Because VC funding is by its nature a Ponzi scheme hoping they can throw enough money at a business until it looks like it might be a viable profitable business to the “bigger fool” in the future (“$x is a gazillion dollar market. If we just capture 1% then we can be worth billions”). That “fool” can either be some other tech company that acquires it and let’s it whither (and the founders post a message about “our amazing journey”) or the public markets.
The retail investors don’t have any desire when the stock market is tanking to buy stocks in money losing former unicorns. The investment bankers who organize the IPO also won’t see the initial “pop” that allows them to make a quick profit.
Of course the employees who sacrificed real compensation in cash or RSUs in a public company in lieu of statistically worthless “equity” come out on the short end as the companies repeatedly delay an IPO waiting for the “environment to improve”.
All this to say, if you want to be a founder, go for it. But unless the startup you are thinking about has enough funding to compensate you as an employee at market value in cash, skip it.
> But unless the startup you are thinking about has enough funding to compensate you as an employee at market value in cash, skip it.
Yes, and the good new is these companies have been paying significantly more cash in the last few years. It may not be enough to justify moving or staying in the Bay Area, but many small companies are paying the same remote, which seems like a better deal than the big tech companies in the short term, if you're looking to cut costs while their equity is down.
There's a lot of bad jobs out there right now, but if you're not in a gambling mindset, there are some good opportunities to improve your overall financial position.
I took the route of working for a public $BigTech company. My RSUs for the year might be down 33% YTD. But at least they are will be worth something and I can diversify as soon as they vest.
Yes, I think those at larger tech companies are in a fine position to stay put. Those who are questioning whether it's for them or not just have other good alternatives now, which aren't lottery tickets. A startup can still be a conservative choice in this environment when considering the whole picture, which is what I felt was missing from the above. There are certainly many ways to be financially conservative right now.
The retail investors don’t have any desire when the stock market is tanking to buy stocks in money losing former unicorns. The investment bankers who organize the IPO also won’t see the initial “pop” that allows them to make a quick profit.
Of course the employees who sacrificed real compensation in cash or RSUs in a public company in lieu of statistically worthless “equity” come out on the short end as the companies repeatedly delay an IPO waiting for the “environment to improve”.
All this to say, if you want to be a founder, go for it. But unless the startup you are thinking about has enough funding to compensate you as an employee at market value in cash, skip it.