Comment by throwearlyeng | Hacker News Reader

Comment by throwearlyeng | Hacker News Reader

Parent Full thread

I wish YC with all of its power and influence could try to change things for the better here. Early employees' blood, sweat, and tears, not to mention burning the midnight oil, often go into actualizing the founders' vision. Often these key early hires are alongside the founders working equally hard since day 10 or even day 1.

I remember Sam Altman posting lamenting that the most talented engineers are more interested in working for FAANG than startups. If anybody could insist on their portfolio companies' founders writing founding team friendly employment contracts, it's him.

While I'm against wealth taxes on principle, I can certainly understand the motivation for having them. I'm sure founders with fresh $100+M paychecks from acquirers can spare a few $M for those that believed in their vision enough to sacrifice the often-large opportunity cost of working for Google.

One of the reasons Woz is a personal hero of mine (alongside his engineering brilliance) is that he made sure his colleagues who toiled in their garage were treated fairly. When Jobs and Apple's investors didn't spare any would-be lucrative Apple stock for said employees, Woz made sure to "give away" some of his own to them. I'd argue Woz was still compensated quite lavishly after the "damage".

In fact, any YC startup that is currently having trouble hiring engineers might want to look into this. I would be interested in working for one that gave me more than 1% of the pie (alongside the usual "VP of Engineering" title that they always bestow to their first employee, which actually doesn't mean anything at all) as a founding eng.

EDIT: Also kudos to Cruise, which is a YC company, for actually stepping in and offering to make the founding employees whole.

There are so many VCs now, and all of them are looking for an edge. There is an obvious edge in building a term-sheet that creates a full ratchet for the employee stock option plan at 10%, where each employee earns points toward the total based on days worked, and 10-year exercise windows.

Then that VC needs to lead rounds and talk constantly about how the employees and companies they fund have the best chance of an equitable exit for all. How if you are not at one of their companies, you will almost definitely be screwed through dilution and bad founder actions.

YC took VC from shareholder focus to founder focus. The next YC will balance employee and founder interests in a way that delivers outsized outcomes the way that YC delivered outsized outcomes for shareholders by understanding that the founders were more important than getting an extra 1% or some other BS term in the deal.

I'm just not sure how someone who is not already able to command lead investor-ship through their reputation and added value would be able to sell such a "short deal" to founders. YC can. Maybe they could demonstrate much more effective recruiting.

If you picture a cap table having 3 components

1) Investor's Share 2) Founder's Share 3) Employee's Share

Founders try to optimize for their own share, but investors basically destroy the employee share to get founders to agree. I don't believe most founders are sophisticated enough to model employee interests until it is too late.

My belief is that a new structure could be sold to founders by being a thought leader. In a world with tons of money and no edge, I believe its worth it for someone to try.

But... I'm not a VC, and personally believe its the most difficult gig in investing (which investing is the most difficult gig in any job long-term). So, take anything I say with a massive grain of salt.

> I wish YC with all of its power and influence could try to change things for the better here.

YC is a multi-billion dollar Venture Capital firm.

Not sure why reading any of PG’s writing - especially his tweets - would give the impression that he’s anything other than firmly parked on the side of capital in the class war.

Great marketing, branding, and PR. HN commenters so often claim to be fully immune to advertising but they fell for this one hook, line, and sinker.

Reply on news.ycombinator.com