

How to Intern for a Startup - aberman
http://blog.wepay.com/2010/03/18/how-to-intern-for-a-startup/

======
vaksel
so if Karl was so great, and made such huge contributions...why wasn't Karl
made a co-founder at the end of his internship?

Frankly I think working for a startup is stupid unless you get a ton of equity
to make the time worthwhile AND know that the company is capable of hitting a
big exit. Why? Because you are expected to put in the same time, make the same
sacrifices and take the same risk as the founders, but in the event of a cash
out you get squat.

Everyone always thinks of Google and Apple early employees who cashed out big,
but that's selection bias, most startups crash and burn...and those which
don't have smaller exits, after the VCs and founders take their cuts, as an
employee you'll be lucky to make up the difference in salary you gave up by
not going to work for Google or MSFT.

~~~
aberman
My co-founder and I had been working almost a full year before we got accepted
to YCombinator, and we made some pretty substantial progress building out our
back-office financial partnerships and getting savvy in the payment space.

Bill had walked away from a very lucrative job in finance, and I left a pretty
prestigious scholarship at NYU law.

We were far from conception stage when we brought Karl on board. When he
agreed to work for us, he knew he was going to learn a lot, get the YC
experience, make some good connections, and see what it was like to work for
an early-stage startup without having to make a life-changing commitment. If
the company went belly-up, he could just go back to school in the fall. In
fact, he _did_ go back to school at the end of the summer.

If we went belly up, Bill and I would have been shit out of luck. Karl only
came back _after_ we raised money and offered him a salary.

There is no way we would have hired Karl had we not had the opportunity to
work with him over the summer. But he _did_ choose to work with us, and he was
rewarded with a position that he would have had no chance of getting
otherwise. He still has the option to go back to school, but if he does, he
will have a head start on most of his peers.

Karl has been an incredible part of our team, and I am thrilled we have him.
That being said, we did not need Karl to get where we are, which I think is
the one prerequisite for giving anybody founder status (and the commensurate
equity).

I worked for a startup (poverty level wages) right out of college. It was one
of the best experiences I have had, and without it, there is no way I would
have started this company. I wasn't doing it in the hopes that one day I would
be anointed a founder.

~~~
codexon
_Karl only came back after we raised money and offered him a salary._

Did you offer him any compensation during that period to stay? I am guessing
no. Isn't it unfair to offer him equity only if he works for free without any
guarantee of compensation? What if you were stringing him along for free
labor?

 _If we went belly up, Bill and I would have been shit out of luck_

Employee compensation should not be related to how much risk the employers
have: it should be related to the market value of the employee. As others have
said, Karl also took a risk. If your company went under, all he would have on
his resume is an unknown company with less money than if he went for a paid
internship at Google etc...

If you are paying below market rate for talent, you should compensate through
equity.

------
krschultz
Way to go Karl.

I have a similar story from the other side. About 3 years ago I was a
sophomore in college looking for an internship. I knew I wanted to get into a
startup but didn't know how to get in touch with one.

I asked HN if anyone knew startups in the NYC area, a few people responded. I
emailed a few, I received a few responses. Most of them were unpaid, which I
MIGHT have been able to do but I do need money to support myself so it would
have been a few days at that internship and a few working a paying job. I felt
like a lot of the offers were just a dude in some apartment in brooklyn
hacking on a project that was calling himself a startup (again, ok, I'd do
that) but the ideas were not that good. I won't list them here, but suffice to
say it was weak.

Eventually I got in touch with Bug Labs, and over the course of a few weeks
hounded the crap out of them until finally they relented and agreed to an
interview. They were not looking for interns - I think there were about 8
people at the time and they had 1 round under their belt but that was it, and
working out of the old del.icio.us office which was quite cramped at that
point. I distinctly remember being asked "So what can you do for us" because
they really didn't think an intern could be of help. I think they pictured me
making coffee.

Anyway I convinced them somehow to start me a few hours and a few dollars, and
go from there. It became clear that I could contribute pretty quickly and I
went to full time and they paid me more what interns were getting paid
elsewhere, and the whole thing worked out really well. I came back the next
summer and there were 2 other interns. I came back last summer and there were
enough interns to have an area in the new office called "intern city", which
had 5 or 6 guys of various levels of commitment/pay/hours.

It was a great experience for me, vastly more responsibility than I would have
gotten at a "big" company like the article mentions, and I think I helped Bug
Labs a bit too. Not to mention the guys I was working with were some of the
smartest people I've ever met, and I got to be in NYC every day. I would say
it was one of the best decisions of my career to "Ask HN" that day.

Oh and now that I and the other interns have convinced them its worth having
interns around (and you're in the NYC area) apply for one!:
<http://www.buglabs.net/jobs>

(edit: weird coincidence with the kschultz/kschults thing to these stories)

~~~
yotery
That's pretty cool. Thanks for sharing. Do you have any suggestions for a
someone looking for an internship in the middle of no where?

~~~
krschultz
Its still about networking. In my case it was HN -> intermediate group of
people -> contact at Bug Labs -> interview. After working at Bug Labs for a
while my girlfriend was looking for a job and I introduced her to someone I
met at work who knew someone whose wife needed an intern. Neither were
advertised jobs. So my suggestion is find the tech crowd and see if they can
help you. Right now I'm looking for a job in a completely different part of
the country so I'm facing a similar struggle, you really should search for
companies that match what you are looking for, don't necessarily search for
people advertising internships. Once you find those companies figure out how
to talk to SOMEONE and work from there. Linkedin might be helpful.

------
wooster
Unpaid software internships are for suckers.

* If an intern is providing value for the company, they should be paid.

* The barrier to someone providing value as a programmer is extremely low. A bright, hard-working sophomore CS major should be getting paid as an intern.

* Students are often at an information disadvantage, in that they are not aware of how valuable they are.

* The idea that internships at Microsoft, Apple, Facebook, Google, etc don't offer the ability to write production code is ignorant of these programs.

* Companies which are willing to take advantage of an information disparity to underpay interns are also likely to underpay their other full time employees.

------
ig1
Note unpaid internships are illegal in many countries as they breach
employment regulations (i.e. minimum wage, etc.)

~~~
cj
Source: [http://www.onedayoneinternship.com/blog/are-unpaid-
internshi...](http://www.onedayoneinternship.com/blog/are-unpaid-internships-
illegal/)

The U.S. Department of Labor’s Wage and Hour Division created a test to
determine whether a “trainee” or intern is considered an “employee” based on a
1947 Supreme Court decision that evaluated whether “prospective train yard
brakemen were ‘employees’ within the meaning of the Fair Labor Standards Act.”
The test requires that all 6 of the following statements are true about the
intern’s time with the company.

1\. If the training, even though it includes actual operation of the
facilities of the employer, is similar to training which would be given in a
vocational school;

2\. If the training is for the benefit of the trainee;

3\. If the trainees do not displace regular employees, but work under close
observation;

4\. If the employer that provides the training derives no immediate advantage
from the activities of the trainees and, on occasion, the employer’s
operations are actually impeded;

5\. If the trainees are not necessarily entitled to employment at the
completion of the training period;

6\. If the employer and the trainees understand that the trainees are not
entitled to wages for the time spent in training.

This is the law. If any one of these six statements is not true about a given
internship, then the interns are considered “employees” and are subject to the
monetary provisions of the Fair Labor Standards Act. That means that the
interns are entitled to minimum wage and overtime compensation.

~~~
codexon
I think there may be a loophole.

Without naming any names, there was a law based start-up (with lawyers on the
board and founders) in the US that wanted me to work for them for free for a
while, and then maybe be hired as a salaried employee.

I declined the offer since it seemed like a poor deal and the company was in
dire straits, but they told me that they had at least one person work unpaid
for several months before being hired.

~~~
jackowayed
I'm pretty sure the only loophole is the necessary authorities not knowing
about it.

~~~
codexon
Are you saying that because you actually read the laws, or are you just trying
to sound clever?

Lawyers are a careful bunch, always having long disclaimers on their websites.
I have trouble believing they would bet the future of their million+ funded
start-up by depending on the ignorance of authorities. The IRS isn't stupid.

~~~
jackowayed
I've heard of this consequence of that act a few other times and never heard
"but you can get around it if ..." So it's just a guess, but not one that's
_totally_ unsubstantiated.

And plenty of people break tax laws. I read (on HN, I think) that something
like 1/3 of people who work as private contractors under-report their income
(which is part of why the IRS is cracking down on "contractors" that really
are more like employees). Lots of people work under the table. Until the IRS
started asking for the SSNs of people's dependents, lots of people had
fictional dependents. (Millions fewer dependents were claimed the first year
it was required than the previous year.) The IRS can only audit a tiny
percentage of filings.

And if it were a 100% unpaid internship where they didn't even pay for a plane
ticket or anything, there might be no trace of it anywhere that an audit would
see.

------
kschults
Thanks for the high praise, Rich.

If anyone's got questions about the experience, I'd be happy to share. Short
version: freaking awesome!

~~~
deltapoint
What made you decide to intern at a small startup versus a larger company? How
would you describe your experience at wepay?

~~~
kschults
I never really applied to the larger companies. It seemed like most of the
really cool opportunities there were full-time positions only. My friends that
had done internships at bigger companies hadn't enjoyed it very much, so I was
looking for something small.

When I met Rich and Bill, WePay jumped out at me because it was the most
startup-y of all the startups there that day. Every other company had a
product and was trying to build it up. WePay was just an idea at the time, and
it was obvious that I'd be deeply involved in the building and shaping of the
product, rather than adding on to something that already existed.

Asking me to describe the experience is such a broad question that it's hard
not to answer in a similarly broad manner. If you've got specific aspects that
you're curious about, let me know. As for generally, I absolutely loved it
(which is why I'm back here now). I certainly learned way more during three
months than I had in two years of school.

