Over the past 6 years I've worked for, or with about 6 YCombinator
companies. I've also interviewed with about a dozen, and turned them
all down. I tend to always turn them down because they offer
below-market compensation, pathetic benefits packages with the
expectation that you will work like a slave in order to make their
founders wealthy. I have nothing against the founders, they're good
guys, I blame YCombinator. YC seems to be a cult which is quite adept
at turning college students into millionaires while creating billions
of dollars of wealth for Venture Capitalists.
Yesterday I ended conversations with a mature YC company. They should
be the stuff of dreams, 16 people, profitable, and have a $40m
valuation. They've taken in roughly $12M in Seed, Angel, and VC while
insinuating that they have about $10m in the bank. Good on them. I
turned them down because they were preparing to make me a below-market
offer in exchange for what I expected to be an insulting amount of
equity, and a non-existant benefits package. When I asked them to
describe their benefits package, they spent 4 days putting together a
glossy PDF describing the standard, run of the mill Blue Cross PPO,
Delta Dental, and VSP plans. *yawn*.
Though they brag about their "Unlimited Vacation" (today's buzzword),
they offered only 15 days of PTO, standard for any professional job in
the United States.
After turning them down, I spent some time comparing the risk of
working for them compared to another job offer I have on the table.
I'm not going to mention salaries, but I'm a senior engineer with 20
years of experience and can command a pretty good salary. I'm also
living in the most expensive real-estate region in America. I would
like to buy a house in the next two years, which means I need a good
salary, and to work another 15-20 hours of contracting per week in
order to save up the minimum $120,000 down-payment required to buy a
3-bedroom fixer-upper in a marginal neighborhood in the East Bay. I
could never afford to buy in San Francisco.
Here's what the average YCombinator benefits package looks like:
- $0 premium on Blue Cross PPO, Delta Dental, and VSP for myself
- $100/month premium for my daughter's health insurance
- 15 days PTO
- Maybe a foosball table
- Catered lunches from Specialty's (which makes me vomit in my mouth).
Here's what a good benefits package looks like from a company who
cares about attracting senior employees, and not just college kids:
- Agreement to pay for 3 conferences per year(Surge, Velocity, and
ChefConf), an $18k/year benefit
- $2500/year FSA, Employer funded
- 401k, 5% match. (II end up with $24,750/year in my 401K plan)
- Full health insurance for myself and my daughter, no Premium
- Health club membership
- $150/month Clipper card budget
- 30 days of PTO, a $9,840/year benefit
Company B is a more standard company, they're in their C round of
funding, but still only 4 years old, like the YCombinator company.
Both companies offer the same, worthless stock options of 0.50% of the
company, before an expected dilution. In a magical world, both will
sell for about $75 million, likely a "talent acquisition". Both
companies' founders will split between $25m-$35m of that purchase
price, and will also probably see another $10m each in a 2-4 year
earn-out. In that $75m acquisition, assuming no dilution, I will gross
$375k. The YCombinator company probably didn't care enough to have
their lawyer draw up the paperwork so that their employees can execute
on their stock options from the first day to avoid AMT.
That $375k would then be subject to 63% taxes, netting me $138,750, or
a 20% down-payment on my piece of the american dream. The other
company does the right thing, so I only see a 15% capital gains tax,
so I net $318,750, or about 1/2 of a house. In addition, I see another
$290k in gross compensation from the company who put together an
enticing benefits package, whether they fail after 4 years, or they
have that $75m talent acquisition. On top of that, company B realized
how little their stock options are worth, and in order to hire the
really senior people they're seeking, they offered me what I expect is
about $45k more than the YCombinator company was going to offer,
bringing that gross to be $471,360 more over the 4 year period.
YCombinator founders do very well, so I don't blame them for drinking
the kool-aid and being put-off by somebody who doesn't want to work
60-80 hours per week to make them wealthy. They're too blinded by
their peers success to understand why anybody wouldn't want to work
for them. Most of them are children fresh out of college, so they
wouldn't understand why anybody would care about benefits and
time-off. They're working 100 hours a week and want you to as well.
The team at the YCombinator company seemed awesome. I really enjoyed
meeting them, I have nothing but respect and admiration for them.
They're smart mother-fuckers. Their product means nothing to me, it's
not going to change the world, but that's OK, neither company is going
to change the world. All start-ups today are about supporting
advertising in one way or another. If I truly believed in a company, I
would work for $100k/year with no benefits and as much stock as I
could get. I haven't believed in any company I've worked for since
Napster.
To all of my colleagues with whom I have been in the trenches, please
repeat after me, "Fuck you, pay me."
