
mooreds
Yes, thank you. The questions are naive, but the answers do restore my faith
in humanity.

------
jacquesm
> Who would take these deals?

People that are insecure about what they bring to the table.

Pre series-A the risks are still huge and the stock should be priced
accordingly. Say the founders think a pre series-A company is worth $2M and
they offer 0.05% equity you could enter negotiations asking for 1% more if you
feel like it (and walk away if it goes below 75% of your counter opening bid)
if you can defend the position that there is still a 95% chance that the
company won't make it _unless_ they have you on board.

Otherwise price the stock at 0 and ask for a market conform salary.

They'll move. An offer is just an opening move, nothing more.

~~~
4k
This is definitely a great negotiation advice. I probably could negotiate
better terms. But still it'd still start us (employee and employer) on the
wrong foot. They'd think I am being greedy and I'd think this is a place where
founders would always try to screw me over - breaking mutual trust -
effectively ruining the positive spirit of working together.

~~~
lambda9009
> But still it'd still start us (employee and employer) on the wrong foot.

Absolutely false. I hear VPs all the time speak about trying to "close a
candidate" during negotiations, like a car sale. If you are a tough negotiator
you will only earn their respect.

------
hkarthik
The target candidate for these startups largely doesn't exist. Most folks
accepting such a salary in the Bay Area are recently out of college and living
in small apartments with roommates.

When it's all said and done, most of these startups will settle for a few
offshore contractors or hire remote people who live in cheaper parts of the
country where $90K goes a lot further.

The tried and true "solution" to this problem is to import a number of H1b
visa holders from other countries who are willing to work for the lower
salaries and accept the lifestyle choices that it imposes in the Bay Area. For
many of them, $90K in the Valley is still an upgrade from where they are
coming from.

For those of us with a decade or more of experience, it's best to focus on the
post Series A startups that have the money to pay. However, many of these jobs
involve cleaning up code written by those inexperienced folks who accepted
less pay in the early days.

~~~
im_asl
H1's working for lower pay seems like a fallacy. Part of the visa process
involves paying prevailing wages.

~~~
djb_hackernews
Yes by law there is a prevailing wage rule, however in practice this is
abused.

1) It is basically never enforced 2) The people rubber stamping the
applications don't have a clue about the person, the job, or the title

What happens is employers pigeon hole developers into less experienced roles
with lower pay grades according to the BLS (the source of data employers must
use to justify the wage)

For instance you can take a person with 10 years experience and either say she
is a 'Level 1 Web Developer' at 52k in SF, OR you can say she is a 'Level 4
Software Developers, Systems Software' at 134k in SF. Which would you chose as
an employer? And these are extremes, you can play somewhere in the middle
depending on your comfort.

[http://www.flcdatacenter.com/OesWizardStep2.aspx?stateName=C...](http://www.flcdatacenter.com/OesWizardStep2.aspx?stateName=California)
and then I selected the BLS region as SF and you can see all of the
occupations they define which sound similar and are described similarly, but
have wildly different pay scales.

EDIT: I'm reading the prevailing wage guidance document now[0] and employers
can actually provide their own wage data surveys to determine prevailing wage.
Wow!

[0]
[http://www.flcdatacenter.com/download/NPWHC_Guidance_Revised...](http://www.flcdatacenter.com/download/NPWHC_Guidance_Revised_11_2009.pdf)

------
lambda9009
Here's a way to counter this: interview, make them want you, and then decline
any offer explicitly because of the comp.

Startup founders are trying to go (even more) lean and cheap out on salaries,
relying either on inexperienced new grads, the insecure, or on a "rah rah go
team, the company is priority #1" culture of self-sacrifice. Don't play into
it.

------
lsc
>I noticed some rather unsettling job adverts in the past while. Some pre
series-A startups in the valley offering like $90k in salary for an
experienced developer and 0.05% equity. I am just trying to understand who are
their target candidates that they expect to join for such an offer (not to
mention crazy working hours)?

I had a similar experience recently. all the "startups" expected me to take a
30-40% paycut vs. the larger places, essentially because they expected me to
be excited about their company.

Which is weird, because if the startup doesn't get _really_ big, even if it
does okay, nobody is going to care it's on my resume. But the large companies?
especially the large companies with a reputation for high standards? they look
good on the resume.

Another funny bit is that the same thing, as far as I can tell, is true of
contract positions.

What irritated me is that I was going through headhunters... e.g. they were
already paying 30% extra _for the headhunter_ \- if they just gave me that,
I'd have been happy, at least for the first year.

The other thing was that they were _weird_ about money. I talked to one
startup and (after an 8 hour interview) they seemed super excited. the person
who would be my supervisor gave me his email, and man, I thought I was in.
"how much are you looking for?" I named a high number, about 10% higher than I
expect to actually get, because that's what I always do. Let them talk me
down. I even mentioned my bottom number "a guy who has been working for me for
most of his career just landed a job at $x" \- but nope, the mood immediately
changed; I was hustled out the door and the company went completely dark. no
response to the official or the personal emails. I finally got some bullshit
answer from the recruiter, where he read back the "why you shouldn't hire me"
things I give companies before any interview.

The solution? I ended up getting a contract gig at the large advertising
company in mountain view. I'm pretty happy with how things worked out; It's
closer to where I live in the south bay, it looks way more impressive on the
resume, and I need three people to sign paper before I do overtime.

~~~
debacle
> "why you shouldn't hire me"

Care to share this?

~~~
lsc
I don't want to spend 8 hours interviewing for a job and not get it, right? so
I try to get the likely dealbreakers out of the way up front.

Of course, it never works. You don't get to talk with the people that matter
until you are in the interview, at which point, well, I haven't found a way to
let them gracefully cut things off early, you know?

In this case, I had been working for a company that I owned most of for the
last half-decade.

Also, I have pretty good Linux systems experience, but my experience with the
latest applications is somewhat out of date.

I also told them what I thought I could get salary-wise; the exact number they
found so shocking later on.

~~~
debacle
I understand your reasoning, I was just wondering if you had like an actual
list you attach to your resume.

~~~
lsc
hm. that sounds like a better idea than trying to, you know, talk with people,
because the decision makers usually see the resume, while you only get to talk
with people that don't matter until the actual interview.

------
eddievb
A few thoughts:

1\. The definition of an "experienced" developer is subjective and varies
widely. Startups with younger management may (incorrectly or not) apply senior
labels to candidates with fewer years of experience and lower compensation
expectations.

2\. Anecdotally, I have seen startups in SF/NY take advantage of the lower
earning expectations of candidates who are relocating into those metros and
aren't prepared for the sharply different cost of living. There are places in
the US where $90K goes much further and is a more competitive offering,
especially for those who are willing to take less cash for the opportunity to
work on something exciting.

3\. "Developer" is a huge category. Some technical skills are far more scarce
than others.

------
carsongross
Low salaries and negligible equity are the natural consequence of there not
being enough technical talent in the Bay Area.

...

~~~
karmajunkie
How do you figure? This is exactly the opposite of what one would expect would
arise in a talent-constrained seller's market.

~~~
nilkn
I think he's poking fun at the currently trendy idea that there's a talent
shortage of programmers.

------
UK-AL
You'd think developers would be good with numbers. But put $ signs in front of
those numbers, and suddenly they're not very good. Trading away hard cash for
gimmicks, and a tiny amount of equity in early stage startups.

~~~
kordless
Did I mention we have free lunch AND dinner brought in each day?

~~~
avinassh
and a pingpong table too

~~~
lambda9009
and we're going to change the world

~~~
demircancelebi
and will make it a better place

------
untog
In short: you know too much. These salaries are taken by fresh college grads
who don't know better, and think the adventure of "a startup" is better than
working for a larger company (it can be, but there's no guarantee).

Many startup CEOs would like you to believe they are the only ones doing
interesting work, but there are plenty of larger organisations that are still
fun to work for, and more likely to value you as an employee.

~~~
lsc
>In short: you know too much. These salaries are taken by fresh college grads
who don't know better, and think the adventure of "a startup" is better than
working for a larger company (it can be, but there's no guarantee).

While you are right, you make it sound like $90K is underpaid for someone
right out of college. $90K is pretty good for a promising kid with a fresh
degree but no real experience. More than fair; they are unlikely to get much
more at a real company. It's kinda silly for someone with 10+ years
experience, but those 10+ years are worth something.

~~~
smeyer
>they are unlikely to get much more at a real company

It depends on the school. For my friends going into software out of college,
90k was towards the bottom end (the top end was more like 200k).

~~~
lsc
yeah, I'm talking about a normal uni. I'm sure if you go to Stanford (and/or
have parents who could get you into Stanford) the world looks like a very
different place.

Of the people I know, $130K+ is a reasonable salary, with some experience
under your belt. Out of college, you are looking at $80-$85K cash (maybe $90K
if you convert stock and other bits to cash) I do know a small handful of
technical people who can pull off $200K plus, but they are experienced and
staggeringly good, and have proved that they are staggeringly good. It's not
something that your regular programmer can expect.

------
snorkel
Bachelors. Not as in Bachelors degree, but literally bachelors: They're young,
cheap, work crazy hours, and easily seduced by free pizza - the ideal startup
employee.

~~~
lucaspiller
Can agree. I used to be like this and loved the free pizza. Now I'm earning
more working my slightly less shiny corporate job with sensible hours. I have
time to cook decent pizza though!

------
OliverJones
Don't worry about playing hardball in the negotiation. You can preface your
negotiation by saying something like this.

"As long as we're on opposite sides of the negotiating table, I am going to do
my best to get a fair share of possible upside from your company, and a decent
salary. When we conclude this negotiation fairly, we'll be on the same side of
the table and working towards the same goals."

"Now, I want half a percent and $110K."

Keep in mind that your BATNA (best alternative to a negotiated agreement) is
to say, "No thanks. Good luck." They need to hire somebody: time is money at
their stage of business. You don't need to jump into their job.

But don't have this conversation at all unless you think their business idea
is worth five years of your life.

~~~
ef4
> time is money at their stage of business.

Yes, this is one of your best sources of leverage, as long as you can take
your time and be picky (which you absolutely should be able to do if you're a
working programmer).

The longer you keep them talking to you, the better. They can't waste time
forever, and their own sunk cost bias works in your favor.

------
bryanlarsen
Equity positions are very negotiable. Ask for more equity, a _lot_ more, like
1 or 2 percent.

~~~
4k
To be honest, I am half-scared of taking equity instead of cash pay. The
reason is, I don't understand it as well as I should. It always scares me to
think that through some VC-magic, whatever equity I have could end up nearly
worthless (possibly an irrational fear since I don't understand the whole
mechanism).

~~~
otoburb
This article[1] may help you to understand why you (rightly) have a justified
fear of equity dilution as the company grows and (probably) raises additional
capital through future funding rounds. The relevant quote: "When you are
issued employee equity, be prepared for dilution. It is not a bad thing. It is
a normal part of the value creation exercise that a startup is."

The article tries to explain how equity dilution (for both founders and
employees) pans out. It is worth a read.

[1] [http://avc.com/2010/10/employee-equity-
dilution/](http://avc.com/2010/10/employee-equity-dilution/)

------
7Figures2Commas
What are you expecting from pre-Series A startups? There are lots of pre-
Series A startups with six figures in funding and little to no revenue. For
obvious reasons, most of them are not going to be paying $140,000/year and if
they are, you might not be comfortable with the runway risk.

In terms of equity, since you mentioned that you are the breadwinner for your
family, why are you sweating the equity? A lot of folks here will no doubt
suggest that you negotiate for more equity, but equity won't pay your bills.
If cash is your biggest concern, negotiating around equity is pointless.

It sounds like you want a very early-stage startup job with BigCo-like pay,
meaningful equity and reasonable hours. For the most part, this is a dream.

~~~
ebiester
So, why the hell would anyone leave that much money on the table? If you're
asking me to do something crazy, you better be willing to pay for it.

.5% equity, especially when it will end up being diluted, is a fool's game.

~~~
7Figures2Commas
> So, why the hell would anyone leave that much money on the table? If you're
> asking me to do something crazy, you better be willing to pay for it.

At most early-stage startups, _there is no money on the table._ If you want to
maximize your earnings, focusing your job search on pre-Series A startups is a
horrible waste of time.

The OP seems to be asking for startup excitement, reasonable hours, high
salary and meaningful equity. At a pre-Series A startup, you _might_ be able
to find two of the four.

> .5% equity, especially when it will end up being diluted, is a fool's game.

Rhetorical exercise:

1\. What's .5% of $0?

2\. What's 2% of $0?

3\. What's 10% of $0?

Equity at early-stage startups is a fool's game.

~~~
ant6n
The expected value of a startup, even pre-Series A, is not 0.

~~~
7Figures2Commas
You seem to be confusing the expected value of a startup with the value of
one's equity. There is a reason that the vast majority of vested stock options
go unexercised when employees leave companies.

Additionally, you are not factoring in liquidation preferences. Rhetorical
question: what's 10% of $10 million when your investors put in $5 million and
have a 2x liquidation preference?

~~~
ant6n
You seem to not understand the notion of expected value.

If the strike price is a concern, it could probably be negotiated down. I had
the impression the they have generally gone down anyway.

~~~
7Figures2Commas
> If the strike price is a concern, it could probably be negotiated down.

Please ask a qualified accountant about Section 409A of the tax code and what
happens if you're granted stock options at less than fair market value.

------
alain94040
_$90k in salary for an experienced developer and 0.05% equity_

Yes, that looks wrong. Equity should be 10X more (0.5%). Whether it's a good
deal for your situation or not is a different discussion, but at least that
would be more in line with typical deals.

------
beat
Are you living in the Bay area now? If you're not, and you're living in a city
with any sort of active startup community at all (like any big city in the
midwest, for example), try finding a startup at home. It'll be cheaper, you
don't have to uproot your family, and you might get a much better deal.

------
wildpeaks
90k is "low" ? Don't ever leave the Valley, you'll be even more disappointed

~~~
xenosapien
It's definitely low, even outside of the valley. Probably not low in the mid-
west.

~~~
Someone1234
Around here, most programming jobs top out around 60-70K. I've seen a couple
for around the 90K mark, but not many and most require quite a lot of
experience.

Near Utah.

~~~
joshdance
Top out? I started at 65k with one year of experience in Utah Valley. And the
company I worked out didn't pay super well.

------
minimaxir
Relevant to this discussion: A startup job ad for $40k salary in SF.

[https://news.ycombinator.com/item?id=8880544](https://news.ycombinator.com/item?id=8880544)

~~~
aledalgrande
disgusting

------
pjdemers1
I read this as "this is the worst job at a 'startup' that's never going to
have big exit"

------
tarr11
They are fishing. All they need is one developer to take this deal, not all of
them. Just ignore it and move on.

------
klochner
They're offering you the comp of someone who just graduated, they may not
realize that though.

~~~
dlp211
I haven't even graduated and I wouldn't touch that offer with a 10 foot pole.

~~~
klochner
You may need to recalibrate before graduation, it's about right for recent
grads, depending on amount raised and team size of course. You'll get more
cash comp post series-A/B/C, with lower % equity.

------
endeavour
It's even worse in Europe.

------
eyeareque
You can always negotiate more, if you can convince them you are worth the
investment. They might be willing to shell out more compensation if they
really want you.

And not all corporate jobs are boring. Find one that fits what you like to do.

------
qodeninja
If youve got a job already just hold tight, Q1 isn't even over yet. Most
hiring kicks up again right before the spring when the sun is out again

If startups aren't willing to provide the means they don't deserve good
engineers.

------
bubba_sparks
Was this site used in your search? It seems geared toward sf startups:
[https://www.startupers.com/](https://www.startupers.com/)

------
MyNameIsMK
Here's a suggestion, as an experienced developer, why don't you take a risk on
yourself and start your own company?

~~~
ibebrett
That makes very little sense. You shouldn't start a company unless you have a
very strong idea, evidence that it makes sense, capital etc.

------
hyperbot
If the pay is not high enough for your needs, you shouldn't bother looking at
startups, or at least you shouldn't be looking at pre-series-A startups.
Everybody has their own motivations for why they choose to work somewhere, and
money/compensation isn't always the top consideration. At early-stage startups
where money is tight, salary will usually be difficult to negotiate too much,
but equity can be negotiated more easily.

~~~
TheCoelacanth
The equity is preposterously low for an early stage startup. Even if the
company were incredibly successful and ended up being worth $100 million
(unlikely) and your equity wasn't diluted at all (unlikely), your equity would
only be worth $50k.

------
malditojavi
Startup jobs are the new corp jobs.

~~~
percept
And vice versa, as someone at corp decided to "innovate." (The hours are still
better for most, though.)

------
informatimago
You missed H1B.

~~~
montz1
Shameless plug - Find all salaries reported by H1B employers including
startups at [http://salarytalk.org/search](http://salarytalk.org/search)

