Consider the large companies with hiring processes intended to try to acquire each employee at the minimum compensation each individual will accept.
I suppose it shouldn't be any surprise if the company (or a manager within the culture of that company) also tries to get the maximum value out of each employee according to what each individual will endure.
Now consider closer to home for HN. Typical pre-seed/seed startups, where the first couple engineering hires might be offered 0.5% to 2% in ISOs, although critical to getting to MVP. While the founders, who started months earlier, get an order of magnitude more equity, and under better terms. Not because that's fair or fosters an environment that deserves much loyalty, but because they're trying to get the employee at the minimum cost they'll accept, even to the employee's disadvantage.
This is a good comment. In my years I’ve easily had the worst experience with startup founders (as compared to managers at BigCo).
I think with BigCo managers they are more focused on getting performance — they have somewhat limited control over budget.
But founders tend to give the energy that they want to make sure they don’t give away too much. They act much more like it’s theirs personally to lose.
> Consider the large companies with hiring processes intended to try to acquire each employee at the minimum compensation each individual will accept.
Not always the case. When interviewing for my first FAANG job (coming from defense) I requested what I thought was a reasonable salary, but turned out to be a low-ball offer. The recruiter came back and told me that I wasn't asking for enough and that they wouldn't pay someone so below the average for their level.
This is not the company being generous to you. This is a recruiter who knows that if they accepted such a low ball offer you would quit as soon as you googled the average salary for your role. They still want you to make a low-ball offer, but something closer to the average.
Also, if it's a third-party recruiter, they want to feed a stream of generic candidates, and at a good commission each (so one oddball with too-low requirements only hurts both)?
Recruiter at bigco dgaf what happens after you sign the offer. More likely it was just company policy - they have more or less rigid pay bands for each level and TP was outside of those.
Right, but that company policy is there for a reason. Not out of generosity, but because they don't want to invest time and money into people who are likely to quit over a compensation that is so far below the average.
We're not disagreeing - I'm just providing more context because I know some folks (lets be real here - it's pretty much all of them) like to spin it like they're looking out for the candidate when this happens obviously to improve the closing odds. It's basically "good cop/bad cop" routine.
It's also important to note that pre-seed/seed start-ups tend to have far more severe funding problems than, say, the Googles or Microsofts of the world (or really any billion dollar, fully operating tech company). They typically can't afford to offer highly competitive outrageous traditional compensation.
They're not always trying to offer as little as they can, sometimes it's all they have to offer and so that's what they put on the table. Rather than as little as they can, in that scenario it's in fact closer to the sane maximum that they can offer (without giving every employee 1/4 of the company, which is impossible).
Microsoft won't be bankrupted by paying its next 500 employees a million dollars per year. Your little pre-seed/seed company will instantly vaporize if you try to compete on the basis of salary-based compensation with already successful tech companies.
Hey look we've got $150,000 in the bank, we're still building our first product, and I'm offering you $500,000 per year in salary. What's the problem?
If they hired in the same funding round and have similar roles and experience, they should not. Some of these variables will usually be different so it is expected for the compensation to be different.
You are clearly misinformed because none of the things you listed are actually different for founders and first employees in an early stage company. Especially pricing…like what? It’s also common to have employee-like vesting for founders these days and investors check for it in dd.
Edit: i just remembered that sometimes (rarely) founders are issued “founders preferred” stock which is not actually preferred - just a type of common stock. You can read up on details here - https://mercury.com/blog/podcasts/series-tea/john-bautista
I suppose it shouldn't be any surprise if the company (or a manager within the culture of that company) also tries to get the maximum value out of each employee according to what each individual will endure.
Now consider closer to home for HN. Typical pre-seed/seed startups, where the first couple engineering hires might be offered 0.5% to 2% in ISOs, although critical to getting to MVP. While the founders, who started months earlier, get an order of magnitude more equity, and under better terms. Not because that's fair or fosters an environment that deserves much loyalty, but because they're trying to get the employee at the minimum cost they'll accept, even to the employee's disadvantage.