On 30 May 2013
in
Yes, Silicon Valley, You Are as Exactly as Vain as They Say,
Biff Baxter said:
I don't agree with all the people who whine about pretty much everything on this site but many of drew_eckhardt's statements are significantly innacurate.
drew_eckhardt says
With a positive startup liquidity event the CEO has just 10-20X the pay-off of senior non-management engineering staff at 5% versus 0.25 - 0.5%.
That's not even close to accurate. The CEO gets way more than 10-20x. And no, I don't believe that non-management senior engineers should get a big chunk of the company. Key engineers do, senior or otherwise, because they are making a big difference. Tons of engineers, like secretaries, aren't making big contributions. I am way more put off by millionaires who got their money because they got lucky just by being at a company instead of being a major contributor.
drew_eckhardt says
When companies like Google have $931K in revenue per employee and Facebook $1.1M it seems entirely fair for people building the product to receive 1/4 - 1/3 of that.
That is essentially communist theory.
drew_eckhardt says
People working for the Police department in San Jose get 50% of their final salary after 20 years service and 90% after 30 years guaranteed by the government.
I completely agree. Public employee pensions have become a special class privelege. The California teacher's union fucks over child students every day and several teachers have come out to say that it has gotten out of hand. Not to mention all of the other grotesque practices of public employee pension plans like the San Jose police. I'm not a fan of any politician but the mayor of San Jose seems to have done a pretty decent job of putting a dent in some of those abuses.
drew_eckhardt says
Venture funds work because 20% of their portfolio companies return 30:1 with exits typically happening 7-10 years out.
Not even close. Venture funds may put out glossy press releases about there success and failure rates but they never publish the real data. They often claim that 1 in 10 succeeds (that's 10%, not 20) when in reality 1 in 20 or worse is common at the most glorified firms.
drew_eckhardt says
A senior engineer can land 0.5-1% after series-A which gets diluted to 0.25-0.5% by the time a liquidity event happens
0.5-1% for a senior engineer is incredibly rare. You woud have to be one of the first 10 employees or a major player they brought in after the first 10.
Dilution after one round, let alone several rounds of financing, will be way worse.
Biff
