Comments URL: https://news.ycombinator.com/item?id=35870179

Points: 2

# Comments: 2

As an angel in that scenario, you’re investing with the risk profile of a very, very early company but the return profile of a later investor.

Alice v CLS: https://casetext.com/case/alice-corp-v-cls-bank-intl

Inventor Holdings v Bed Bath Beyond (multiple): https://casetext.com/search?q=Inventor%20holdings%20v.%20Bed...

First, we all have bills to pay. Don’t knock someone for their chosen profession.

Second, I was lucky enough to be invited to a small group event to hear him speak. Either all or the vast majority of his fee was sent directly to a charity. Never hit his bank account.

Good rule of thumb is to remember not to make assumptions about people you know nothing about.

Agree with other posters. The challenge is escaping tech. I have two kids and every parent at their school works for Google, LinkedIn, Facebook, Apple, HP, some startup unicorn, or some new startup. Me? Oh, uh yeah. I’m a founder of a 50-person startup.

There are many different types of PMs. Some companies want a more technical PM. Maybe a company selling a technical product to a technical audience would find your engineering experience extremely valuable.

My default career advice to everyone is to figure out where your experience is rare. If other PMs have 5-10 years of experience as a PM, you’re the rare gal or guy with years of actual coding and experience. That group will have a ton of depth to help on your PM gaps. But you’ll be the only one who can do what you do.

There is risk at companies of all sizes. Also, the idea of a single career in your lifetime isn’t a reality, so the “risk” of a losing a job is really the risk of losing it without notice. Compensation for that risk would be something like one month of pay, not illiquid certificates that might or might not become cash someday.

Employees can also change jobs voluntarily. But the idea that their employer should get a percent of their future earnings as compensation for that risk would be ridiculous.

I believe equity comp is because employees have two jobs: 1) execute on their day job, 2) build the systems, processes, culture, and institutional norms of the company. Basically, the equity component is added to the cash component because building a company takes long-term thinking and because it’s a ton of work.

I’m curious to know if others think about equity comp having a purpose other than to offset risk. Thanks!

We went just over two years in our venture-backed company before hiring anyone. Built the business to nearly $200k ARR. Everyone we told was amazed. But if 2 people can’t operate a business with only $200k top line, you don’t need a complex financial model to know that your economics aren’t where they need to be.

So, yes, you need to have revenues and cash before you can hire and pay salaries. 401k is only a little further out than that.