Having only worked for larger companies (RSU stage), I'm curious what the typical breakdown of founder to early employee to investor to later employee equity looks like. I'm sure it differs pretty wildly, but I'd love to know what a 'typical' case for mid-to-late-stage start up looks like.
This always seems like a huge scam to me. Employee 1 gets 1%? It seems unfair from multiple perspectives.
One is just a straight up naive sense of fairness. If I'm going to be in the trenches with you, I had better be able to see my ownership % in a pie chart with my glasses off. If we're out here both making chairs and when we sell a chair for $100, you get $85 (assuming someone took one of the standard-ish seed rounds that are usually 10-20%?) and I get $1? No thanks.
The other sense is aware that the founder is taking various risks and blah blah blah. Ok whatever. Let's pretend somehow 1% is a fair number and just look at it from a payoff perspective. 1% of stripe? Yeah I'll take that. 1% of the other 1000 startups who had mediocre exits or just muddle along to finally do some kind of tender? I'm barely breaking even. 1% of the other 10000 startups that just folded? At least I can mop the sweat off my brow with the paper I signed.
It seems like the only reasonable way to look at this is you either join a company for a competitive wage and get WLB, or you join a rocket ship in the hopes of becoming genuinely wealthy while pouring your blood, sweat and tears into it. So taking 1% and a shitty salary and having terrible WLB sounds like a huge suckers game.
This isn't a terrible take, but there doesn't seem to be a shortage of people for whom this doesn't feel like a scam.
I'm not particularly fond of the founder hype train, and the typical line is indeed "various risks and blah blah blah" but what's often left out is that employee #1 at a post-funding startup is a pretty different job/profile than co-founder.
Most employee #1's don't have relationships with investors, might not be as employable outside the startup world, and they don't sit on the board, don't have the same formal responsibilities, and rarely are able to raise money to found their own startup -- in fact, this is the often the key reason they're even interested in being employee #1.
It's a market, and as a market I'm not sure it's that skewed.
Want 25%+ of the company? Start it. There's no cabal preventing you from doing that. Have better options than 1% of a likely-dead startup, that pay more and have better WLB? Take them.
After all, few industries give any employees equity. First employee at an ice cream parlor? 0%. First employee of a hedge fund? 0%. First employee of a medical practice? 0%.
Equity grants can be motivating and aligning, and frankly more industries should probably consider them. But not that many people are in a position to found a startup that can raise money (larger equity grants are much more common for pre-external-funding employees) and this differential reflects that.
Btw, "1% of the other 10000 startups that folded" is worth about the same as a founder's 40%: $0. The issue is the middle ground, but there the equity grant is often not worth the paper it's written on: typically the acquirers dictate who gets the money. 1% or 5%, unless the acquirer is trying to retain you, chances are you'll see nothing even if the nominal payout is large.
Anyway, the upshot is what people have been saying for decades: don't do a startup for the money. Do it because you want to be part of that kind of thing, and treat any exit money as a bonus.
Are you talking about 1% and no pay or 1% and a pay?
If I'm getting no pay, I'm definitely a co-founder, but I'm getting a pretty good salary from day 0, I don't think that's too bad.
Say you get offered $200k/y +1%, if things go well, in 4 years you got $800k in cash and your 1%. If things go south, you still got $800k, a cool title, worked on a hopefully interesting product with a nice team. Doesn't sound awful to me. No?
Glad to see someone else say this. I feel like I'm crazy reading these replies about being ripped off. I've been working startups my whole career, earning salaries, working with good people and having fun at times. Sometimes the equity even pays out, but that's not my only financial "egg".
Only after they managed to raise any money, which is not as common as many people assume. And whatever you pay yourself as a founder initially eats into your runway, so that's always a tradeoff.
If you don’t believe a startup can be the next Stripe, then you definitely shouldn’t take 1% and work as one of the first employees.
Also, the risk profile and expectations are vastly different between founders and first employees. E.g. founders are expected to not quit unless the company collapses completely, first employees can quit whenever they wish. Also, if the runway is short, founders work for free and can even go into debt, whereas employees have a stable salary.
Outside US but I never regret getting equity/options and usually it went hand in hand with the higher paying jobs (paltry compared to US standards!) rather than being a salary/equity tradeoff. Atlassian is a great example though I have not worked for them.
I think companies here tend to have less fuck you over terms in employment share schemes but OTOH are less likely to get rich but one company made several employees rich (does 8 figures count?) here.
It's not even remotely fair, but it does follow the golden rule: he who has the gold makes the rules. The founders were the ones who investors were willing to trust their money with. Employee #1 was not.
Unicorn or bust is the name of the game. Once you understand that it’s not so bad.
It’s also possible to level-up pretty well from an acquisition, where maybe the equity was not life changing but you’re now in a bigco at a higher level than you’d otherwise be. The trap there is that many startup folks are not cut out for bigco life.
But yeah if you were dreaming of sailing off into the sunset you need to be a founder (or remarkably lucky). That’s one reason why there’s so many startups.
But they would. For one thing, a human would just drive away. For another, a mob would have no reason to attack a broke-ass taxi driver, while they have every moral justification to attack a $3T gigacorp built on surveillance capitalism.
They don't have any such moral justification, and they do attack broke-ass taxi drivers despite having no justification for that either (just substitute, e.g., "small locally owned shop" for "taxi driver" in the London riots).
Maybe the Tutsis had autonomous vehicles or were tools of surveillance capitalism? You can never be too sure right? After all, their attackers as you make clear must have had "every moral justification" to kill hundreds of thousands of people right ?
They don't operate in snow now, but everybody was like "This is great, but it doesn't work in the rain!" this time last year. I've now taken many flawless rides in outright downpours in SF. It might take a year or two, but I have no doubt snow will be something that is a non-issue in the near future.
Sensing tech has to improve to get through the noise. As far as I'm aware, you can't see a yellow line or white line on a highway if it's covered in dirty snow.
We could also rework our roadways to include better sensing design and tech (passive or active!), but we are a ways out still from willingness to pay for that.
Do what humans do and drive without lines while trying to stay to one side of the road. This doesn’t seem like a major problem to self driving snow cars. More like, how do you deal with other drivers who are RWD with summer tires and are fish tailing all over the place.
If the sensors are up for it... Mountain roads covered in snow pack are a white blur, especially in certain light. Best bets for actually knowing where the road is might be previous tracks. I've dipped a wheel in a ditch more than once, not from carelessness, but snow drift obscuring the road... A road that I drive 500 times a year
I do think the one area that Alphabet is still genuinely innovating is Waymo. With Cruise sidelined, if they can manage to turn it into something that makes money (have ridden in SF, and the tech seems to work great), it could be up there with Youtube & Android, maybe even bigger.
Read this translation back in 8th grade (~2005?) and it blew my teenage mind. Have read a few more - perhaps it's sentimental, but none quite seem to do it for me like this version.
Thanks for sharing! I had this weird obsession with what I thought was an obscure skiffle group from Liverpool called the Quarymen. Never knew what happened to them and figured they'd petered out. Glad to see they seem to have had a decent second act!
Why is it always Cruise in these incidents? From afar, it seems that Waymo is generally safer & more methodical in their rollout while Cruise keeps announcing new cities before they've quite solved things. I get that they need to be bold if they're going to try to compete, but is it worth injuring people and creating negative press for the industry? ...Ultimately I'd love to see multiple players in this market, but I feel like Cruise has jumped the gun a bit here, and I am afraid there will be wider backlash.
Waymo had a huge head start, a ton of advantages, and more cash to burn. So they chose one operating point, under the theory that public perception and trust were vital to get right.
Later entrants chose a different operating point, because they had to catch up and had more limitations.
This is why Tesla rolled out autopilot before it was ready and killed a bunch of people; getting data collection running at scale was the only way for them to compete. Keep in mind that Musk promised a million robotaxis within a year of their roll out. That didn't happen.
but... I rode in a Waymo and a Cruise in the same week recently, and terrifying is exactly how I would describe the Cruise ride.
It often couldn't find it's lane and kept making abrupt swerves and corrections in the road. It would hesitate all the time, then seem to try to make it for it by gunning it forward when it made up its mind. Then five our so Cruises at an intersection near Market St couldn't figure out how to get through the light more than one car at a time, backing the whole street up. People were pissed. My friend who had the Cruise app thought it was normal and kind of fun :/
The Waymo ride, on the other had, was kind of boring. The worst part was it circled the block picking me up because it didn't see a good spot to stop right away (and I think I moved a bit from the pin). Other than that it was a very smooth ride, it showed me on a screen where all other cars and pedestrians it knew of were, it gave pedestrians enough room, it even handled a two-lane street where there were stopped cars blocking each way and it had to zig-zag across the double yellow, and yield to cars from the other direction doing the same.
I will not be riding in a Cruise again for a while, and I'm kind of scared to be on the street with them.
So both Cruise and Waymo are subsidiaries of giant corporations rather than VC funded and needing to push tempo before they collapse. I don't think GM is particularly less risk adverse than Google.
Maybe the depth of the respective corporate coffers and the power of the executives backing the respective subsidiaries? I'm pretty sure that Waymo is supported directly by the Google founders, and I don't even think there's an equivalent person at GM to guarantee Cruise's continuation if they don't show results.
I'm not going to comment on Cruise specifically, but keep in mind that AV companies have an insane burn rate in the order of 9 figures yearly or more, without any meaningful revenue at this point in time. They're under a lot of pressure to show some kind of growth, especially considering the current environment in which money isn't as easy to get anymore.
Yes, if I were Waymo I would be so pissed. It looks like protestors and regulators want to lump the two together. I'm pretty supportive of careful public testing of AV, but even I look at these recent Cruise incidents and find it very understandable that a city would want to kick out these AVs.
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