<i>"For full time specifically, you get equity at a startup. If it IPOs, you make millions if you're one of the first 100-1000 employees."</i>
Not really. You can make millions if you're a founder... As a regular employee you have more chances to make millions by going to Vegas than with stock options.
Brother was (fresh out of college) employee 20 at a company that IPO'd > $1 billion, and he got about $150k out of his options from 3 years of work. You have to get lucky to find a company IPOing enough to make you a millionaire.
Are there any tech IPOs that made employee #1000 millions? IIRC Facebook only came close even if you ignore the "s", and Google "only" made hundreds of people millionaires.
Let's be real; most kids who graduate from a top CS program end up at Facebook, Amazon, Microsoft, etc. They will make great money ($100k+) and many will eventually leave to go to a startup.
The kids who are going to be successful doing startups with no work experience likely dropped out to join an accelerator before they graduated.
In my experience the first 1K employees at companies prior to going public have a much higher chance of becoming millionaires as a result of their equity holdings in the company. I'll see if I can find a better source.
For 1K employees each becoming millionaires, their holdings in the company would need to be worth at least $1B, and if the IPO is 50% of the company, that means the company must be worth at least $2B. That's not a whole lot of companies, and I'm being deliberately conservative in my numbers to give you the benefit of the doubt.
I can't easily quantify the coverage although I've been thinking about it. Of the several hundred people I felt I knew reasonably well at Intel and Sun through the folks I've interacted with at Xerox and Tandem where my wife worked. LinkedIn's mapping function gives me pretty good coverage but the simple sample of is/is-not retired isn't a good signal.
But the other part which isn't obvious is that a number of people at Sun (for example) were not millionaires when the company IPO'd but became millionaires as the stock increased in value. In a case which is perhaps unique but not unprecedented, the Sun stock I purchased as part of the employee purchase program (basically 10% of my salary buying stock at 85% of the fair market value every 6 months) over 10 years was worth more than a million dollars in 1999[1] Similarly for folks who "only" had $500K worth of stock when Facebook IPO'd that same stock would be > $1.5M today.
The dynamic (which was also well documented in Geoffrey Moore's books) is that companies that make it to an IPO and grow, add value over time and their relative value at a size of <= 1000 employees, to their size at 10,000 employees makes the equity compensation of those 1000 employees a lot more valuable than the later employees got.
And to reiterate the data is out there but not well collated. I'll have to do some more digging to figure out if we can quantify this more precisely.
[1] Not that I still had it in 1999 but there were folks who did.
Speaking as someone who just left a startup to join Google, I was excited in getting really stock options that after vesting could be exercised and sold.
It's a long road to go from options to real money. Something I didn't realized before joining a startup. There are many points at which you could be locked in if the company is sold or other events happen.
Not in itself, no. I'd be happy to have a PhD writing unit tests for me, but if they're overqualified for that (which I think is the assumption we're making) I'd probably rather have them working on a harder problem.
I think the point is that it's not an efficient use of their skills.
Which is why it wouldn't happen. Interns and entry level grads are doing testing; they hire PhDs specifically for doing the kind of research they were doing at university. But the original comment wasn't serious anyway, just making a point.
Yes, I would think so. AS some people say, and I agree with this, to enjoy a job it has to be fulfilling. If you are an amazing compsci guy that's stuck making highschool-grade java programs, it's going to be a bit soul-sucking I'd think. Sure, you're getting paid to do simple stuff, but if I was working at google I'd hope I would get to do cutting edge algorithms and the like.
Assuming the PhD was not in something related to software testing and is not entirely worthless, you're either overpaying for irrelevant skills or paying someone less than they could get elsewhere. Neither are a good thing.
This is a pretty bizarre single data point. However, if this sentiment is actually popular amoung "top CS students" these days I wonder what companies they consider to be tier one.
I can say from my interactions with CS students at top schools that this attitude is common. Google is no longer seen as innovative; everyone wants to work for Facebook or Apple now. Google isn't seen as a bad company to work for, just not sexy like it used to be. It's like going to work for Microsoft: you'll make good money and get some interesting projects, but major engineering decisions happen in an ivory tower and you just have to roll with the punches.
Yeah, these are 21-year-old kids. But Facebook is still in heavy growth mode, and their options packages for engineers are no joke. Facebook also has enough money and talent that they will build a few more blockbuster products before they're done. Apple is seen as desirable because their core product engineering teams are treated like royalty and they don't hire very many people, so it's seen as a badge of honor if you can get hired.
Some are, yes. We're talking about the top CS students at schools like Stanford, Berkeley, CMU and MIT - these kids are in the top 10% of the top 1% of students. They may not be making major decisions on day 1, but they expect to be able to grow into a role where they are at least a voice at the table within a year or two.
What I see in attitudes reflects what you've seen as well. (This is a longer way of saying "me too!" to your comment)
In 2005 I saw people lining up for Google T-shirts and feeling cool when they had invites they could hand out for new Google products. Wave and Gmail people immediately jumped me for invites and then when I was out my friends for invites. Inbox? Nobody cared.
The student mentions that Google's pay is "average" and the housing stipend is taxed more than wages, bringing the overall compensation down to on par with other employers in the valley. Fair enough.
He then says that other more prestigious startups are paying more and allow employees to be on the ground floor and have a bigger impact - I'm curious to see a list of these companies.
I also wonder if "fresh out of grad school" versus "worked at Google for 2 years + grad school" gets you into these startups. I still believe seeing Google on your resume gets you a second look.
TIL that even students from top CS program have no idea about taxes if they think that housing stipend is taxed higher than ordinary income.
He is not alone though - compensation director at Box tried to convince me that higher salary is significantly better than lower salary + bonus because of higher taxes on bonus.
There is some truth to this actually. Companies often charge both sides of payroll tax on bonuses, which adds another ~6%. IIRC some states have a bonus tax as well.
That said, higher base salary is usually better than lower salary + bonus because your annual raises are larger on a higher base. Variable comp also just kind of sucks period - you get a big windfall at some point in the year, but you can't plan for it because you don't know how big it will be.
6% is nothing compared to the raises or stocks or other random bonuses that come with working for a big tech company for a while and doing well. It seems really short-sighted to compare details about initial offers at such a minute level. Plus, Google offers other nice ways of evading taxes, like a good 401k plan.
I have never heard about companies charging both sides of payroll tax on bonuses - is it even legal? Anyway, Google does not do it and California does not have any extra tax for bonuses so it does not matter in this case.
With that, I agree that having higher guaranteed salary is better than having the same expected variable comp but the comment was about taxes.
If your base salary is enough to cover your expenses (and at Google it should be more than enough), it's not especially important to be able to plan around bonuses.
The writer of this article has a pretty faulty premise: it's all about the money. After close to a decade of working as an employee in startups, some that failed and some that succeeded, my view is that the last thing you want to do is join a startup for the money. You join (and more importantly, stay) because of the other benefits: the independence, the impact, and the camaraderie. Unless you're working on the next unicorn - and realistically, you're not - you're not going to come out with much cash. Google and Facebook are exceptions, not the rule.
I eventually left the startup space to see what the rest of the world is like, and I can tell you that the money is much better out here.
When I got out of school 4 years ago, people were already making the same arguments. While Google isn't perfect, I can't imagine a place I'd rather work, where I can really dig into technical details of things while having freedom to set my agenda in many ways, very smart coworkers and predictably high compensation. I don't think any of those things have changed in 4 years.
Talking about top CS schools/going to Stanford is really irrelevant. I went to Carleton College, which has a nice little CS department but not really well-known, and got a liberal arts education. Because I did some open-source work and maybe because of some academic projects, I was able to get lots of interviews and offers, all in the same range as people are discussing today. All Stanford does at a company like Google is get your foot in the door--small, poorly run startups may hire on that basis, but that's it.
My one piece of advice for people who want to get into the tech industry: Choose one open-source project and contribute to it over a long period of time (ideally starting in high school, but never too late). The short time span of college courses and lack of large projects (a semester is not long) means that you can't really develop the skills that you need to be effective by that alone. Large, open-source projects give you real experience in structuring code to be maintainable, working with others and receiving feedback, and understanding and changing existing code that other people wrote. It might also get you some nice internal references.
Lower prestige? I think this is true. People may not be consciously aware of it, but due to the company's core business model, i.e. basically adware and spyware, non-billionaire employees will almost certainly incur a hit to their social prestige account.
I would rate big companies i.e. Google, Facebook, Amazon, Microsoft and startups all at tier two places of work, when you take social and pressures of work into consideration. Good companies to work for are any that 1) do something you are interested in. 2) Don't require you to work longer than 40 hours a week.
The problem I see is big companies, and startups is the amount time they require their employees to work, which is normally over 40 hours and can be upwards of 60 hours average per week.
Paying 100k at 40 hours a week is $48 an hour.
Paying 100k at 60 hours a week is $32 an hour.
I work with undergrads always tell my best students to avoid Facebook, Amazon, Microsoft, Google companies. Longer hours means more stress. Big companies get employees to work longer by offering food and games at work. I tell them find a company that does cool stuff and only asks for 40 hours a week. I tell them I know working for interesting research companies getting paid $80k and working ~30 hours a week. Which is getting paid more per hour than the person working at a company earning 100k and doing 60 hours per week.
I checked up and Google isn't too bad from what I can see online. Some say 40[1] Others say 50-60 [2] Places like Facebook, Amazon, Microsoft are worse places to work.
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[ 4.3 ms ] story [ 110 ms ] threadNot really. You can make millions if you're a founder... As a regular employee you have more chances to make millions by going to Vegas than with stock options.
Brother was (fresh out of college) employee 20 at a company that IPO'd > $1 billion, and he got about $150k out of his options from 3 years of work. You have to get lucky to find a company IPOing enough to make you a millionaire.
I mean, the whole argument about "bigger money" at startups is more like a myth.
http://www.businessinsider.com/twitter-ipo-created-1600-mill...
The kids who are going to be successful doing startups with no work experience likely dropped out to join an accelerator before they graduated.
For 1K employees each becoming millionaires, their holdings in the company would need to be worth at least $1B, and if the IPO is 50% of the company, that means the company must be worth at least $2B. That's not a whole lot of companies, and I'm being deliberately conservative in my numbers to give you the benefit of the doubt.
I can't easily quantify the coverage although I've been thinking about it. Of the several hundred people I felt I knew reasonably well at Intel and Sun through the folks I've interacted with at Xerox and Tandem where my wife worked. LinkedIn's mapping function gives me pretty good coverage but the simple sample of is/is-not retired isn't a good signal.
But the other part which isn't obvious is that a number of people at Sun (for example) were not millionaires when the company IPO'd but became millionaires as the stock increased in value. In a case which is perhaps unique but not unprecedented, the Sun stock I purchased as part of the employee purchase program (basically 10% of my salary buying stock at 85% of the fair market value every 6 months) over 10 years was worth more than a million dollars in 1999[1] Similarly for folks who "only" had $500K worth of stock when Facebook IPO'd that same stock would be > $1.5M today.
The dynamic (which was also well documented in Geoffrey Moore's books) is that companies that make it to an IPO and grow, add value over time and their relative value at a size of <= 1000 employees, to their size at 10,000 employees makes the equity compensation of those 1000 employees a lot more valuable than the later employees got.
And to reiterate the data is out there but not well collated. I'll have to do some more digging to figure out if we can quantify this more precisely.
[1] Not that I still had it in 1999 but there were folks who did.
It's a long road to go from options to real money. Something I didn't realized before joining a startup. There are many points at which you could be locked in if the company is sold or other events happen.
I think the point is that it's not an efficient use of their skills.
I guess I'm assuming that said PhD isn't doing nothing but unit tests all data, but rather writing unit tests for their code.
Good unit tests are hard, often harder than product code. Smarts and experience help.
A very few recent grads may be able to make major contributions. How do you know if you're one of them?
And the unit is... ?
In 2005 I saw people lining up for Google T-shirts and feeling cool when they had invites they could hand out for new Google products. Wave and Gmail people immediately jumped me for invites and then when I was out my friends for invites. Inbox? Nobody cared.
He then says that other more prestigious startups are paying more and allow employees to be on the ground floor and have a bigger impact - I'm curious to see a list of these companies.
I also wonder if "fresh out of grad school" versus "worked at Google for 2 years + grad school" gets you into these startups. I still believe seeing Google on your resume gets you a second look.
He is not alone though - compensation director at Box tried to convince me that higher salary is significantly better than lower salary + bonus because of higher taxes on bonus.
That said, higher base salary is usually better than lower salary + bonus because your annual raises are larger on a higher base. Variable comp also just kind of sucks period - you get a big windfall at some point in the year, but you can't plan for it because you don't know how big it will be.
With that, I agree that having higher guaranteed salary is better than having the same expected variable comp but the comment was about taxes.
I eventually left the startup space to see what the rest of the world is like, and I can tell you that the money is much better out here.
Talking about top CS schools/going to Stanford is really irrelevant. I went to Carleton College, which has a nice little CS department but not really well-known, and got a liberal arts education. Because I did some open-source work and maybe because of some academic projects, I was able to get lots of interviews and offers, all in the same range as people are discussing today. All Stanford does at a company like Google is get your foot in the door--small, poorly run startups may hire on that basis, but that's it.
My one piece of advice for people who want to get into the tech industry: Choose one open-source project and contribute to it over a long period of time (ideally starting in high school, but never too late). The short time span of college courses and lack of large projects (a semester is not long) means that you can't really develop the skills that you need to be effective by that alone. Large, open-source projects give you real experience in structuring code to be maintainable, working with others and receiving feedback, and understanding and changing existing code that other people wrote. It might also get you some nice internal references.
The problem I see is big companies, and startups is the amount time they require their employees to work, which is normally over 40 hours and can be upwards of 60 hours average per week.
Paying 100k at 40 hours a week is $48 an hour.
Paying 100k at 60 hours a week is $32 an hour.
I work with undergrads always tell my best students to avoid Facebook, Amazon, Microsoft, Google companies. Longer hours means more stress. Big companies get employees to work longer by offering food and games at work. I tell them find a company that does cool stuff and only asks for 40 hours a week. I tell them I know working for interesting research companies getting paid $80k and working ~30 hours a week. Which is getting paid more per hour than the person working at a company earning 100k and doing 60 hours per week.
I checked up and Google isn't too bad from what I can see online. Some say 40[1] Others say 50-60 [2] Places like Facebook, Amazon, Microsoft are worse places to work.
[1] http://mashable.com/2012/05/10/reddit-users-google/
[2] http://www.quora.com/How-many-hours-a-day-do-Google-employee...