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Comment by Iftheshoefits | Hacker News Reader

The last time I looked at them, the salaries and equity shares advertised on many of their job listings were mostly chuckle-worthy at best. Some were appallingly lowball. If they're truly "disrupting" the hiring industry, it certainly isn't to the benefit of the labor pool.

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AL doesn't really have any control on that. But they could suggest best practices.

One reason we got so many applicants is maybe because our compensation feels fair.

Certainly AL doesn't control what companies offer. I can't comment on "so many applicants". It is entirely subjective and without context (e.g. for quality of applicant, on any scale you choose). All I can say about it is this: when I narrow the region to my region and the compensation range so that my current compensation is the low end of the bar, the pickings are very, very thin (and I'm pretty sure I'm being paid less than similarly experienced and capable engineers can command, for a variety of reasons). I have a hard time picturing anybody but a desperate or naive person taking most of the listings seriously.

If you are saying that density of jobs posted varies by region I totally agree - that sounds reasonable. I don't want to defend other companies postings but that's a somewhat weak generalization to make, esp for Silicon Valley.

No, I'm saying that when I add a compensation bracket with the low end matching (slightly below, actually) my current compensation, the number of listings in my region/role specification falls substantially. This has nothing to do with the absolute density of jobs in the region. And, by the way, the salaries attached to over 90% of the listings I see (by region/role only--no filter for compensation or anything else) are a joke especially in Silicon Valley, even for startups (which typically offer low salary to begin with), although the equities are, sadly, not terribly out of line.

Maybe the salaries are actually that high. It's really difficult to hire engineers in the valley. And there are tons and tons of funded startups looking for them.

Unless you're a startup with celebrity status, you might just have to pay up.

When they aren't lowball, they are fake high-ball in order to get more buzz from investors and more applicants coming in from AngelList. When the offer is handed over for real, they low-ball. Of course not all startups do this.

Yeah. Case by case.

I experienced this first hand. After interviewing with a company I met on Angelist they said their best offer was 80% of the bottom of their advertised range. It was a tremendous waste of time for everyone involved, and I'm not sure who thought that was a good idea. Even if I'd accepted, they would have landed a candidate who felt misled/disgruntled on Day 1. Not a great way to build a company, in my opinion.

That's a really bad hiring strategy. What the company doesn't realize is that they are still paying 80%. If the company flipped their position and added an extra 10% to the 100%, it's conceivable that the motivation could actually make the employee 30% more productive and engaged with making the company successful.

Great companies are not built this way. And sorry to hear you went through this - though you are probably better off not working there.

FWIW this doesn't hold true for the data scientist salaries I'm seeing in NYC. True "data scientist" roles (not data analyst) seem to line up with market rates.

How are you valuing equity shares? Presumably you're looking at absolute percentages, but remember equity is impossible to value without putting a valuation on the company itself. 0.5% of a company with great product, great team, great opportunity, great go-to-market is definitely worth more than 5% of a company without those things.

If you're saying that AngelList doesn't have those kind of companies, then ok, that's logically consistent. But don't make the mistake of eyeballing ranges based on absolute equity percentages alone.

As a general thought, you should only value cases of equity when the company is $100MM + up in exit mode or your have more than fractional percentages. I think that's what the earlier poster was trying to communicate.

Almost more important: in the 9 of 10 chance that the company fails, what is being done to maximize the marketability of the staff? YC adds a lot of brand value to "failed" projects. Just one example of how the whole picture needs to be taken into account. If you lose $15K a year taking a haircut, but your next job search sees $30K in extra value from your past experience, how does that add up?

If that were true then angel investment would never make sense. In practice, you can value equity at any stage of a company. What matters is the company and its potential, not just the percentage.

Not sure I follow you. Angel investing may or may not make sense (for the average punter). But for those who do it sucessfully, it seems rare to take <fractional> percentages. Maybe you can give some worked examples using math? I've updated my comment to be more clear below:

As a general thought, you should only value [as part of your employment] cases of equity when [either, (a)] the company is [potentialy worth] $100MM + up in exit mode; or [b] your have more than <fractional> percentages [ie, granted stakes >1%].

In other words, unless you expect the stake to be worth a substantial six-figure sum. In order for this to be true, the equity stake needs to be in the upper six figure under some reasonable probability. So, a 600k stake with a 1/3 chance of you "winning" it is only worth $200K. Once you spread this out over the time to get it, it boils down to a number closer to say 50k/year for 4 years.

Now, that is a nice bump in salary. But in order to get this in a realistic sense with a 0.6% stake, you need a 1 in 3 chance of exiting out of a $100 million dollar company.

Since a 1/3 chance of a 100 million exit is unrealistic for an average portfolio company, you need to correct the math a bit more. Since a 1/10 chance is a more likly number, lets divide our $50k/ye by 3, and we get something in the $15 to $20K range per year.

In other words, we get a number which is about a 10-12% boost on a $150K base salary. This is nice, but not worth taking larger paycut/mispricing for. So using this back of the envelope framework, small fraction percentages of ownership don't as a rule compensate for salary mispricing, when that mis-pricing is order of magnitude 10% or greater. Which just brings us back to the initial point but hopefully with more clarity.

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