This is the other unseen cost of being in a bubble. All the best talent gets tied up in lame duck me-too companies, and makes it impossible to hire people for the good companies.
Doesn't the fact that the talented engineer picked a lame-duck company cause him/her to lose points? A good engineer should be equally good at making big bets, especially when it comes to picking a company he/she wants to work for.
Working for a well funded lame-duck company can be more profitable than most startups. Pulling some numbers from thin air:
Conciser the breakeven point on 180K for 5 years vs 100K for 5 years? Well, 80K * 5 = 1/4 million + some interest. But what do you compare that to? let's assume it's been funded and you are getting .1% of the company. Well breakeven is now a ~250 million sale but what are your chances of hitting a 250+ million sale?
PS: This is on the extreme end, but it just goes to show you that trading significant amounts of income for stock in funded companies is rarely worth it.
Nah, I don't think so. When a company like Color (and honestly I don't know that Color is a lame duck, I'm just using them as an example) has $40 million to burn they can afford to pay a kid right out of school $150k/yr + $1M in equity. Most startups can't, even if they are totally viable high quality businesses. So in a non-frothy market those good quality companies would be able to find talent - but in this kind of market it's borderline impossible unless you're a super-hyped rock star startup.
Anyway, I'm probably just jaded because it's been so insanely hard to hire lately (compared to ~1 year ago.)
Do you know it to be the case that Color has paid a kid just out of school $150k + $1M in equity?
When I was trying to hire Rails & front-end folks recently I was seeing the market around $100 - $130k for reasonably experienced people, and had success hiring in that context. $150k for someone out of school seems unlikely to me.
Re: Color - I assume they raised their $40mm at something like $100mm post-money, which would mean a 1% option grant. That strikes me as far outside the norm for any engineer that isn't a core part of the team.
