Ask HN: Should an experienced engineer join a startup?

1) You're critical to getting the company from PowerPoint pitch to shipping product, but you won't be treated this way.

2) You'll be diluted to almost nothing if the company got to a .5 Billion exit.

If you want the excitement and experience? Go for it. If you want the money? Buy a lottery ticket.

A startup is like a lottery when it comes to that kind of money. 99.99% chance you will not make that money with the startup. So if money is the main factor, you are better off staying with the current company. If you were making like 200K/Year, even then it is a tough call but at least was worth a discussion. 1M a year is not even worth a discussion.

I halved my salary and worked in startups for quite a few years, some things were fantastic. For example, bootstrapping a bank from scratch. I left all that chaos for an established large firm and it totally sucked the life out of me.

The chances of getting a million dollar a year income, in stock or salary in a new startup is next to nil. It is like being a muso and saying you want to be a rock star or actor.

I worked for 4 startups over 9 years. Three are gone completely and the one that may be successful has diluted my equity so much it is now near worthless. Basically I will never get the salary cut I took back, ever.

In my last search, the series D+ and public offers were good, and the startup offers were just laughable. I couldn't justify going to any of them just to make a bunch of other people rich.

My friends in similar situations take exactly the options you described. Some become founders (getting 30-40% of a company), some are angel investing (and sometimes joining a company they've invested in "for fun"), some just can't handle the bureaucracy beyond 100 people and join startups, and the vast majority are at larger public companies or startups that are nearly there.

I really believe there's an imbalance that's due for a correction, because skilled and experienced people mostly avoid startups right now. Early valuations may need to increase, employee equity pools will need to increase, equity terms must become less confiscatory, team sizes should shrink, and timelines to exiting must decrease. Will it happen? I'm not sure. It depends on whether startups can continue to coast on the pool of less-skilled engineers joining the true believers.

Wow, can I ask how you make that much per year?

I am not in that position but to me it sounds like you should not go with the startup. The chance of failure is very high

EDIT: One thing I thought you go do is invest in startups. That way you're into the startup world with less risk.

Like others have said this salary should make not want to leave.

I make around $1.5M at a startup. I think I can get around $350k at regular job. Even if you consider a generous 20% of startups that gonna to make it, I need to make more than $1.75M in income to justify the risk of a startup.

Doing the same math for your $1M salary, it means you need to make at least $5M per year to adjust for risk.

I do agree early engineers get pretty terrible deals w.r.t equity compared to founders or investors, but that's to be expected IMO. A startup does not have the structure in place to plug in an engineer and crank out tens of millions of extra revenue. They typically don't have extremely complex technical problems that need a highly specialized engineer. They need to solve simple problems quickly and a $1M engineer no matter how good is not going to outcompete a team of 5 $200k engineers.

This _can_ be calculated, and it doesn't seem like you are applying realistic probabilities. This is pretty routine in value investing when you are trying to value a company.

In essence, you multiply the probability of each possible valuation by the valuation, and then sum them up over the expected number of years.

Here's a quick calculator I threw together with possible scenarios what you can modify: https://docs.google.com/spreadsheets/d/e/2PACX-1vTox68rXDr1r...

At the end of the day, it's a risk reward tradeoff, this can help put things in the correct picture for what you're after. Startups have been said a number of times _do not_ give you the best odds for making money.

Investors, often because they start earlier in the company, are trading more risk for higher possible payoff.

Make sure that you don't delude yourself with probabilities, get actual base rates (how many startups fail in 5 years? How many go public?), and if you have insight to believe this is different, then you should modify that base rate.

But if you're happy where you are, and/or primarily motivated by money... what's even leading you to consider these offers, why even ask? If you're hoping to make even more money at a startup, the discussion here seems to say "unlikely, unless you get lucky".

I would never join a startup to get rich. Just doesn't work out most of the time.

Do the math.

https://tldroptions.io/

In just about every case, you're rolling dice for what? A faster paced environment and sleepless nights?

I get it, the hedonic treadmill is real. Happiness isn't bought with money, but couldn't you just save enough money to semi-retire and do something different at that point?

You have gotten to where you are by being highly-capable and applying yourself consistently. You have the personal skills and financial leverage to bring about many things in this world. What do you want to build? What needs nurturing the most? What, if any, legacy would I like to leave behind?

I believe we are in early days of a century of revolution. Pick your battle and fight it. The money will follow if your work continues to create value.

Besides that personal take, it seems like you may not have to make a breaking change. I always try to ask myself "why not both?". Given you're in the tech ecosystem, you probably have an information advantage on what startup investing opportunities exist and which may be viable. There is nothing stopping you from being a part-time angel investor and generating passive income. Certainly you have to source and work deals, but its generally a lot more passive to be a semi-silent partner than one who does it full-time, and as long as you go in with talented investors who want to take a more active role you can be somewhat assured your investment will be shepherded well. Should you find your investment(s) have traction and you feel you can add value with your specific skills, it may make sense to join the team. You can do so while being reasonably assured that you'll average $80K+ / month as a baseline, while also virtually guaranteeing things will be a bit more interesting day to day.

Best of luck to you.

So it depends on what you want.

Startups offer flexibility, opportunity to shape a company and its culture, building a team, incredibly fast growth (both personal and company), and the opportunity to touch many-if-not-all parts of the company.

The downsides are lower comp, longer hours (if you’re actually going to see returns), less support. For engineering, for example, big company employees drastically underestimate how much they rely on homegrown tooling.

Whether that’s worth it to you isn’t something I can answer. You will make less money. Probably a lot less. There are things you get that might be worth more than money, especially when you already have a lot. But also maybe they’re not to you and that’s okay!