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Comment by closeparen | Hacker News Reader

At some point “chugging along” rounds down to “failure” for employees with equity compensation. Particularly at 10 years when it expires.

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Who would consider building a successful and stable business a failure? Surely not the people that helped build it.

Isn't early employee equity compensation more a case of "if the founders make a lot of money from this, I deserve a fraction of that too" rather than being an IOU in place of compensation?

The people who invested money in it expecting explosive growth at high valuations.

not if you traded early comp for the promise of astronomical equity returns. Especially if you were sold hard on this by the founders; in this scenario they have failed because the goal was not to build a stable, self-sustaining business.

Equity compensation is asking employees to invest their labor in the company. If you’re honest about your intention not to generate any return on their investment and they do it anyway, I guess that’s fine, but it seems more likely that people taking those offers are being misled.

Sustainable businesses can buy the labor they need with present cash flows and don’t need to sell people on the possibility of future ones.

And that's why every time someone ask how much salary reduction they must accept because they got a .1% equity, the best answer is $0. (And get the offer in written, just in case.)

I will avoid getting into too much detail. I am in the "old guard" at one of the S11 batch companies who are "chugging along". a few points:

- most people who were around early enough for their grant to begin expiring by now moved on, so the standard termination clause already kicked in.

- some of those who have left did exercise, and understood the risk they took by doing so.

- those who are still here and are approaching that expiration have plenty of leverage to renegotiate.

not all companies in YC are unicorns, and they don't have to be. we are positioned very well, despite taking some time to get there.

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