> At a financed, leveraged startup, you're not going to get that number in cash. But you need to get that number, risk-adjusted, in some fashion. Generally, engineers should not expect to be "worth less" to startups. They're just compensated using different instruments.
Completely agree.
> The problem with berating engineers for framing comp discussions in terms of their going rate is that engineers can't value equity the way founders can. It's an asymmetric information problem. The founders know more about the value of their equity and have more control over the variables that will change those values.
And this is the part where I personally believe in 100% transparency. I am here to build a business that will make everyone involved happy. I am not afraid to show you the things that are going well, or the things that are going terrible or to share any other number with you. Of course, you don't know if I am lying to you or not. But guess what? The same is true of any job. It is naive of the founder to believe that they can permanently hide the state of the startup to the people they are hiring. If I lied to you, you will find out soon enough and leave. There are so many amazing startups in Silicon Valley, that is dumb for a founder to lie about these things. So the better approach is to be 100% transparent from the beginning.
That's great, and I believe you, but you should know when you write things like this that every startup founder ever says the same thing. You can make a more compelling case with actual numbers.
The bigger issue though is, when someone comes in too expensive for you to hire, that's not a flaw in them. I am guessing you hire fewer people than I do, so, words and words and words to the wise: people are going to come in higher than you can afford. Some of them will be people you'd want to hire, others not. You are probably no more reliable at valuing them than they are. Don't get irritated about it and don't preach. Just shrug and walk away. Thank them for their time. Don't get mad at them for wasting your time. If you are serious about recruiting, nobody can waste your time. And nobody looks good trying to tell people they're worth less than they think they are. Ever.
Completely agree.
> The problem with berating engineers for framing comp discussions in terms of their going rate is that engineers can't value equity the way founders can. It's an asymmetric information problem. The founders know more about the value of their equity and have more control over the variables that will change those values.
And this is the part where I personally believe in 100% transparency. I am here to build a business that will make everyone involved happy. I am not afraid to show you the things that are going well, or the things that are going terrible or to share any other number with you. Of course, you don't know if I am lying to you or not. But guess what? The same is true of any job. It is naive of the founder to believe that they can permanently hide the state of the startup to the people they are hiring. If I lied to you, you will find out soon enough and leave. There are so many amazing startups in Silicon Valley, that is dumb for a founder to lie about these things. So the better approach is to be 100% transparent from the beginning.