

What Startup Could Make Me a Millionaire in Four Years If I Got Hired Today? - ezl
http://www.quora.com/What-startup-could-make-me-a-millionaire-in-four-years-if-I-got-hired-as-an-employee-today?share=1

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acconrad
The answer is (effectively) none.

In other words, for a typical $15mm exit, as an employee (meaning no preferred
stock, and thus subject to a 50% tax rate on exit), you need to own ~13.33% of
the company (pre-dilution, and thus, pre-Series A employee) to net $1mm and
make you a millionaire. Of course, most companies go through plenty of
dilution. If typical dilution is half, you therefore would realistically need
to own more than 25% of a company to net $1mm on a $15mm exit.

No employee receives 25% equity of a company - _single founders_ are lucky to
have 25% when they exit. First hires / founding team are lucky to get between
2-5%. Assuming 3.33% (which is still high), dilution and taxes, you're now
looking at a $120+mm exit to become a millionaire as employee #1.

What is the likelihood a company exits for $120+mm? For YC companies, 10% have
exited (54 out of 548 according to YC List). Of that, only 3 have ever exited
over $120mm, which represents ~0.5% of all YC companies. Many are still active
and valued over $100mm, such as AirBnb and Instacart, but again, since they
haven't exited in your 4 year time slot assigned to the problem, we can't say
what they will be worth, or if they will even exit or IPO in the next 4 years.

So if you manage to land a first employee spot at a coveted YC startup, you
have less than a 1% chance of becoming a millionaire in four years from that
company. So your typical startup after series A is virtually impossible by the
odds. Therefore you either need to (1) start a company or (2) earn a high
enough salary (or mixed income sources) to save aggressively that you can be a
millionaire in that time.

