
Ask HN: First Engineer at Seed-Stage Startup – Salary Advice? - RightBack
Using a throwaway.<p>Background: I am the first employee&#x2F;engineer at a B2B startup in the Bay Area that just closed seed round. I am responsible for building out our product and managing our two junior devs. I have a masters degree if that matters. My current salary is ~$85k with 2% of company in stock options (usual 4yr vest, 1yr cliff).<p>I am wondering what a fair salary I should be getting, my anniversary is approaching and I would like to ask for a reasonable increase. Thanks in advance HN!<p>edit: for clarity, I have 3 years + experience building web apps, 2 of those building my own startup part time while in college. I would say I am at a mid level engineering level but not up to senior level yet.
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davismwfl
There is no normal honestly.

Experience counts a lot and IMO the amount raised does as well along with your
equity stake.

Not knowing how much experience you have it is hard to say. You could be fair
now or low or frankly high. Obviously for where you live I doubt you are
overpaid.

I will say this I don't think based on the very limited data that you are paid
poorly for an early stage company.

If you want to shoot me a personal email with more details (or post here)
happy to give you a more detailed opinion. I myself am the CTO for a company
that has raised and have been a founder myself a few times so I feel I am a
fairly good judge on this stuff most of the time.

BTW. There is nothing wrong with asking for a little more as the company hits
certain milestones. Just be fair and honest.

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RightBack
Thanks for the reply, I appreciate the honesty. I have added my experience to
my post now.

Some more info: We raised a ~$1m seed recently at a $6m post valuation. As I
mentioned in my edit, I have ~3 years experience building web apps for
startups and have definitely the experience, knowledge and responsibility of a
mid-level engineer at a larger tech firm. I do really like working with our
team and our product is solid, we're at the stage where the business will
either thrive or die in the next 6-12 months.

~~~
davismwfl
Given all that, you are not being taken advantage of, although I could argue
the equity to salary ratio is off, so either a little more salary or more
equity. However, with only a $1M raise there isn't a lot of room to give you
more salary, and I've seen really small employee equity pools in startups in
the past few years so there may not be much there either. If the company had
raised $3-5m then yea it isn't rare to see a CTO type in the mid to higher
100's, but then that person usually will have quite a bit more experience than
you do.

This isn't a knock against you in any way, this is just the realities of
startups and business. While it is always fine to ask for a little more when
certain events happen, like fundings, I don't think there is much room here
for you to get any change. Although you might be able to negotiate $5-10k. You
could angle for a bonus at a big milestone in the next 6-9 months, where 5-10k
could be negotiated as a one-time bonus if you do well. That's easier on the
business because it isn't an on-going operational cost and it can be justified
by you doing something that really benefitted the business. Mind you it has to
be more than you already promised or why would anyone agree to it.

If you want/need to be in the six figures (we all have reasons for what we
need/do), find a job at a larger company/startup, no faulting you in that if
you have a need/want.

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RightBack
I can see the approach of negotiating a bonus structure working. I posted the
question to get closer to the truth, not boost my ego so I'm thankful for you
calling it as it is.

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mchannon
Regarding "thrive or die", the usual case is neither. The usual case is
"zombie", continuing along, surviving, but failing to really get ahead. In
many ways it's worse than thriving or dying, since at least dying frees you up
to get a fresh crack at things.

With a company woodpile of $1M to burn and a stake that's currently worth
$300k in Powerball tickets (eventually to be $1.2M in Powerball tickets if you
keep working there), you could be doing worse. But you're not doing that well.

Consider getting a job at a BigCo in the bay from here on out. $185k + stock
options that you can actually turn into cash seems very possible. Your current
company with only $1M in the pile is not going to be able to move your needle
all that far from the vow of poverty you took, not without raising more money
or bringing in substantial revenue. In many ways, I would argue it's already
failed if you're not in the chips after a year. You've met your cliff, so you
can take the money and run, so if somehow the company makes a $100B valuation,
keeping your 0.5% on top of a decent salary elsewhere seems substantially less
risky than grinding poverty to raise the number past 1%.

It's not about what's "fair", it's about what's possible. Your boss will tell
you his hands are tied when it comes to bumping you into the six figures.

If you don't want to "break up the band", and you want to "see things
through", and you can tolerate continued poverty, then I submit to you you
don't need to ask for a pay increase. Otherwise, it's not your boss you should
be asking, but a competing company. Silicon Valley VC's aren't the only ones
selling dollar bills for fifty cents.

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RightBack
I have considered exercising my options and leaving after the 1 yr mark and
headed to a larger co. my distaste for large organizations complicates this
slightly.

re current valuation of stock options: the math is off by a factor of 10, 2%
of 6m is $120k - does this change things in your eyes?

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aey
If you are planning for sticking around another year, ask for more stock,
double it! They can’t double your salary, so you are not missing out on a
meaningful opportunity cost of capital.

Right now your best bet to increase your grant as high as you can until the A
round. After A the options will be too expensive to excersize until a
liquidity event.

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howon92
I think you might be getting too little. It's common to get 200k+ in Bay area
with your level of experience. That doubles once you become senior (usually
3-6 YOE). So think about how much less you are getting paid by working there
and see how much of that delta makes sense for the amount of learning you get.
As a first engineer, you have a much bigger scope, unique opportunities, a
chance to network, etc. Think about how much that's worth. Sometimes, it might
not even be true that you are learning more at a startup and just overworking.
So do your own cost-benefit analysis carefully and ask for a raise you think
is reasonable bases on the market rate and the amount of unique learning you
get from your company.

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sethammons
1 year "real" experience equates to $200k?

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lettergram
IMO "Fair" is in the eye of the beholder. My guess, is if you're asking here -
you don't think it's fair.

~$85k in the Bay Area isn't a ton of money. After dilution (post seed) 2% will
be much smaller. If you're the only technical found and the only one who could
build the product, I personally would ask for more. HOWEVER, if you think
someone can do it other than you, you may not command such a deal.

Regardless, I always focus just on the base salary. At ~$85k, I'm assuming
they aren't covering healthcare, 401k, etc. That's maybe 35% - 50% (with
benefits) less than you could get at a larger company.

Do you think the companies worth it?

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RightBack
Thanks for the input! I know fair is such a subjective word.

The thing about being hard to replace is we are using a fairly popular stack
(rails) that although I have deep product knowledge, it would be possible to
find a replacement dev, but at what salary is another question.

I actually get subsidized health care which is great, no 401k however.

I do think the company will be successful, the magnitude of success is still
to be determined, the size of my equity grant would require a pretty large
exit for a reasonable payout.

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pryelluw
A salary is not about fairness. What is the market rate for someone with your
skills, experience, and credentials? Look it up.

If it turns out you are being underpaid, why should you continue to work at a
discount?

Also, the stock options are worthless. They are not something to count on as
having real value. They are a bet you have taken. Pure speculation.

~~~
RightBack
Very good point on market rate, one thing I've struggled with is getting
accurate salary info for early stage startups, it's pretty easy to find rates
for the FAANG companies which are noticeably higher than the rest of the
market. Have you any resources you would recommend I look at?

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pryelluw
I have plenty of experience in the startup world. Here is my take around
salaries:

\- You will be pressured into taking less. That's normal founder hustle.

\- A founder is the one taking the risk, not you. Thats why stocks are
worthless to you. Dont drink the "we are in this together" bs. You are not. If
you were, then youd be a co-founder.

\- You wont find startup salary data. However, it is typically less than an
established company. Why? because they cant afford it. Startups have runway,
which is how much money they have to try and make it (survive). In contrast,
an established company has a budget, which is how much money they have for a
period of time (they dont need to survive).

\- Always ask market rate based on an average of published data. My take is
you should be closer to $120k in SF (if not more).

\- The fact that you are being underpaid just shows how skewed your sense of
fairness currently is. They didn't care about fairness when your offer came
through. They only cared about how much they can afford to pay you to avoid
losing you. You are the one who decided what was fair. You alone. Thats why
you have the power to decide it is not fair anymore and move on.

\- Start shopping around this very moment. Dont think options are scarce. This
is a developers market.

\- You manage two people and have a masters. Dude! You are a technical lead.
Open your eyes! Technical leads make more than a regular developer (senior or
not). It also makes youna senior dev ...

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rboyd
At your stage it's exceedingly likely that 2% is much too low.

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RightBack
What would be your hunch on a fair % ? also does the fact that I've worked
with this deal for almost a year make it difficult for me to ask for more?

