How To NOT Get Screwed As A Software Engineer

The stories are true: technical founders (and early technical employees!) often end up with the short end of the stick when starting a company.
In this episode of Dalton & Michael, we’ll discuss the questions and best practices that an aspiring technical founder should think about - whom to start a company with, and how to think about things like equity split and division of responsibilities. Know what you are worth and act accordingly!
Apply to Y Combinator: yc.link/DandM-apply
Work at a Startup: yc.link/DandM-jobs
Chapters (Powered by bit.ly/chapterme-yc) -
00:00 - Intro
00:29 - Who's Exploited?
02:40 - Fair Equity
04:33 - The Early Employee
05:38 - The Googler
06:33 - The College Student
06:52 - A Seat at the Table
07:38 - Effort Imbalance
08:40 - Is This Working?
10:36 - Getting a Good Deal
11:55 - Part of the Problem
12:31 - You Were Warned
13:35 - How Do I Fix This?
16:35 - Know Your Value

[@ycombinator]

Alright technical folks, share your work horror stories in the comments so others can avoid similar situations!

[@chris9352]

15:58 "You might have to switch jobs". It's not that simple.

[@MubashirullahD]

This was gold, what pure water are you drinking? Is it some fresh air? haha

[@prasenjitchowdhury6527]

Wow , so clearly stated

[@higy33]

I had 3% equity and built the whole of their MVP... I get rekt 😢

[@SmartWizzard]

This is the best video to both Technical and Business people who are exploiting technical people.

[@lurker782]

wasted my 20s being the "lead engineer" at a 6 person company. company exited for $100m. i only got 100k. 40 now and im still working while the other 5 are retired. f those guys

[@avidreader6534]

wow, Im so sorry. Looking back, what would you have done differently??

[@cipher7565]

Let’s build something amazing together. I’m a SWE myself.

[@avidreader6534]

@@cipher7565 I think all of us here are SWEs 😂 I use java primarily

[@avidreader6534]

@@chan90s I’m sorry about that but hopefully you’ll reap a lot more. thanks for letting me know tho, I will job hop as frequently as Possible lol

[@charlesb5_]

You did not get enough shares compared to them?

[@tianren349]

In my case, I was the first engineer hired to write code alongside the only co-founder who also wrote code. I received 1%. Two of us, along with one tech intern, developed the prototype. I worked like a dog to write code, develop demos, handle sales, and implement pilots that eventually led to contracts. We raised 5m in seed funding and closed series A last year. Three years into it, I finally realized I was doing the hard work to make someone else rich. So I left and started my own startup and applied to YC. However, I must admit, I'm rather shocked to learn that I have been exploited. They didn't even allow me to call myself the founding or lead engineer.😂

[@_VeritasVosLiberabit_]

People who do what they do just because they want to be rich will always exploit others (even if unintentionally). This is what I have identified since I started my working life (if anyone has a counterexample to this, I am happy to read it). If you don't want to be exploited, identify people whose only goal is to be rich and stay away from them.

[@the_real_cookiez]

And now you learned that you could just do the exploiting yourself LMAO

[@samgould8567]

@@_VeritasVosLiberabit_ Like most VCs?

[@JoshIbbotson]

@@heanokim252 You must be one of those exploiters

[@heanokim252]

@@JoshIbbotson 1% with salary for first non-founding engineer is standard practice in silicon valley. founders often don’t get paid until they’re able to prove the idea has value. if you want significant equity, start your own company and work without a salary until you can get funded or go bust

[@sonicjoy2002]

This is exactly what happened to me. I was 1 of 3 founders at my last startup and I'm the only technical co-founder. I got 5% equity, and the reason the CEO got 65% and the other guy got 25% was that's their idea; while I was building the products they were even part time working for some investors on some marketing stuff; the other 2 founders were in the board of directors while I was not. I didn't get much exposure to the investors unless they insisted to see me. I quitted too late, now think back. I have grown the tech team to 10 engineers and built the product to raise a few millions in series A, and my share was worth only about $100k. Yep totally ripped off.

[@spencerchubb]

I don't mean this to be disparaging but I'm actually curious. Why did you agree to the terms? Did they do something misleading that others should watch out for?

[@yosoyfantastico]

which company was it?

[@SlavaEremenko]

@@spencerchubb he most certainly agreed because it was beneficial for him at the time

[@M3talr3x]

I was a senior engineer at a cloud data aggregation startup, non founder hire with a 1 year vesting cliff. Top contributor across their core product and was let go 1 week before my vesting date for "performance".

[@louiskapp]

Sorry for you, this sounds awful man... It seems like there is no real way of protecting yourself against this right as long as you are "only" an employee, right? If the founders are douchebags, they could always pull this off

[@nothingtoseeherefriends]

oh and if you did that's a good lesson why you don't sign anything saying you wont sue

[@domthefounder]

coud've seen that from a mile away. Zuck did that to his people

[@MubashirullahD]

you sure? There is a story about an artist who got paid in stock and ended up a millionaire. @@domthefounder

[@reprovedcandy]

I just joined a company as their CTO and they wanted a vesting period of 4 years. I laughed and said if they want that, then I vest evenly month over month and you're only cause for termination to remove me is gross negligence or illegal behavior.

[@AlbertoR139]

This issue is near and dear to my heart. I've been there and I see this all. the. time. Technical founders, first engineers and the first handful of employees get absolutely shafted. It's a pretty systematic issue. Having YC speak about this publicly is a huge step in addressing this issue. Thank you for all that you do.

[@SacredCASHcow]

I have a product about 80% done with the MVP I wrote by myself. what exactly is a fair equity to give to a cofounder, possibly a tech lead I could bring on to help me?

[@AlbertoR139]

​@@SacredCASHcow It can vary massively, but you want to make sure whomever you bring on is as motivated as possible to help you build your company. If it's a co-founder you'd want them to be as motivated (and incentivized) as you are. A co-founder that has half the equity as you do will be half as motivated. @3:30 Michael says "the vast majority of the journey is ahead of you, not behind you, and you want your co-founder to feel like owners and partners". The way to achieve that is with as close to equal equity as possible.

[@chrisli5750]

This is the first time I've seen someone bring this phenomenon to light. Bravo, guys! You're making me want to cry.

[@denniszenanywhere]

Probably the most important issue they have tackled.

[@pieflies]

Be careful about thinking that you’re learning lots makes up for being financially screwed. It’s easy to think that in the moment and then regret it later. Remember that you can usually get similar experience at another place that will pay you more honestly.

[@GalVirable]

It's a video from YC, they pitch this thinking because that's how they make money.

[@matthewwelch1537]

Joined 2 other guys as the only technical person for 10% 6 months ago. They said “you build it, we’ll sell it” then about a month ago, I got on some sales calls with them and realised they had absolutely no idea what they were doing. Like they didn’t understand basic stuff like what SaaS was, what “scalability” meant or even what an API was and they would offer implementations to people for $10000 with a 95% discount and other ridiculous things. Then they got upset with me for revealing company secrets to customers such as the fact that we use AWS. Meanwhile I’ve run out of money, can’t pay my credit card and they’re flying around the world doing whatever. So thanks for the video! Leant some cool AWS and Django skills along the way though!

[@isaackoz]

I'm in the college student category. Didn't know my true value and spent 8 months building an application while constantly being told that they were waiting on me to launch. Didn't sign or get any equity because it was family and I was told I would "be taken care of" aka an "IOU". Worked like a dog, didn't get to enjoy my summer, and was barely able to afford to live. Anyways, they blew thru all the funds, I finished the MVP, and they still haven't gotten a single customer. The only thing that kept me sane and held me back from quitting early was that it was an opportunity for me to learn and expand my skill set while still in college. In the past year I've learned more about server architecture, website development, frontend, backend, etc. than I would ever have in college. Plus I've learned a ton about starting a business and how to lead one. Of course I'm only in my early 20s and got a lot to learn, but I'm confident I'd be able to start something of my own in the next 5-10 years. This past year has definitely been a "1 step back" year, but I know it'll put me 10 steps forward in the years to come.

[@TSERJI]

what programming languages did you use and how long did you take to learn them? Just curious! I'm a college freshman btw

[@isaackoz]

@@TSERJI It was a NextJS + ExpressJS setup so I used Typescript for both. About 2 years ago I knew nothing about websites or web applications. Started with a few tutorials on youtube then just went on my own from there.

[@maximela-x568]

Did the same Worth the grind even if I didnt get rewarded fairly after for what I put in The knowledge gained is worth more than anything Only thing is that it must not go on forever

[@AdamHillbilly]

Connected with this 100%. I was tech co-founder, exploited for 3 years as slave labor, and my equity (which would be 10-15% max by then) has still never been transferred. ZERO. While I was personally sabotaged financially, the company I helped build grew to have the financial resources to now weaponize against me for a long and expensive legal battle for the money and shares I am owed… I’ve seen almost identical situations happen to colleagues with shares that never vest. Stay safe out there folks, there’s some real sharks who will eat you alive and keep on swimming with no conscience or consequences.

[@MattMcT]

This hits freaking HARD. I mean, in one hand it made me get emotional just to realize others have clearly gone through this sort of exploitation from business people. For me, I grew up on the U.S. Luge team… so my mental strength and drive today are blatantly due to my sport background. Business people really take advantage of this. But I didn’t get that until recently (like the last few years). My only advice to people out there trying to not get exploited as devs/unicorns/leads, is only trust people that can produce actionable user facing product characteristics. If you don’t have that or can’t find that, then you have to start a firm and go it alone. It sucks, but it’s just the way it is for now.

[@moji962]

Michael points out a good tip, asking for a seat at the table is worthy of the effort. I changed some companies because I found it difficult to ask and I expected it to be given to me since I showed a lot of passion. Thanks for the good content.

[@marccox8977]

Wow, Dalton and Michael so true - glad you see it and spoke to it.

[@shivendrasingh8484]

Thanks for bringing this out YC. This is valuable. ❤

[@csmoothnj]

I appreciate the extent to which all of this applies to someone “technical” in a non-engineering, yet irreplaceable function in a growth business. Thinking of a specialized finance contributors in a fintech (legal / legal startup ; biologist / biotech med tech) etc.

[@user-sg6jo9lh6i]

Would love to see some content for non-technical folks - around a) skills to build, and b) becoming technical, and other things relevant from context

[@ycombinator]

Keep an eye out later this month :)

[@owoahenejoseph3094]

After watching this video, I tabbed both links in the description. My story lives in every word that came out your mouths. Thanks guys 🤟

[@mckaymower]

I'm technical looking for an awesome non-technical co-founder to startup something. That's my horror story. It's actually pretty difficult in my opinion to find someone who doesn't just talk and get motivated, but also has DISCIPLINE to put their head down, get to work, and discuss ideas.

[@smartis7404]

Hi bro, I'm that person, I'm technical and made an MVP but right now I'm looking for a technical co-founder because I'm doing fundraising and it may take months but startup needs to progress during this time. Let's connect and discuss more if you are interested.

[@kipsangaaraplimo1442]

@@smartis7404 lets have a conversation, I am interested

[@mckaymower]

@@smartis7404 Sure, we can discuss!

[@reprovedcandy]

very, very rare and hard to find.

[@patricksongore]

Hi, I’m the other side. I used to be just a non technical founder now I’ve just started again and I’ve made an MVP etc: let’s talk happy to discuss anything that might help you guys. I’ve done 3 fundraising rounds myself whilst being a non technical

[@FemboyStrategy]

Oh this video feels amazing, Dalton and Michael just vibe so well and this feels like such an interesting podcast!

[@rudrakshya1]

You guys are just connecting my thoughts. Thank you very much.

[@jcs184]

This is great. Most developers including me does not inherently care about these stuffs but these are extremely important to avoid feeling screwed later. This is a great checklist.

[@pedro.zurita]

This video has come at a golden time in my career. Thank you.

[@Rarests]

Such a valuable video. Thank you guys!

[@dvtt]

Thank you for making this video!

[@pencilcheck]

The moment you see yourself as a software engineer you are having a difficult time, because those business people will always use the argument that engineers is everywhere but they are special. Sometimes you just have to reject those people and go with someone else that value your skills as special.

[@MubashirullahD]

Early employee. Git history shows high churn. Build the product nearly from scratch. The number of iterations grayed my hair. I got the same pay as a normal company engineer. No equity, no healhty work life balance (partly self blame for pushing myself). Effort imbalance would burn my flesh. Asking why to decisons would get me, dont ask questions by the 'idea guy'. Idea guy would additionally do a shitty job of research leading to needless iterations. Deisgn guy would watch movies and sandbag. Saving grace: getting a good deal. The high learning opened other doors. Contract over, didn't even say good bye to old employer. Still angry after months. Getting counselling to let go.

[@DarsoMAN]

Great video and great convo

[@ewwitsantonio]

Excellent. Thank you for sharing.

[@wmcphail]

this was great - thanks!

[@SmartWizzard]

This is the video I wanted to show to the bussiness founders, that wanted to exploit me by giving nothing and asking to work and in future they said they might provide ESOPS. So I told them I would be interested to help the junior dev instead of me actually working my yass hard for the startup.

[@robchr]

I was grossly undervalued at several companies for years. Some of that is because of my geographical location and some of that is because I didn't push as hard as I could have to get proper compensation for my work. The best negotiation tool is looking for better positions in my experience.

[@Elingsanto]

This happened to me, and from looking at the comments, its a common thing that happens in the world. The funniest is when they tell you "Let us know how we can help" And they can't even use a CRM right. These stories deserve their own videos.😅

[@mohammadalaaelghamry8010]

Great video, thank you.

[@EdgarVerona]

I have been that "you are not considered a founder, but are the only engineer in a company of 3 people I was young and naive, and believed in the product. I accepted a lot of late hours and literally being paid 1/3 of the going rate because I had no idea I could do any better. When I figured it out and walked away, my whole life turned around for the better.

[@BaileySimrell]

Great video, thanks for sharing

[@zackjensen4484]

i spent an entire year building a yoga app, was in YC summer program back in 2019. The "business side" of things didn't deliver on the customers we wanted and I had spent 6 months building the entire app and adding features.

[@Regina.Clarke]

Listening as a founder who wants to do the software engineer right. I’m hiring but hopeful to make them the co-founder and CTO, but they will get equity regardless. Thanks for this YC! No one should be taken advantage of.

[@african_forum]

Just curious. What are u working on?

[@StrandedKnight84]

Spot on. This sort of stuff is way too common.

[@vaibhavkoyadala]

Perfect timing.

[@midecoaster8783]

Now, go speak up to the 'Business guy'😂

[@kiranbhanushali7069]

What should be fair value for early employees (tech) as compared to founders of a company? Assuming all works at their expected level as per domain.

[@csanson]

@Dalton & Michael give us a full tour of that single cab VW you guys have in the background

[@razvancoca1472]

thank you!

[@Elemblue2]

A long time ago I was employee 1 of a startup, and I ran like a steam engine to build that company on my back. By year 5 I was exhausted, and they had to hire people in to replace me but the point is I got them to a point where they could hire those people. Those people also go paid more, because cash flow existed. It was frustrating to see that. When I confronted the founder about it, they did feel bad since their whole existence was based on my own work as well. So they said I could have unlimited free amounts of the product. Just trusting me to only take what I needed. Honestly, I was fine with that outcome.

[@DrTune]

Ha 9:14 I was working with a small startup (where I had decent founder-level equity) and I was the first person to see it "not working", especially having recently worked on something that took off like a rocket, within about a week running the backend and watching adoption and stickiness numbers it was obvious to me the whole idea was not going to fly. Bless their socks...

[@geeky5015]

exactly the thing i experienced too, ended up we rose 2M and i got offered 7% ... with giving away part of those 7% during next round which was planned to happen very soon and as tech co-founder can't leave to get the $ during such round, so i would be ending up with

[@RicardoTejadaAntonio]

Very relatable.

[@onair5900]

I've always been, I'd say, brutally honest when looking for a tech co-founder and talking to prospects. In my experience, a minority of them were ready for such a commitment. Most of the (inexperienced) folks assumed that a startup is like a side hustle or a blitzkrieg.

[@jasonturner3234]

In my case. My cofounder was a hired situation first. Being paid a fee for the work provided, we had a contract in place. Then he liked what we were building. He wanted to come on board. But he didn't actually build the product. I built the prototype first b4 he came around & his team built our app. Otherwise the Desktop platform has been built by me. My lawyer agreed with my assessment and we put in a 2 year cliff for protection.

[@alexanderfournier7292]

building a prototype and a even an MVP (let alone a product ready for customers) are wildly different things. Sounds not far off from what YC is describing here.

[@wahyujus]

this is good this is so relate

[@kipfitpal]

For each of the 10 product ideas people have brought to me, i've asked them these questions: Do you have anyone you'd describe as a co-founder? If yes, I'm out. Otherwise, I'd simply tell them If I must build this product, I should be your only major co-founder. In that case, the least equity ratio I'd accept is 45 - 55 if its just the two of us or 40-60 if we're 3 and i'd require that the third partner must be a finance or marketing professional.

[@marcinszyda9356]

Great video

[@simonnordon8421]

Great Video and very descriptive of a situation I was in. Looking back at it, I think I wasn't getting a fair deal (63k/yr at the start). I don't regret it though, as the amount I learnt really let me catch up to my peers working for big tech (the same companies that wanted nothing to do with me). I left that company and now have a much more suitable job where I don't feel exploited at all, but it wouldn't have been possible without going through that grind.

[@reapersenpaix99]

Man I wished this video was out 5 years ago, but I did realize these myself and left the startup 😂

[@user-xm2nq3ek7y]

Could you make a similar video for the people who are in small IT departments for large non tech companies? Such as utilities companies, insurance, government owned companies etc. Some of the culture smell the same as start-ups but in an enterprise environment. Salary sucks and you wear 3-5 hats despite being hired to one thing. I am “lead” but have to do architecture, and on paper only hired to do development as a developer.

[@SlavaEremenko]

Having to wear 3-5 hats is a WIN. When you go into the real development world, you’ll realize that there are too many specialist who lack any common sense in very close areas. Like backend devs who introduce visual bugs every time they touch HTML or have no idea what users want or how to talk to stakeholders. BUT it also means that you likely lack senior level skills in SOME of these area… for an example not that good at OOP, or testing, etc. My advice is take the W and find somewhere BIGGER that you can be a full time full stack dev in as a mid level dev and I’m telling you, you will progress to an actual LEAD in a couple of years and make a bank :)

[@parambeersingh2019]

this is what i wanted to watch on youtube

[@amancca]

Hello there, I'm solo developer and founder. I almost tried to work with 3 non technicals and I gave up to work with others since then. They was not motivated at all about the process but they always love the end ☺️. Please give me some advice if you read so far and have something to let me know

[@davidkang3518]

Business person here, ask questions like this: 1. What does commitment mean to you? (Hours? Meetings? Results? Effort?) 2. What kind of legacy do you want to leave behind? 3. Can you describe a time when you made a dream into a reality? 4. What is your purpose? I know these sound fluffy, but I think they’re strong indicators of how hard someone wants to truly build something

[@93hothead]

@@davidkang3518hey business guy please understand engineers only like technical stuff everything else that requires me to put a happy face in front of you just because it makes you feel nice is none of my concern

[@sakchais]

I’ve been exploited before. This video is spot on.

[@NameName-jk4py]

I applied to YC with cofounder. My cofounder quit.Should I change the application?How much my chances would be affected as I would become a solo founder?

[@amoltakkalki]

The laugh at the end was evil good.

[@samario_torres]

Love the topic!! - fellow swe

[@chapterme]

Chapters (Powered by ChapterMe) - 00:00 - Intro 00:22 - How To Not Get Screwed As A Software Engineer 00:29 - Technical Folks Getting exploited 02:40 - Fair Equity 04:33 - The Early Employee 05:38 - The Googler 06:33 - The College Student 06:52 - Decision Making Process: A Seat At The Table 07:38 - Effort Imbalance 08:40 - Is it Working? & Opportunity Cost 10:36 - Things Are Going Well: Getting A Good Deal 11:55 - Your Are Not Exploited If You Are Part Of The Problem 12:31 - Expectation Setting: When People Are Honest & You Made The Choice 13:35 - How Do I Fix This? 16:35 - Know Your Worth 17:24 - Outro

[@chicoliu6057]

Hey you guys should do one for Sam: How not to get screwed as a CEO

[@whatmoon1905]

I'm a non technical founder trying to be ethical about getting a prototype built. There's many engineers who could validate my concept, but fewer who could carry it in the long run. It's challenging

[@benbowers3613]

To make it ethical, offer a fair percentage of the company. Ideally, the percentage should represent the percentage of hours spent by each party. Given that both roles are not completely comparable, that's not always realistic. So I would say, if your technical founder is really doing the heavy lifting, you should offer 50%. 45% percent maybe to keep executive control. If you are not prepared to offer 50% to someone who is going to be doing 80% of the work, then you need to either hire them with money up front or build it yourself.

[@whatmoon1905]

@benbowers3613 %50 to a cofounder/CTO is absolutely right, I'd be happy to. I'm looking for someone to spend 3 days building me a really simple prototype to validate my concept. There's definitely a gap there

[@jimifash]

Dalton and Mike: Equity imbalance satisfies the following conditions: 1. If the start-up must be capital-intensive and requires a lot of hand holding and legwork on the part of the nontechnical founder before any material code is written (e.g., many highly regulated industries) 2. If the original technical co-founder was able to write a material part of the code (useful enough that he's able to bootstrap the start-up) before inviting others to be his co-founders I'm sure there are other complicated examples. A lot of people you call solo founders remain that way without co-founder help for a long time because of the humans have treated them in the past; especially if they're now able to work on their own for a considerable amount of time before involving the rest of the world in what they do.

[@marvin_hansen]

I’m a Ai engineer and I’ve been screwed over by an MBA who reincorporated behind my back to secure a joint venture with him as sole partner so I’ve lost my entire stake. Never again. Now, starting my own company as sole owner, got into a Harvard Entrepreneur bootcamp, and play by my own rule. Lesson learned.

[@matthewmolinar220]

What actions does someone have available to them if this happens?

[@hydenp]

Dam that’s screwed up man.

[@OpenAITutor]

Engineers get screwed in the end. But we need MBAs to make it a running business. Folks like us do it for the love of the tech and so much for the cash. Great way to get screwed, though. Sorry about this.

[@Akash_Ghosh256]

Hi I am a college student pursuing btech CSE and looking for internship if you want I can share you my resume .

[@MarkMark]

Oh man so sorry to hear. Best of luck with your thing!

[@VictorPorton]

We have the reverse situation: I as the technical founder of a social network have 85.95% of equity, and the marketing has 10% and fundraising has 4.05%. Do you advise me to subtract from my equity and add to them?

[@benvreed]

🤣 SWE here. I had a biz founder approach me and offer me 30%. He had given the other cofounder 10%, and kept the rest for himself. Needless to say, I kept my job.

[@fadhlirahim]

I wished I saw this 6 years ago. Could’ve save me a lot of mental anguish.

[@denniszenanywhere]

It took so long but glad they finally tackled it.

[@grantdavies7561]

Perfect ending on the video. The whole video can be reduced down to the last few sentences. 17:00 😂.

[@haskellbear]

How do you learn to know your worth? I've found this one of the most challenging things.

[@googleusers]

dude , i'm technical etc... i just lunch my startup ( 10 month a go ) , i pay all my team alone, we work we have the same skill but the time i spend on this project it's crazy, and all my save money go for this project, and i pay small salary to all my team, but i can't give too mutch share it's impossible, they don't want work for free.

[@luke5100]

Well I’m just a mid level dev at a minor startup so it doesn’t sound like this vid is for me, based on their intro. Way to alienate potential viewers

[@DoubleCrossSword]

Just about to sign a deed, then this popped up. As someone feeling like they are contributing more than other shareholders, I’m feeling bummed that I got offered the lowest share

[@pieflies]

Ask for what you think you should get, both in terms of money and work conditions, then if they can’t/won’t give you what you want you decide whether you want to commit to it or not. I regret that I didn’t ask for what I wanted when I got screwed in my earlier career.

[@luigimorel8382]

Same situation, mate. Renegotiated my equity share.

[@plumbing1]

As a plumber, this is interesting

[@The_Quaalude]

Yeah bruh, I can barely code but still valuable business information 😭

[@fappylp2574]

At least you have a real job! It's tough that software development has apparently become a "get rich quick" scheme, where you either retire at 29 to live on a tropical island or become a failure.

[@yadniksable]

When doing it together from scratch or only the idea is present 50/50 Otherwise not equal

[@DecypherMedia]

This doesn't address the core problem with startup cap tables which is the liquidity rights of the executive team vs. early employees. You could be the first employee at a successful, growing company. You could have a significant equity stake %-wise in the company. But the founders could still raise a venture round, liquidate their own personal equity in a secondary transaction as part of the round, check out of the company, run it into the ground, and you as an employee without the same liquidity rights can still end up with nothing. Until the liquidity issue is addressed, all of this advice is meaningless because you can follow all the advice in this video and still get horrifically exploited.

[@avidreader6534]

could you explain more please or point me in the right direction of resources? Im a new grad in the interview process for a startup and I don't want to get screwed over

[@DecypherMedia]

@@avidreader6534 I can elaborate what happened to me at the previous company I worked at. I was the first employee, had a large equity %, but was not a founder. the company was successful and we were able to grow our revenue very quickly once we began monetizing. off the back of the insane hard work the initial team had put in to get the company to that point, the company raised a very large Series B venture round. As part of the Series B round the 3 founders of the company each sold some of their personal equity stakes and became personally rich. They then proceeded to check out of the company, made nepotism hires, hired incompetent middle management etc.. and ran the company into the ground. The company had enough cash from the Series B to sustain itself as a personal piggy bank for the executive team to loot for the next decade, but will never justify it's valuation and the employees who worked to build the product will ultimately end up realizing no value from their equity while the executive team got personally rich off the backs of our labor. the core problem is the executive team was able to essentially exit the company off the backs of their employees labor without needing a formal liquidity event to do so. This is increasingly common in private startup markets, so unless you have guarantees around your rights to participate in liquidity on your equity you can be exploited this way

[@justinwlin]

@@avidreader6534as a new grad to a startup - unless you are like an amazing engineer I wouldn’t worry too much. You’re there to get a salary and eventually move out somewhere else. I would argue its more common that you can get promised like .01% equity bc they promise u the startup will become a billion dollar company and they skimp you on your salary. So optimize on actual cash value salary

[@nothingtoseeherefriends]

what clauses would be good to include into our contracts to have the same liquidity rights? I feel like depending on the company stage and skill level of the employee something like that can be negotiated

[@DecypherMedia]

a liquidity guarantee that if the executive team is going to sell a % of their equity in a secondary transaction, that you as an employee have the same right to sell the same % of your equity in that transaction. Or else you can just get dumped on by the executive team if they choose to.@@nothingtoseeherefriends

[@smartis7404]

I'm technical and Looking for a technical founder

[@JDSileo]

This is why co-determination needs to be codified. The monetary investor and the labor investor should both have a seat at the table regardless of their function

[@MultiZmd]

Labor is not an investment, it is just labor.

[@JDSileo]

@@MultiZmd your devaluation of people who invest in their company with continued labor commitments (employment contracts) is so noted.

[@jibbscat5146]

Sweat equity is certainly a thing if negotiated.

[@user-xf6ef8ec4z]

In my experience, writing code makes it pretty easy not to get screwed if ya know what I mean...

[@mukymuk3]

If you're being offered equity by a private company then 99% of the time your probably gonna get "screwed". To avoid: just assume that the equity you're being offered is worth zero (you'll be right a vast majority of the time). There all all kind games that get played with start-up funding so it doesn't matter what percentage you have--it can and will get diluted over time and locked-out for a number of reasons--both malicious and benign. If you don't bring money to the table then you have no standing and by the time you put in enough sweat equity to really matter the company will have already cashed-out, gone public, or gone broke. No, you are not as valuable as you think you are. That said, there is a TON that can be learned by working for a start-up. It's a trial by fire for sure. Highly recommended, especially for younger folks with few commitments.

[@0xNateX]

where is this handy checklist?

[@denniszenanywhere]

I thought this topic was taboo as it’s been festering for decades but no one talks about it, not even media. And I was in media who could never even talk about it. Big business is too powerful for an employee. There are still many issues they glossed over in this talk but it would scare many people to even know the ugly stories out there.

[@elvinilogy]

I worked with 30 technical people and I was the only non technical person.... It was so difficult to lead the group away from failures. They saw no authority in a person who is non-technical. They all were reinventing products that already existed, believing small new features would create value customers wanted. They were jumping to solutions without defining problems properly. They were throwing pasta against the wall, basically to see which which one would stick. All these 30 technical people were MIT and Harvard students.

[@TochStyle]

interesting

[@simonnordon8421]

My Story. I was the first "Real" Developer to join a company worth $500,000 at the time. I fired the pretenders within 3 months and built up a team of actual developers. Business went from $500,000 valuation to $12,000,000 in 2 years. Half of that time I was the only developer. Eventually got 0.8% equity for my hard work. Decided to move on.

[@shouldersofgiants4649]

"DOers over Pretenders" need to happen for the capitalist model to be sustainable

[@TalkingDonkeyz]

Capitalism is the only model where you find out who's who

[@willphelps40]

This 100%. For technical or business-specific you need good partners who deliver.

[@ihmpall]

Not at all. Doers will still do regardless the incentive. People like me will chill and make all the money

[@ifeoluwaadeoye6557]

The capitalist model is literally the doer being exploited, it's a feature not a bug.

[@TalkingDonkeyz]

@@ifeoluwaadeoye6557 the doer of what though repeatable low skill work?

[@mikevan67]

I think they made this video for me. Right when they said 90/10 split. I’m the non technical founder. However the person I partnered with is my VA from my other business and I’ve never met him in person because he lives in the Philippines. I hope this doesn’t keep me out of Yc because I’ve done most of not all of the heavy lifting. I know I will need him in the near future because he and his team are highly knowledgeable in STR customer service. His knowledge and network is vital but we need a better MVP and he doesn’t code.

[@patrickchan2503]

cool. I thought it was about burnout as per thumbnail, it was more. Thumbnail could do with better representing the great content as I nearly skipped it 🙂

[@MartinCharles]

There's this mind virus going around the startup ecosystem where people try to call engineers who built initial product and took the same amount of risk as the founders early employees and pay them an insultingly small amount of equity (less than 5%). I'm not entirely sure what the root cause of this miscalibration is. Thanks for denouncing this behavior publicly, having common authority to defer to helps massively when negotiating from a position where your counterparty doubts your credibility.

[@consumidorbrasileiro222]

I dont understand what "the googler" means here. Can someone help?

[@Trizzer89]

How do you prevent your boss from spreading false rumors about you and taking credit for your work?

[@masterkraft4746]

you quit

[@LCTesla]

Software devs should be leading, not following.

[@criticalbit]

This guy gets it. 🫡

[@amogugodswill2027]

It's not that simple, it took me being ripped a few times. before i flipped every one.

[@mecanuktutorials6476]

Not necessarily as others are saying. The customers tell you what they want. You do what they want. You take their money. That’s how all businesses work.

[@aprilmintacpineda2713]

Fair Equity: What about someone gets like 5% but he does all the technology work -- coding in frontend, backend, infrastructure, deployments, etc but he didn't shell out cash and some other people insisting they get 95% (shared or solo) because they shelled out cash. Asking because this is usually the offer I get HAHA

[@hylje]

Depends on if they shell out that cash to give you a salary or not.

[@aprilmintacpineda2713]

​@@hylje they usually shell it out as salary of course, but they would use the 5% equity to offer you a drastically low salary, like usually even less than 50% of what should be your salary.

[@OpenAITutor]

Sad but true.

[@MikkelJans]

I can only recommend leaving immediately if you sense that you're being screwed over. It's always better to take whatever financial loss that it may require to switch, then having to deal emotionally with being backstopped by "friends". Don't expect founders do the right thing or to uphold any promises or to be honest in any way. No matter how well you think you know them.

[@Regina.Clarke]

2nd comment! This shouldn’t be useful for people who are technical in any space. I was a leader of a company and working like a founder but the equity wasn’t fair for the contribution even the accelerator folks questioned it. I accepted my losses and took all of the experiences as a lesson. Everyone making large contributions should evaluate the whole.

[@rogerssampaio652]

What about a person that was taken his equity back because it was not productive enough? It was not good enough to be a “partner”.

[@gorangagrawal]

00:59 to 01:10 Erlich Bachman, is it you?

[@jasonpeltzer1907]

I wish I had seen this video a decade ago!