Those are the companies that were actually accepted to Y-Combinator. The Y-Combintor acceptance rate is said to be 3%. So, your odds of success are now more like 3% 7% = 0.2%*
All of this hinges on the assumption:
Y-combinator is a proxy for the start-up population.
Even taking the optimistic Y-Combinator outcome, would you be willing to accept a 7% chance of making $400K?
This is assuming you only get paid in that 1% equity while assuming the 40MM exit. If I got paid a SALARY I can accept + 1%, why wouldn't I take that chance? It is +EV. Compare this to the lottery, which carries a -EV.
I like the general tone of this piece, but how many salaries are below market rate at a startup these days? The fringe benefits are pretty insane right now too.
IMO, the biggest concern for an employee is dilution. Sometimes this happens in non-obvious ways, like on exit what happens to undistributed shares allocated to the employee grant pool?
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[ 3.1 ms ] story [ 23.3 ms ] threadAll of this hinges on the assumption:
Y-combinator is a proxy for the start-up population.
Even taking the optimistic Y-Combinator outcome, would you be willing to accept a 7% chance of making $400K?
This is assuming you only get paid in that 1% equity while assuming the 40MM exit. If I got paid a SALARY I can accept + 1%, why wouldn't I take that chance? It is +EV. Compare this to the lottery, which carries a -EV.
Yes, but hey if someone's got the evidence to support it, it wouldn't hurt anyone to see it.
IMO, the biggest concern for an employee is dilution. Sometimes this happens in non-obvious ways, like on exit what happens to undistributed shares allocated to the employee grant pool?