
How to Build an Iconic Company – Keith Rabois [audio] - craigcannon
https://nugget.fm/rabois/
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ditonal
To his point about finding undiscovered talent, VCs are obsessed with finding
people they can underpay via selling them on their “vision” and “impact”. They
claim they can’t compete with Google and Facebook on comp, but the truth is
they don’t even try to do so by offering fair equity deals. Instead they use
rigged instruments like common ISOs with liquidation preference and 90 day
exercise windows to intentionally screw early employees over. If they offered
fair terms, many talented people would love to be involved in small companies
over FAANG, but these types insist on screwing people over and paying them
with speeches about “visions.” The vision of these VCs is always enriching
themselves.

It’s also absolutely hilarious that his example of finding undiscovered talent
at PayPal was by looking at Stanford students. He’s trying to make a point
that you should do out of the box thinking on recruiting and his best example
is recruiting from the most prestigious university in Silicon Valley. It’s
almost difficult to distinguish from satire.

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nickff
There was a very good talk (which I can't find right now) by Ben Horowitz
about why companies have to use certain instruments for equity-based
compensation. There are a number of legal and 'fairness' (HR and morale)
issues which limit what companies can and should do.

edit: found it, starts about 16:30 in
[https://www.youtube.com/watch?v=uVhTvQXfibU](https://www.youtube.com/watch?v=uVhTvQXfibU)

~~~
arcticbull
Not to mention ISOs are far better for employees than NSOs. Moving to RSUs
actually reduces the risk _and_ reward for employees as switching over,
startups usually cut the grant size substantially (as they are issuing
instruments that have intrinsic value at issue rather than no intrinsic value
at issue).

tl;dr: Founder shares >>> ISO > NSO >> RSU in terms of risk and reward.

~~~
mdon
ISOs are not universally better. They have a 24 month time requirement while
NSOs only have a 12 month requirement.

~~~
arcticbull
I believe selling within the 24 month window is considered a disqualifying
disposition which effectively just converts your ISOs into NSOs [1]

[1] [https://www.mystockoptions.com/content/what-is-a-
disqualifyi...](https://www.mystockoptions.com/content/what-is-a-
disqualifying-disposition-with-incentive-stock-options-what-causes-why-
company-cares)

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AnonyMouse007
So, is this the same guy who was shouting homophobic slurs at an instructor
while studying at Stanford in the 1990s and who was later accused by a male
employee of sexual harrassment at Square and fired?

~~~
facethrowaway
Yes. Since he is the Roger Stone of the PayPal Mafia, he’s not going to go
away anytime soon.

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papito
Usually it's 50% hard work, and 50% being at the right place at the right
time. Nothing is guaranteed.

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polote
Sounds like someone with a good SV network is starting the Twitter of podcasts

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rbranson
An investor taking credit for founder's work is probably _NOT_ the way to
build an iconic company.

[https://twitter.com/rabois/status/1260257254957215749](https://twitter.com/rabois/status/1260257254957215749)

~~~
georgewsinger
How is that tweet "taking credit for founder's work"?

Also have you seen this guy's resume?
[https://en.wikipedia.org/wiki/Keith_Rabois#Business_career](https://en.wikipedia.org/wiki/Keith_Rabois#Business_career)
Yeah -- he's in no need to take credit for other people's work.

I love taking advice from people like Keith Rabois because you know (unlike
99% of other VCs) he actually has experience building mega-unicorns himself.

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michaeln
I find that longer content works better for me when trying to understand
important concepts. I generally need repetition and context (why is this a
valuable concept? how'd you get here?). While it's quicker to digest bite
sized audio, I tend to forget the takeaway easily.

Have found these links to be helpful in understanding the concepts here:

* [https://startupclass.samaltman.com/courses/lec14/](https://startupclass.samaltman.com/courses/lec14/)

* [https://www.youtube.com/watch?v=9HGRap1cJ3k&feature=emb_titl...](https://www.youtube.com/watch?v=9HGRap1cJ3k&feature=emb_title)

