There are reasons he's right about what he did and there are reasons I'm right about being upset about it but it definitely cost us our friendship.

I think back that if he had operated with integrity and honored his agreement to keep me on for two extra months it would have not been upsetting to leave then. As it was it left me scrambling with three small kids.

The lesson to me is that even if the startup is flush with cash, there will be issues. How the founder manages those issues matters.

I recall when I had my startup I did a bunch of business coaching and really had to take on a lot of uncomfortable things about myself. I'm grateful for that. I invited him many times to participate in that work and he never did. When the money is good you think you don't need it.

On the other side you are a friend, I really don't know what he could have done differently, very hard.

you did not mention whether this early termination was communicated beforehand.

nevertheless this person probably never was your friend. sry

No, it's completely common for friendships to break down over business.

Very few friendships are robust enough to survive one party costing the other $20,000.

I have other friendships that have been tested for similar amounts that have survived. But, it leaves a mark.

I had an ex-employee who worked for me under starvation wages in a startup long ago. He was upset about that and some tax implications, and brought it up with me. I gave him a smallish lump sum and enabled him to put a down payment on a house. I need to ask him about that, it was really brave to ask me to clean something up, and I never did that with the friend from the OP. I wonder if it would have gone differently.

I'm seeing a lot of people in my circle struggling right now. I bet 2024 is going to be a bad year for friendships.

Is it possible to buy a real friendship for $20k? Is a friendship of many years worth more to you than $20k - would you stop being friends if someone else offered you that much to do so?

This isn't a paltry sum of money, it is a paltry sum to end a friendship over.

That probably depends on how critical that $20k is to you. If it's your only $20k, then yeah it'd be much more impactful than if it's just one of many.

But even when the loss causes little financial hardship, it could put a strain on a relationship.

Imagine you invest $20k in my business and I buy a $5k industrial juicing machine for the office so my staff can have freshly squeezed orange juice. I tell you that employees expect free luxury food these days and it'll make hiring much easier. You have your doubts.

If the business does well and we both make a big profit - we're both happy. You still think the juicer was a bit extravagant - but it all worked out in the end, and maybe I was right that it helped with recruitment.

But if the business fails - you might resent the fact I wasted $5k of your money on a juicer.

hence no money can be enough to compensate for a friendship

It all depends on what is a friend. Your statement makes me question what makes a good friend. I don't really know right now. It is a lot harder to make them at 50, of that I'm sure.

The issue with friendships is usually there's some expectation of being in it 'together' and to put in some sort of similar effort, despite the major power imbalance of employee vs. cofounder.

If the founder feels their friend is for instance, giving say half the effort they are (which I feel personally is reasonable for an early stage employee, that they have a life), they may feel their friend is violating some notion of trust, despite the friend getting maybe 1% equity at best.

"If two friends ask you to judge a dispute, don't accept, because you will lose one friend; on the other hand, if two strangers come with the same request, accept, because you will gain one friend."

It sort of applies, here, as well.

It wasn’t anything serious enough to involve HR (in my eyes anyway), but I spent a solid while annoyed with this response. It took me a solid five years to realize he had made the right overall decision.

He had not played favorites, did not burn any bridges, and caused at worst a mild annoyance to both of us rather than potentially leading one of us to quit.

I have extremely close friends, with whom I have deep, fundamental, disagreements.

I have absolutely no problem, telling people that they are dreaming, if they think they can extort me into taking their side.

"Support" can mean that I won't participate in destructive behavior. I often can't stop others from doing it, but I can make sure I don't get dragged into the cesspool, and be ready with towels and a power washer, when they get out.

If the person you disagrees with becomes your friend then that’s a good sign!

An engineer I worked with for several years (and became friends with outside of work) started his own company, a couple of years later he recruited me to join as his business was taking off. He’d also brought in a business guy who seemed to put in lots of processes including a mandatory take-home coding assignment as part of their interview process.

So anyhow, this guy who I’d worked alongside for years, who’d seen plenty of my code and wanted me to join his company, was going to make me do this homework to get an offer.

So I did a verrry basic solution to this thing and sent it back. A bit later I got an email from someone in their office that they regretted they didn’t have any positions that fit my experience.

Later my friend (and his wife) encouraged me to do the homework thing again but I laughed them off. I didn’t want to work for a small company that somehow had hamstrung itself with unnecessary processes that kept the founder from hiring someone he wanted to hire.

A few years later they sold and a couple engineers I know made multiple millions. So yeah, I dunno, I felt good about my decision at the time, but in retrospect it would have been better to act like any job seeker and just go to work for my friend.

Your mileage will certainly vary.

Had your friend delegated the engineering hiring decisions/process to someone else, and was trying not to step on their toes?

Or friend had instituted the process, and didn't think it would go well with the other people, if you looked like a nepotism hire who bypassed the process?

Or friend was trying to put you in your employee place (where you had to meet his process), or otherwise was getting a bit full of himself, or a bit sleep-deprived and nutty?

This would be a strange take. CEO shouldn't be letting people in on the nod. If hiring is someone else's job, CEO shouldn't be overriding. At best suggesting candidates but saying that it's totally the hiring manager's call.

If a candidate didn't pass a hiring process because they didn't put effort in as they felt they should get the job due to connections, I would agree with the company's decision.

To the company it was never, and as high a recommendation as the CEO would be; most people would agree they did the right thing. Unless you're hired before a hiring manager or whomever is doing the hiring you should follow the process. If you treat it like a joke because you feel entitled by your connections then be willing to accept the outcome.

That person should be fired, for being unprofessional and for inability to adapt to a trivial non-standard situation ("normally we test the applicant's technical competency with a take-home test; now it already has been established; so I need to stop wasting everybody's time and spend my time doing something actually useful".)

Obviously, HR could still be useful in establishing a culture fit, but even then it's pretty much a formality since the CEO worked with and recommended the guy.

None of the other stuff you're saying is relevant. No point doing armchair psychoanalysis.

Clearly, the process (of cutting technically incompetent people while letting through the technically competent ones) is not working properly; that alone is fireable incompetency ("You had only one job and you failed at it!").

Another fireable thing is that HR does not understand that they are under the CEO, they are implementing the CEO's vision, in the way he envisioned. But instead of that, HR is indeed ego-tripping.

I think it's kinda intuitive that this could happen. Startups tend to require early people to figure out and apply a ton of diverse skills. You can guess many founders will think "I'm hiring my friend, and I don't know how the power dynamic will work out". And some percentage of those will then think, "...so I should establish from the start that they're the employee, to avoid problems later." And from there you get the dance-for-our-approval tests that so many techbros have cargo-culted.

OTOH, it may be that the company already have one or some super programmer, that he/she carry the company to success. Having OP, if we assume is another super programmer, may halt the company rather than improve it.

Am an EE and I cannot stand the CS people at work. Oh you wrapped well known math in machine syntax sugar, none of which you invented, or defined? High 5, edgelord.

While I know what you're saying that the founder is vouching for your experience, its still going to cause friction, I think. Especially, again, to all the people that fought for the job.

i agree with you that once the company is large enough that the founder is no longer involved with hiring decisions then they should not just go over the hiring team.

more specifically, as in this article: https://www.cio.com/article/236189/5-reasons-ceos-should-be-...

i am talking about smaller companies that don't yet have senior management and HR teams

You also could have just smiled and nodded and actually done a good job to demonstrate your skills. It looks to me like you pulled your punches.

On the other hand, I have made good friends through the workplace who I would start a startup with in a heartbeat.

"A CEO's high compensation is justified by the skills, experience, and dedication they bring to the role."

I doubt this is only an issue at startups. I've noticed that the higher up the rungs of the corporate ladder you climb, the easier it is to get away with doing nothing all day.

Same. Absolutely not in question.

IMO, it should be illegal to launch a limited liability company/corporation and only allow specific people to buy shares. I object to the idea of incorporation and limiting directors' liability to begin with but since it is allowed, at the very least, it should be a requirement under the law that the shares be on the open market such that anyone who wants them can buy them and resell them at any time.

The current system is a scam. They can select exactly who gets to ride the ship to the promised land. That's completely wrong, discriminatory and evil.

I don't understand how this could possibly work.

If I start a company on my own and I provide all the equity then I own all the "shares". What would it mean for those shares to "be on the open market"? If I'm not selling them then no one can buy them.

And if it was a trivial low-regulation thing to create shares and sell them to the public, it would undermine the entire body of regulations they put in place to prevent scams and ensure transparancy.

>The current system is a scam. They can select exactly who gets to ride the ship to the promised land. That's completely wrong, discriminatory and evil.

No, "they" can not select who gets to ride the ship to the promised land. They can only make an offer that others are free to accept or reject.

If I think that my labour makes a huge difference to the success of a company, then I'm not going to provide that labour unless I get a huge chunk of the company. It's a negotiation. I can just walk away and start my own company.

And by the way, if you got your wish and limited liability was abolished, then all shareholders would be on the hook for any and all debts the company cannot pay (jointly and severally). That would include employees paid in shares. It contradicts your desire for broad share ownership.

Agree also breaking corporate liability shield gets insane quickly. You're going to have pension funds go broke for owning stock in the wrong company and employees on the hook for start-up debts when start-ups fail.

Is GP sure they are imagineering solutions, and not much larger problems?

So if I was looking for someone who would build a company with me, someone who would take on an entrepreneurial role, provide expertise, labour or personal connections, I wouldn't be allowed to do that. I wouldn't be allowed to give shares to employees in exchange for labour either. Nor would there be any family businesses.

>Nobody's Labour ever makes a difference. The success of any project is all about capital, political leverage and media exposure. Let's be honest here.

Capital is a factor that leverages and buys labour. Without labour the result of this equation is always zero. Without a product or service you have no customers, regardless of how much free media coverage you may be getting (for whatever reason).

>My strategy would be to only invest in small or medium-sized companies whose founders I can trust and who can manage their risk.

Good luck with that. Personal trust is not a replacement for limited liability though, especially not if shares are publicly traded.

How would a creditor decide how much to lend to a company if the personal assets of all shareholders are used as collateral?

If I owned shares in Microsoft, would I have to provide a payslip and a bank statement to Microsoft's bank? Would they do a credit check? And if I sold my shares, would Microsoft have to pay back part of a bank loan if the buyer's net worth was less than mine?

I don't think you have thought this through.

No, the company would still do its own accounting with its own income, balance, cashflow ledgers... Banks would have to look at the company's net assets to loan against. If the company goes bankrupt, however, and the bank cannot recover the collateral from the company itself, then it should be allowed to pursue the shareholders (who would be liable in proportion to how many shares they hold).

Another major difference would be that if the company was negligent or committed a crime, then all shareholders could potentially be held personally liable to some extent. IMO, purely passive investing should not be allowed. The shareholder should be responsible for staying up to date about what their company is doing.

>So if I was looking for someone who would build a company with me, someone who would take on an entrepreneurial role, provide expertise, labour or personal connections, I wouldn't be allowed to do that. I wouldn't be allowed to give shares to employees in exchange for labour either. Nor would there be any family businesses.

A good market is an open market. If you look for someone with "certain expertise", you can offer that for money, while at the same time putting shares of your company on the market. The person could then buy the shares for money, and you can give him that money for his "expertise". But if someone else outbids that person on the shares, he will still get the money, but someone else gets the shares. If the person ONLY wants to work for those shares, and not for money, he will have to outbid the market price. If he doesn't want to outbid the market price, and you agree with that, you actually want to give him shares for free.

If my investors are going to bug me over returns eventually, I prefer to have control on who they are rather than leaving it to strangers in the open market that may be misaligned. That's one extra reason many companies don't go public nowadays.

I still think that this idea is wholly unpragmatic. It would prevent all strategic partnerships where the value provided is only partially financial.

What, to you, is the difference between these two situations?

1. One person decides to form a company and has all the shares. After six months, he realizes he should really have worked with a cofounder, so he closes that business and opens a brand new one with this cofounder, the two of them now equally owning half the shares.

2. One person decides to form a company and has all the shares. After six months, he realizes he should really have worked with a cofounder, so he hires a very high level early employee and gives him half the shares.

How does this change based on the number of co-founders/early hires? Why does it make a difference if their need for a new person surprises them, so they start all over with the distribution of the equity of a new "business," or they plan for it in advance and set equity aside for such hires?

If you get six months into "working" on a project and realize you're missing some core skill, "hire" someone. Call them "cofounder." Give them an appropriate amount of the shares.

It's exactly the same in the end as closing one business and starting a new one that's divvied up the same way.

I'm arguing that being able to give important employees a stake in the company is just good sense, and having to "sell them on the open market" instead is about as inane an idea as I've heard this year.

What a strange claim. Protecting people from scams is literally what the Federal Trade Commission is for, among other agencies. Bankman-Fried was arrested due to breaking existing laws that define what some scams are ahead of time.

> Nobody’s Labour ever makes a difference.

I can see why some people with little to no experience in business or starting companies can get this impression and form pessimistic opinions based on negative stuff you hear in the news or social media. Fortunately, it’s only true of the worst offenders, and not generally true. People’s efforts do make the difference to the success of startups all the time. Having money for sure helps, and primarily affects whether people can afford to try, and for how long, but it’s not as good at ensuring success, effort and timing and luck play larger roles there.

> The bigger the company, the higher the risk.

Why do you believe this? I’d guess fund managers and most investors would outright disagree. The safest single company stocks are the largest companies. A bigger company may have more to lose, but they’re bigger in the first place only because they survived the small and medium phases. The probability of a company failing is much higher when small, and most startups fail before ever getting to small company size, and most of those fail before getting to the medium or large company size.

Most businesspeople think the same.

No, I deeply disagree with this. This is the reason we have issues like the 737 Max. Earnings reports and a bunch of idiot shareholders who don't understand a flying hoot about aircraft owning bits and pieces of an aerospace company and exerting control over it and pressure to "beat earnings".

I'm very much on board with being generous in giving ownership to employees. But open market? No. F that. Avoid it as long as possible and pay your employees dividends instead.

And also the equity that they give is based on some valuation that's not even real, it's hard to hold that value of.

You should create your own startup without your friend then.

There were also disagreements with the CEO, he was a PhD my friend had recruited, and he didn't have any experience with anything but his PhD, which led to my friend and me having to spend tons of time trying to show him how his proposed solutions to problems wouldn't work.

In the end, my friend laid me off 364 days after I was hired, one day before my cliff vested, which is very illegal under Canadian law. I got an attorney and sued them, but the attorney slowly kept ramping the cost up and up, until she told me the entire lawsuit would probably cost around $100k. I doubt their company is worth that much, so I dropped the suit, and have resorted to voodoo instead, which is much cheaper.

It's definitely not all negative, but it's like any relationship. If you don't check for compatibility from the start, and ensure that all parties are mature and willing to put in the work to make it successful, you're probably going to be disappointed.

If it doesn't work when almost nothing is at stake, it won't work when there's more at stake.

It appears that individuals often invest far more diligence and scrutiny in choosing cars, electronics, partners, and properties than they do in selecting a co-founder.

As you'd expect, founder divorces can get messy.

I think it is best for founders to discuss it before they start the company. Hash out the exit plan, have those hard conversations, write it all down and agree to it. Sign it, then put it away, start building the companu, and hope you never have to use it.

But if you do; if people's situations or desires change, then you've got the path forward for an exit. You don't have to make one up on the fly after the company is worth something and emotions are high.

Source: been a founder, been a team member who watched some founder divorces from a distance

Have a plan to fail, before you plan to start.

I advised that my friend become CEO instead and that the then-CEO become more of an operations person (COO? Titles in a three-person startup are weird), which was a role the CEO wanted more anyway, but I think the advisors didn't want to go for that.

It will also probably be hard for your friend to deliver tough feedback to you, so you may have to work extra hard to solicit real feedback.

For example, when you moved from being a peer to a position lower in the hierarchy, did this alter the nature of your friendship? And similarly, what changes occurred when the roles were reversed?

After a stint in another startup, have joined another friend at his startup. It is hard but there is much better transparency. Only time will tell though if the friendship will survive the stint (I hope it does).

I consider people worth calling friends to be similar to family. I also don't have close family connections at that level. Guess that means I put more importance on friendship.

I've had the experience one time of cofounding a company with a friend. It didn't end badly, but it wasn't ideal. I realized pretty quickly I was going to be solely responsible for actually building the product. My partner was a great designer and actually had the business knowledge. To be completely honest we could have made something of it but I wasn't in the right place at the time to deep dive. Probably should have carried through with it. We'd likely be the biggest site to basically do Airbnb for cinema rental locations today. Again, I only say that because he had the connections to make that happen. Not something I could have done on my own

I guess I don't have any specific advice, other than general history.

If you and your friend are highly aligned then make a go of it. But on the contrary, Steve, Steve, and the other cofounders didn't agree. One backed out, and Apple became what it is now. Woz and the rest are $$$$$$$$$$$ aires.

In the end we all die. How do you want to think about your life in 10-20-40 years? Did you build anything? Are you ok with not having a big impact? Depends on you.

I've also learned the hard way never to hire friends, even for short-term projects like fixing a plumbing problem when the friend works professionally as a handyman. There's always a difference between the expectation of a person hiring someone to do a job, and the person doing the job, and none of it is worth ruining a friendship over.

It might be couched as a loan, but I will never ask for it back... Whether they pay me back or not makes for an interesting measure of the friendship.

I also repeated my mistake (sort of) by investing in a friend's small business. When the business wasn't successful and we didn't see eye to eye on the path forward that totally killed our friendship.

In mu experience, people don't want equity as much as they want a living wage. They want a proper salary, every month, not some mythical payday in the future.

If you can find a place that does both, thats fantastic.

Incidentally if you have meaningful equity that comes with a bunch of stress as well. Our responsibility is to make payroll every month. In good years we get some profit (so do employees) in bad months we get paid last, sometimes short, sometimes late.

I've voted you up, not because I agree with your point, but because you help readers to understand that different people have different goals. And the trading of stability for equity is not necessarily exploitation.

I'd add the caveat that equity is worth more than it isn't so limited in usage for those it is distributed too.

1 year cliff, 4 year vest, but company likely to just retrench you? Worthless. Developers don't stay that long on average, and the sale terms are basically handcuffs waiting for an exit event. Constant promises of revshare when profitability is reached? Worthless.

Cash is king because equity is not only a lottery, but a lottery that you can't even control when you play or get rewarded for it.

"Anyone giving you a wage while seeking a profit instead of partner equity is taking advantage of you tautologically"

assume all startups have huge exit and don't account that equity can actually go down to $0 - that $100 I get today wired to my account does not go to $0 suddenly.

Then you might be stuck with equity because there might be no one who will buy it off - or company board won't approve of sale, so you might be sitting on loads of "theorethical cash" that you won't be able to materialize.

Still $100 wired to my account - if I can spend it - is not getting voted by company co-owners and if things go south, believe me, you will have a hard time to bail and getting any money back from the equity.

Just like lottery ticket, people don't see the downsides only that there is $8 000 000 to win and they hear in the news every 2 weeks someone wins. Where no one is making news stories about people who spend $100 every week for years and never won.

Worker cooperative structure sounds like a different thing that I usually read about which is people accepting lower compensation for some equity, which is usually bait and switch to get young talents work for less but for "some future unknown riches".

Getting equity has to be done with enough due diligence and by people who understand the downsides. People who can do due diligence and understand the downsides will most likely rather get their money in the bank unless it is really good deal to get equity.

People also don't want to be screwed over by their friends. A little equity costs the startup's founders very little, while making sure their friends see some benefit from a successful exit is worth a lot to those friends.

If I hire a friend, then the transaction is simple - do the work, get a salary. Whether the business does well, or badly, is irrelevant. How much I do, or don't, take home is irrelevant. There's no "fairness" in play here, it's a simple business transaction.

If you can't live with that then don't take the job. Join as a founder, or go start your own company.

Feeling "screwed" happens when you feel entitled to the upside, but don't take the downside along the way. When the business folds, and the owner loses his house, are you chipping in? Are you signing paper to cover liabilities?

I'll be honest, most friends cannot separate friendship from business. So yes, it usually ends badly. Usually because the employee I expecting things not in their contract.

Hard disagree here. A startup only works if you get really motivated people to sacrifice a good portion of their lifetime to work for you. Most startups can't provide competitive wages with "big corp". If the startup folds these people lose their jobs, too. If it succeeds they should see a good part of the upside, too.

Working for a startup is a risky investment of your time. And should be rewarded accordingly. A startup that doesn't give you a living wage and at least a bit of equity is trying to screw you over.

>> A startup only works if you get really motivated people to sacrifice a good portion of their lifetime to work for you.

Either pay them for their work, or take them on as founders with founder level equity. Then you all float or sink together.

Employees who sell their time at low rates with the "hope" that they'll get rewarded on the day of sale (but without an agreement) are, well, bad at business. Hope is not a good strategy.

I completely agree that employees who pour in their time for little salary, and no formal equity, then they are fools.

Incidentally, if you think anything below Fang level salary is "low" then your thinking is too binary. Salaries are a continuum. There's no long long way between making a good living and Fang.

They may be bad at business, but we were talking about joining a friend's startup here. If they're indeed your friend they wouldn't try screwing you over like this. And if you're joining a random startup, then of course be aware that most are trying to screw you over.

My point was rather that startup level salaries without equity _are_ being screwed over. Nobody expects the founders to give the same amount of equity to all employees. Of course the founder has an outsize risk here. But the employees do face a lot of risks with startups as well, so they should get some level of equity to match that. Otherwise they don't get any reward for that risk. Which is again, being screwed over. And also they usually have to invest more time in the startup than a normal corporate job, so that should be reflected in the equity they get, since most startups don't have the funds to reflect it in high salaries.

>Incidentally, if you think anything below Fang level salary is "low" then your thinking is too binary. Salaries are a continuum. There's no long long way between making a good living and Fang.

No, I was thinking about normal big corporate salaries. I don't live in the US though, so maybe that influences this. They usually offer more work-life balance, low risk, and a better salary than most startups.

Whenever this topic comes up I always feel like I'm in some weird Silicon Valley Twilight Zone where "friendship" is some sort of code for "people I have access to exploit when necessary"...

Of course, friend or not, all you have to be, to not be exploitive is to agree on a salary, and pay it.

The economy is cyclical. Tech runs on speculation and (used to) on lax tax rules. Likewise, hiring is based on asinine processes, asinine vogues of fashion, and asinine practices. At any moment in time you could be made persona non-grata in tech.

If you joined tech for the passion of if, and you’re not independently wealthy, I think that is a foolish thing — no different than doing a physics PhD while inhabiting the middle or lower classes.

The most logical and rational path is to make as much money as quickly as possible, and enter the capital class. After that, do whatever you want. Anything else is just sticking your head in the ground.

I don’t understand what you are saying. I have this condition called “living”. If i am exposed to the elements for prolonged time I get cold, then sick, then I stop living. Likewise i need to eat regularly otherwise i will also stop living. In the current system we live in one meets these things by paying for them. They don’t accept IOUs, or not for long anyway.

These are non-negotiable minimums I need to fulfill. Even if someone offered me a deal where they pay me a huge sum after years of hard work, and this would be a certainty but nothing before, i could not accept it because i would have no means to sustain myself for the duration.

This is what bruce511 describes when they write “They want a proper salary, every month, not some mythical payday in the future.”

If a place offers me both a huge payday in the future and enough money in the meantime to stay alive I may accept that depending on the amounts in question and the probabilities as i see them.

This is what bruce511 talks about with “ If you can find a place that does both, thats fantastic.”

> most logical and rational path is to make as much money as quickly as possible, and enter the capital class.

Sounds good! I will surely do that once i can. Until then I will need that paycheck thank you very much. And call me a fool.

Although, I'd say this view, much as I share it, makes it harder to find companies to work for. Especially in a tougher job market like right now.

I'll do conversational technical interviews all day. Leet code and 6 interviews unrelated to the job, hell no.

It's cynical, but once you've been through the meat grinder with layoffs, obsessive VC overgrowth and unfulfilled promises, I don't see another way so get to where I want to be financially without either letting go and becoming a hermit or as you say "enter the capital class".

Naturally if you revolve only in that space it may seem like it. And I can certainly see that culture leading to your viewpoint.

Fortunately, my experience has not been like yours.

But lots and lots of tech workers go to work, get paid and repeat till they retire. So I don't think your thesis is universally true.

such PhDs are funded last I checked.

How major shareholders can change the deal by dilution, how can they just spin up separate entities to compete with what you have even though it might seem they are on the same boat while in reality they are not.

One would say "you can always go to court" - can you? If guy that gives you equity was already in the game he already has lawyers and most likely more capital in his pockets. If your equity will be worth $200k and he drags court case so you have to pay for your lawyers $300k in fees is it worth? Especially if you are an engineer that has mortgage instead of loads of cash in bank or other investments. Can you stretch $100k over to win the case and then even if you win and he has to pay you back all the costs with interests, you believe someone will just wire up it in one day instead of dragging it out for another 10 years where you as small time guy cannot sleep at night because all of the crap.

Regardless it is possible and common to be taken advantage of even with your basic survival needs covered for you

Lots of people don't want to admit that their business model or ideas are bad, they lack the skills to be a good leader, they have too much on their plate otherwise, or that they are just generally too immature to handle serious responsibility.

That said, I had a decent experience at a startup while I was wrapping up my bachelor's degree. It wasn't always perfect, but no harm was done when some other people and I eventually left. The business was sold off years later. We helped build each other's careers and are all doing great now and still keep in touch.

Things are what you make them. We didn't exactly strike it rich, but didn't expect to either. Having the right expectations is key. I would do it again with the same or similar people and if the details made sense.

In the end there was a big restructure post investment round and a lot of people who had been there for a long time felt it was right to move on (or were heavily suggested to move on, or pushed out). I left a few months after that on very good terms to keep the good memories good, and joined another friend at another startup which I really enjoyed.

My mentality during that time was: Do your best work, learn as much as you can and be agreeable - you might be friends, but there is still hierarchy in the business which you should respect. Outside of work, you be you. It worked well for me. YMMV.

I think being very clear with yourself, your partner (if applicable), and your friend-employer, while being able to engage in potentially tough conversations in a friendly manner will go a long way to managing expectations on all sides.

I will most likely never work for a friend's startup longterm, i might be willing to jump in for a weekend(as a sort of chatgpt or rubber duck that gives advice) as a way to earn some extra pocket cash in a off the paper kind of deal. Or a really short period to bridge a time between jobs or gigs. But fulltime long term on contract no thanks.

It was nice to have the co-founder in the mix because that was more of a pure business relationship. I remember the co-founder making a comment about how I'd need to perform and that felt okay. If my friend had said it, it would have stung a bit.

I was nervous, and it was a big commitment for them, so we stepped into it slowly. I contracted for them for a few months before joining full time. That helped alleviate worries on both sides, I think, because I saw how they operated and they saw the work I did.

It worked out well, in the end. They got some great work out of me, I got paid well and had a lot of trust and autonomy.

Not that you’d ever know of course.

I don't know about that. Sure, they might not have been totally happy with it, but if they're still friends with them, clearly they didn't hold any grudged. I think it's reasonable to give someone the benefit of the doubt that they aren't just being oblivious to the fact that they've been ghosted or something unless you have evidence to the contrary.

Similarly, individuals can judge success by their one sided satisfaction with the result. e.g. "I am still very happy with the relationship" = success.

I must admit, the idea of joining a startup so young was very attractive and all I could think about was the dollar signs that would appear when I finally sold my equity.

After six months of work I never even got a contract, never saw a dime for any of my work. I stayed for so long due to naivety. Eventually I realized it wasn't going anywhere, and that was more due to design decisions and lack of response to feedback of concerns I had.

We talk occasionally still. I harbour no ill-will to him and I think he feels the same way, although we were never particularly close to begin with.

The start-up pivoted focus a few times to different apps and ideas but ultimately shut down. I am not sure what they do these days.

As a dad I don't think I'd ever take the chance on a startup again. I need to be certain that I can pay for food for my kids. But when they leave home I might be willing to join another startup. Especially now that I have a less then ideal experience under my belt to know what to look out for.

Truth be told, I hadn't fully recovered from my burnout from my previous role, and the new role wasn't particularly thrilling. But that wasn't the only factor. I'm best in product-oriented companies, but there's a tendency where I am for product companies to be thinly-veiled development agencies for larger B2B corporate clients. That type of work I find soul draining, because I refuse to be at the whims of bad corporates with big wallets.

I had also wanted to put more effort to improving the developer experience of the project as it was poor, but could never quite slot in enough time or motivation, and felt it went unappreciated.

Eventually the higher ups pulled me in to effectively put me on a PIP. I showed some improvement for the next sprint, but they felt it was better to just part ways.

Got my first true holiday in years after that, then went off to start freelancing.

My friend is still at that company and he's doing great. I think we've just diverged in our work styles and preferences of company. No bad blood between us, but of course there's disappointment at both sides.

So, what does a prospective employee do? You treat your employer like you'd treat any other employer. This is best for both of you. It is better that their feelings get hurt due to you, for example, negotiating a better employment agreement elsewhere than, you getting hurt because the company makes money but they take advantage of your friendship to not give you a raise or promotion. Do not let your friendship be the reason you do more work for them than you would for any other employer. This will ruin your friendship and your desire to work.

In my case, the commercial values and industry culture eventually eclipsed the social friendship and made it untenable, but that process took about a decade to eventuate.

The imbalance was a big part of it. Not directly! The friend treated me well, but the other employees not so much. The resulting long term issues drove a wedge, and my friend had no choice but to side with his life's career.

I took the money, bought a custom engagement ring, and planned a surprise proposal & engagement photoshoot in Rome. She's asleep in the other room with my 8mo son, and I'm about to go to bed with my 5yo son.

He ended up being worth $1.3B. Shout out to @apoorvamehta. We both did phenomenal.

I've done this a few times and overall it went better than working with a stranger-founder.

ALTHOUGH - You should understand that, independent from the various forms of risk the business faces, and also independent from the financial risk and uncertainty you face through your agreements with the startup:

1. The social fabric of startups are highly unstable for the first few years.

2. The beliefs the participants have about the world, the other people in the organization, what to do, and so on is also highly unstable.

Your relationship is a minor player relative to the other(sometimes chaotic) forces affecting the organization, however generally it works in your favor.

Also, the normal rules for navigating a startup are still apply. Of those, the most important is selecting the right startup to join.

- a coworker and close friend was moving into management. Went poorly. We both left within six months. We had worked incredibly well together as peers.

- I joined a startup where, unbeknownst to me, the engineer who became CTO and an early hire were best friends since college. The early hire became an engineering director. He was awful. His reports knew it. We had to humor him and stop him from making bad decisions when we could. Eventually he stopped being involved in engineering, and stuck to strategy discussions with his buddy the CTO.

That company recently made headlines for hosting image generating models fine-tuned to generate CP. The founders knew about it for months beforehand. It was their only paying customer after $100MM venture capital, so they kept with it until the news came out.

I interviewed with the Engineering Director and a manager. Then I had a couple of rounds with ICs. Everything seemed great. I got an offer and accepted it.

When I started, though, one of the people who, during interviews was presented to me as an IC, was now my manager. They had an associate title. I tried to work through it. It was fucking horrible. It was hard but I walked from that job without anything lined up.

By the end of my employment there, I had learned that the entire C-suite was all friends through previous employment. That Director and the original manager were best friends from high school. The associate manager was also a friend of theirs from high school. The Ops/Infra director was also a friend of theirs from high school. And on and on it went.

OP, if you see this... Tread very carefully.

assuming you're not referring to the stanford internet observatory - laion thing, could you be more specific or even link a writeup of the story?

If you set boundaries and accept that you will see a different version of your friend as soon as the pressure of vcs and boards employees and management and pride and direct communication and so on take hold then you’ll be ok.

This is especially true for first time founders who do not realize how unprepared they really were for the realities of being a founder. Having been a founder myself before I joined I maybe had greater empathy for the way they became completely different people under those pressures and the dynamics of your friendships can change in different settings.

My advice is to expect and make space for that, and leave on good terms when you start to see that their emergent coping mechanisms with those pressures start to affect your friendship with them and the way you see them.

Treat the friendship as paramount, don’t do it if you don’t have financial security to prevent money or layoffs from feeling personal, don’t make yourself a bus factor, let them have a learning experience and be ok with them not taking your advice.

Your boss cannot be your friend (or vice versa). It simply does not work out well, you can't be a leader while being friends with your followers, so I expect everyone who worked for their friends will most likely describe it as a miserable experience.

A decade passed and same guy is a direct report again. So far, it’s going well again.

I’ve been fortunate to never face a round of budget cuts while a close friend was reporting to me. That would be difficult to navigate, regardless of the outcome.

This ultimately comes down to the characteristics you seek in friends, friendships, and work.

6 months later we gave him another chance after he quit the drugs. But around two years after that, he had car troubles so we gave him a loan of £5K to help buy a car, he would pay towards it regularly and managed to pay around £1K before leaving and never contacting us again. 20 year friendship over and he essentially scammed us for £4K. That was 2021.

Don’t employ friends.

IMO this is all about expectations. If you never lied to your friend about your actual experience and skillset and your friend offers reasonable compensation then it's win win situation. Working on a team of like-minded people is amazing.

I lost a few friendships due to bad blood between us. While we had even previously worked together on the project for years, we hadn't yet incorporated it formally. But once we did, we were already being tested. We had conflicts on most of the big picture issues of the startup, and later on, I found out that he was trying to get me to lose my equity by getting me expelled from the company (we were working in a sensitive space and anything that looked bad meant being disbarred from working in the industry). Forging certain documents, badmouthing and backstabbing me. I could prove some of it to save my skin, but not everything, so he still managed to stay on. In the end, we managed an exit, but we were just lucky now coming to think of it.

On the other hand, I started up my current investment firm with a guy I had vibed well with after an interview. He is more than family to me. Granted, there are so many years of maturity between then and now.

Second time, 8 years in and still going strong. Joined at series A. Solid growth trajectory. I own some shares that might really be worth something, one of these days.

Was definitely straining, as he never handled the actual business side of running a hedge fund and only cared about raising money/trading. The biggest screaming match was when I had to explain to him that even if we did 30% a year for the first 2 years straight we would not see institutional(insurance, retirement scheme, etc) investors until Y4-Y5 simply because of the difference in requirements from wealthy individuals.

Joining my "friend's" startup, I hoped to use my experience and connections to guide and support the team. My friend, twenty years my junior and someone I'd previously mentored, was leading the venture. He and his business partner left University, and had the dream of forming a silicon valley company. They spent several years grinding away at this dream, and fair play to them, managed to raise millions on the back of a very weak idea. They were now ready to build a team and start developing the product. They had never been an employee as such (unless you count working in McDonalds), and had no idea how to run a company. I was excited to help them, and to see if I could help them avoid the mistakes I'd made in my career. These lads were much maligned and laughed at - they were seen as a joke by many, and I didn't like that. I wanted them to win.

Despite witnessing some concerning behavior early on.... - He gatecrashed a christmas party I attended and made a scene by dry humping me from behind, and loudly proclaiming to everyone that I was 'his bitch' - I chose to join out of loyalty and optimism.

The job quickly turned sour. As CTO, his performance was far from what I expected. He was not only ill-equipped for the technical demands of the role but also struggled with the emotional and ethical aspects of leadership. His approach to technology was chaotic and misguided, often leading us down problematic paths. There was a particularly serious incident which I won't go into, but he refused to acknowledge how serious it was.

The work environment became increasingly difficult. His emotional outbursts, lack of accountability, and poor decision-making created a toxic atmosphere. When my colleagues and I attempted to intervene or suggest strategic changes, we were met with resistance and eventually dismissed for not being a good 'fit'.

Even though the company eventually pivotted towards our advice, the damage was done. The leadership remained a disaster. Their dev turnover is high. If people aren't fired they quit.

This whole mess taught me one thing: while I’d still consider working with a friend, it has to be someone I deeply respect and trust. Someone competent, with integrity, not a power-drunk disaster like this. Never again will I make the mistake of mixing business with misplaced loyalty.

I lived on campus, where a guy I was really close with got a 50k seed investment through an accelerator to start a company. He hired me, who knew nothing but needed no convincing to drop out of school and give it a shot. It died, so I hopped to another accelerator startup (also died), and then to a bank as a Software Engineer. 6 years later I'm a PM at a reputable company.

I feel like - while probably terrible financial decisions - the deadly combination of accelerators and friends with questionable startup ideas has probably been one of the biggest propagators of people into tech.

I was uninformed on how stock grants worked and trusted their advice. They said "I'll take care of you."

They made millions from the venture. I was able to buy a motorcycle.

Any chance you could elaborate on this? What about stock grants were you unaware of (or misunderstood) until it was too late? What should people reading this watch out for?

Philosophically, even if not written in the contract, someone could convince you to dilute at the last minute. The best interest of a buyer is to put the target in close bankruptcy before buying it. Anything is possible in peer-to-peer negotiations, and legal framework can only go so far.

they gave a fraction of a fraction of a percent, from a particular share class that likely was subordinate to other liquidity preferences.

like, even if you were personally more informed the outcome wouldn't be different? you would have rooted for an even bigger upside for the whole company.

I’ve even recruited other mutual friends to join and it’s been great.

The truth is, not all your friends will have great ideas, as much as you love and care for them. And the other truth is that when everything is going well, it’s easy to have good working relation ships. It’s when people are struggling for their next checks do things become strained - doubly so when they’re your friend.

Choose your ventures carefully, whether they’re your friend or not.

At the end of the day, the founder gives way to a board they need to answer to.

I think it's best not to mix the two because a shitty business decision will eventually need to be made at your expense and it will most likely ruin the friendship.

Someone you discover you can do this with, you can of course handle easy low stress times with.

A friend-first person on the other hand is usually someone you make non-economical choices with, for the sake of pure enjoyment. It doesn't translate well to the rigor of making money, and they may very well have different, incompatible ideas about how to do that.

Don't go into business with friends or family, certainly not on unequal terms.

OTOH, I later joined an existing start-up as a simple employee, to contribute to their great plan. It was a great plan, but couldn't be sold, so that ended, but I did end up befriending my most direct colleague of that period.

Overall it was a very positive experience and I think it strengthened the friendship. I felt like I was able to be way more honest throughout my tenure about what I wanted and how I thought things were going.

I’ll also say I did it carefully. I waited until the Series A was raised and joined as the ~50th employee so I was able to get compensation I was happy with and I didn’t come in needing to carry the company.

I will say that I would not have done this with a closer friend. Not worth the risk to the friendship.

I’m usually able to do everything so I don’t need to make nominal roles, or their actual help, sometimes they are faces on a site or running a support channel just to add a human element and look like traction

[1] I usually don’t dilute any ownership of the company, I dole out shares of a revenue stream, or the product which can be convertible to cash. very clean, very lucrative. not on me if that revenue stream dries up or they dont sell the product, they were cut in.

I now never speak to him or my sister anymore. Only fights and blocked social media accounts and have given up ever seeing my sister again.

So at least for family: Don't do it. It's not that big of a problem to never see a specific friend again but they have driven me out of my mom's side of the family, I can never see my sister again.

Not worth it.

NGL it took time to get used to it. Being an ex-founder, it was doubly difficult as not only did I have less agency than I was used to (and frankly expected), I was also no longer on an equal footing to my friend. This led to some friction and disagreements of how things should be done, but at the end of the day, it came down to perspective differences as a founder and as an employee, and I learned to make with peace with the fact it was his company, and not mine.

In retrospect, I think the fact that we were friends first, and had spoken a lot as fellow founders beforehand, made it harder to align expectations in this dynamic. Thankfully, we parted on good terms, and I'm still helping them out as a consultant, which feels like a nice middle ground for me.

That said, I'm not looking to jump back into something like this anytime soon.

If I do however, I would definitely go into any future engagement with more tempered expectations of what I'm there to for, and what I want out of it.

As obvious as it sounds, a lot of things can be taken for granted due to the prior relationship (on both sides), and its important to lay out as much of your thoughts and expectations upfront, so that there is as little ambiguity and misunderstandings down the line. No detail is too trivial, especially around compensation, and its important to recognize and remember that you're there to do a job, not just helping out a friend, which is how the conversation usually starts.

This whole thing has taught me a lot about handling that balance, and a lot more about myself as well.

1. They are more of a business/school friend. You share knowledge and passion. You compliment each other's strengths and cover each other's weaknesses. There is little risk to forming a mutual business partnership, since loosing such a friend is part of the game.

2. You were meant for each other, perhaps you are even married. This venture will make you even more entangled, increasing risk but also reward to your relationship.

Be VERY sure if you choose #2. Strongly consider whether your relationship can handle the added risk of loosing the business and consider when it's time to walk away from the business (despite the financial consequences) in order to save your "marriage". In my marriage we've made bad financial decisions (wrong house purchase) where walking away cost us 100k but I think definitely saved the marriage. Loosing that money was worth every penny.

For #1 it's more of a straightforward business decision.

I had to lay them off (along with myself shortly afterward) in less than a year because our founder let me hire them when we didn't have enough money.

They landed on their feet but it still hurt.

I did a few other things wrong before that. I had a lot to learn. Things I've regretted and learned from.

I'd definitely do it again with most of them (and they would too). There are some things you have to work out, such as having a clear, physical distinction between work and friends. We'd make sure to never talk about friend stuff on the work slack for example, and unintentionally didn't really discuss work outside of it.

I'm also completely fine having difficult conversations and so doing those with friends made no difference to me and it had no impact on our friendship. The only issues ever came from friends who were very obviously not pulling their weight for a very long time (we all have hiccups). Even after alerting them to it, there was no change in behaviour. I do not think I would work with them again but it did not impact the friendship.

Until I started working with him and his true colors came out. I ended up doing all the work. He would occasionally come into town, shit all over everything and leave. He was an embarrassment in almost everything I tried to involve him in. We both are sarcastic people and he couldn’t separate the personal relationship from the professional.

I got to see another side of him I never knew as friends. All of his claimed tech skills were either completely fabricated or grossly exaggerated — turns out he was only good at having others do the work for him, while extracting the best possible deal for himself.

When I exhausted all of my personal savings, as well as spent substantial amounts on the startup myself, he negotiated with me to draw a salary from his investment like he was playing a game of poker. I was asking for $60k living in the Bay Area and it was like I was asking for the world. Meanwhile he would openly flaunt his wealth, buying $30k watches and taking every opportunity to brag about becoming “an investor”. He would regularly have me demo to add credibility to himself and for his own ego to his friends and personal connections related to his other business that left me asking “why did I just meet that person?”

All of the employees I recruited eventually became disgruntled and disillusioned, and were eventually fired by him (which he seemed to take great pleasure in).

The final straw was when we were accepted into an accelerator, based off all my work and connections. He agreed to do the in-person part of the accelerator with me, and he did show up for the first week. He spent it bragging about how much money he was making in his “other company” —- he even had one of his cars shipped out so he could drive it around, flaunting everywhere he went. Meanwhile our employees were constantly late being paid, and we were at risk of eviction from our office. Since I was the “technical one” (we are both software engineers) and his other company was fintech, we both agreed he should be responsible for the money but I don’t think he ever paid a bill on time and I would constantly have to remind him.

As soon as the money from the accelerator hit the bank account, he stopped paying for everything and left town with all the money, leaving the car he had shipped out sitting in the parking lot for months. I went to our investors and was advised to resign to shield myself from legal consequences. He accepted my resignation, the company failed, and we haven’t spoken since.

I'm still happily working as an IC despite all the attempts to get me to accept a management roll, and we still have a great friendship and a lot of trust (though we live in different countries now and don't see each other very often). Being an unquestionably-trusted IC with a direct line to the CEO and all the other upper management is pretty sweet, and though the salary is maybe 2-3x lower than I could get at some other places I wouldn't trade what I have here away for that.

I'd recommend doing some high-stakes conflict-generating activity with the person as a test-run beforehand, e.g. run a local event together, travel together, do the same things you'd do as an early couple to suss out where the pain points will be.

You do that as equals. Working for someone means, you are no longer equals and money is involved in that hierachy. Very different situation and in most cases I would strongly advise against it.

I think travel requires enough conflict resolution that it will expose at least some of the dynamics that might show up in a work environment.

After about a year I started getting increasingly inappropriate texts from him, and it seemed like he was trying to cheat on his wife. Needless to say, I left, and now that friendship is over.

There was a good amount of conflict between us during the early stages of the company, so it's important that your relationship is sturdy if you are going to put yourself in that sort of situation. Now things are running pretty smoothly, so we actually don't talk as much about the company in off hours.

We've interviewed and hired a number of friends as well, mostly with good outcomes. We had to fire one friend, unfortunately, and another relationship soured as a result of how the interview process went. But several others are still with the company, and a couple have come and gone onto other things.

One thing to note, though, is that for the friends we've hired, they often morph into more professional relationships. Now that the company is settling down a bit, we're trying to rekindle some of the friendship piece.

Given the answer to that is yes, the job may or may not work out well, that risk remains the same. The decision to leave that startup again should not be based on friendship but on personal situations and aspirations.

I personally feel its better to be working with friends than with strangers. The hierarchy equation is simply a matter of circumstances.

There's a significant difference between joining pre funding/product/revenue as an "employee" vs when it is a more established business or part of a larger team.

We didn’t end up being enemies, and I don’t feel betrayed or something, but not sure if there’s anything left to talk about either, cause almost all his talks are full of that reality-distortion overconfidence. Cannot unsee and got enough. Okay about him, but pretty negative about all these years that I could spend on something better to me.

We still separate work and personal life and it works out for me.

Lots of people who don’t want to mix money and friendship in this thread — while I understand where you are coming from it never was a problem for me. With loans I just loan as much money as I would also be willing to give as a gift. I guess everyone handles friendship differently though.

Working with friends you can be totally honest and comfortable with can be amazing.

More context would help. Your age? Startup stage? You have kids? Etc

In the end I left with them owning me money I never got back. It was a lot for a young person.

All that said, it wasn't because we were friends, it was because they were dishonest so your mileage might vary.

It comes down to the dynamics - if one is asked to join in, it's because one has demonstrated capabilities and the ability to execute in a team environment.

I think it's largely a question of the maturity of the people involved.

We were funded by an existing company - an insurance agency. I think the thing lasted maybe 8 weeks? Primary founder of the startup had issues with the owner of the insurance agency over intellectual property. I was told by my friend all of this was coming in advance. I was given the chance to stay working for the main agency after all the founders quit. I quit with them.

But it was a ridiculously early foot in the door for doing web stuff, which I've done ever since. Before that I was doing medical devices. Definitely don't regret it.

People said it might go badly; they said the same about living with a different colleague, and that also went perfectly for me.

But also, that relationship had to go, because in that context, I was always 'less than.' I wasn't the boss, so in every situation I was just someone who 'worked for' him, and was treated accordingly, by customers and staff alike. When strategy was discussed at the big boys' table, I was quietly seated with the other children.

My new venture is mine alone, I'm not 'less than' anyone else, I've taken my place at the head of the table, and it's perfectly clear that I'd been underestimating my potential for a very long time. It's been wildly successful, doing interesting work with high-profile customers. A++ would split again.

Now I have a need for a profile that would likely match the one for my best friend when we were 15 or so, but I don't want to risk that as well.

Fast forwarding 2 years, the numbers started going down and he started looking for alternative ways to increase our income and came up with crazy projects that we failed to deliver. Ideas like building a video generation engine for product marketing. We only had two junior devs at that time...

At the end, he tried screwing me over legally. Fortunately, I had a good lawyer and left the company at the right time with my pockets full.

I also have a list of friends who I would tell to just put their money in an index fund.

I can’t think of any friends who would be good founders, but I wouldn’t work under because they’re friends.

Relationship was fine during the startup and after the startup failed but we did another business together and he did some d*ck moves there. Mainly out of being young and inexperienced.

We're still friends but I don't think I'd do business with again.

I did some other ventures with friends and they turned out fine but nothing life changing.

I'd do it again and I'm open to do business with friends. If your friends are honest people you should be able to do a civil business with them. If they can't, I'd rather not have them as friends.

A significant positive: You have a lot of information about your friend's integrity and values.

A maybe-negative: You will probably feel somewhat less comfortable grabbing a beer and talking about whatever is on your mind, at least for the first few years.