I joined in Google in early 2005, post IPO, as an entry level SWE. I was probably employee #3000 - #9000 (there were about 3000 employees at the time).
I made over $2M from stock options. Lots of people sold their stock as soon as it vested, in which case it would've amounted to about $1M. If I had held out until now (the price spiked around 2013), it would have been closer to $4M.
I think people don't understand the order of magnitude difference between great companies and astounding companies.
A great company is worth $300 M. Google is worth $300 B.
That means if you would have gotten two THOUSAND dollars from the successful company, you would get two MILLION dollars from Google [1]. 3 orders of magnitude is a big difference!
If your goal is to get rich, it's perhaps a better strategy to join the right company at the right time, rather than start your own company (although that was definitely not my strategy).
Though this advice sounds obvious, I haven't heard it in many places. I recall a startup class lecture [1] from a founder of Asana, on why NOT to do a startup. And he said don't do it for the money -- because if you want to do it for the money, you should join a company like AirBNB or Dropbox now. These are companies that could be at a similar cycle in their growth as Google was in 2005.
In other words, join a great company that could be astounding.
Another source is Piaw Na's book. I don't really know him, and at first I thought it was weird to have a career strategy of choosing companies based on equity, but it's definitely a logical thing to do if you're so inclined:
$2M doesn't sound like that much any more, but when I see these HN threads about exits and equity, I believe I made out better than many startup founders, as a regular employee.
[1] caveat: I believe Google was still idealistic and generous in 2005; the Valley has changed a lot in the last decade, so YMMV
It also depends on what you mean by "getting rich." If you want to make say $500k-$5M, I think that by far your best bet is to join a company that is shortly pre-IPO or shortly post-IPO that is CLEARLY valuable. Where your equity will be worth something, barring disaster.
If you want to make $10M+, then joining an already-valuable company isn't going to do it unless you can become an executive. Founding a company might do it. If you want to make $100M+, then founding a company is probably the only way you can reasonably do it (unless you're competitive for a very small number of very high end executive slots).
What is interesting to me is that I find it kind of hard to imagine many results in which it's truly worthwhile, monetarily, to be an early employee at a start-up. You are much less likely to get wildly mega-rich, like a founder -- probably at least 10x less likely -- and you're much less likely to get a medium-rich than someone who joins already-successful companies.
I say this as someone who has been an early employee at several start-ups. And really enjoyed it. But it's hard to make a financial case for it.
Maybe the answer is just that being an early employee is financially non-optimal, but some people for a variety of reasons can't or don't want to be founders, and some people for a variety of reasons can't or don't want to get a job at an already-successful company.
Agreed. View your prospective employer as if you were an investor. Think like Buffett. If your timing is right, a profitable, proven and sustainable business model is worth far more for most than a lottery ticket. Grow rich slowly.
Joined a post-IPO company, saw peers waste options on cars 10K cars that would be $800K homes today, sat tight, did good work, collected equity, which, if spread over my whole career, equates before tax to about 3-4x my average annual salary per annum over a very long, multi-decade career.
It was risky, no doubt. Had I not executed, my cumulative equity might have ended up 1-1.5x salary over a long career. But the downside was incredibly low given the risk taken.
One caveat: since companies IPO so late now, to luck into it like I did, you will likely have to find pre-IPO companies (but post having a non-insane biz model) to achieve similar results.
I made over $2M from stock options. Lots of people sold their stock as soon as it vested, in which case it would've amounted to about $1M. If I had held out until now (the price spiked around 2013), it would have been closer to $4M.
I think people don't understand the order of magnitude difference between great companies and astounding companies.
A great company is worth $300 M. Google is worth $300 B.
That means if you would have gotten two THOUSAND dollars from the successful company, you would get two MILLION dollars from Google [1]. 3 orders of magnitude is a big difference!
If your goal is to get rich, it's perhaps a better strategy to join the right company at the right time, rather than start your own company (although that was definitely not my strategy).
Though this advice sounds obvious, I haven't heard it in many places. I recall a startup class lecture [1] from a founder of Asana, on why NOT to do a startup. And he said don't do it for the money -- because if you want to do it for the money, you should join a company like AirBNB or Dropbox now. These are companies that could be at a similar cycle in their growth as Google was in 2005.
In other words, join a great company that could be astounding.
Another source is Piaw Na's book. I don't really know him, and at first I thought it was weird to have a career strategy of choosing companies based on equity, but it's definitely a logical thing to do if you're so inclined:
http://www.amazon.com/Engineers-Guide-Silicon-Valley-Startup...
$2M doesn't sound like that much any more, but when I see these HN threads about exits and equity, I believe I made out better than many startup founders, as a regular employee.
[1] caveat: I believe Google was still idealistic and generous in 2005; the Valley has changed a lot in the last decade, so YMMV
[2] I can't find it here, but I thought it was? http://startupclass.samaltman.com/