Analyzing AngelList Job Postings, Part 2: Salary and Equity Benchmarks

http://codingvc.com/analyzing-angellist-job-postings-part-2-salary-and-equity-benchmarks

by lpolovets • 12 years ago

98 69 12 years ago

angersock4• 12 years ago

Goddamnit do I hate this city sometimes. Considering stapling this to the face of the next person in Houston that bitches about not being able to find engineering talent.

EDIT:

I lost two really good potential hires once they passed the tech interview and then we decided we couldn't pay them...which is fine initially, but if we can't shed that mindset when our next round closes, I will be sad (and likely available).

If only there was some kind of proxy for salaries, some sort of thing we could offer in lieu of payment to potential employees, some kind of asset whose ownership we could offer with the expectation it'd be worth more later. Man, what a thing that could be.

walshemj2• 12 years ago

Should you have not worked out if you could afforded to hire some one before doing the interviews?

angersock4• 12 years ago

So, hiring was possible, especially if people are willing to give away proper equity. At this point, I know what my next asking price, were it an employee position, would be--and sure, I expect haggling. The problem was that the fit wasn't good enough (for a few different reasons) to justify making it happen.

There's a lot involved in hiring--not just technical aptitude, not just "does this person work with your engineering team?", not just "do we runway for this person?". There's also "does this person work with everyone in the company?", "do we value this person enough to give up equity to manage the salary differential?", "do we really need this person's skillset right now, or can we get by?" and many others.

If I had my druthers, we'd hemorrhage out equity and cash to hire the best--the very best--and retain them by working on inspiring projects and helping them grow and help others grow into the best engineers the world has seen since Bell Labs in the mid 70s. Life is too fucking short not to focus on building awesome things with awesome people.

Alas, that's kind of what Apple tried in the late 80s, early 90s, and it basically cost them the company until they were finally able to pay NeXT to acquire them.

There are sad, annoying practicalities in running a business, and sometimes that changes hiring practices from the ideal. :(

EDIT:

The real issue is that the Internet has made it trivial to look at greener grass everywhere, and see how raw a deal one might be getting. Not good for morale, even at decent firms (such as mine).

Worse, it means that hiring from local good schools is a pain in the ass because the graduates are all tuned to Google or Facebook or {{latestFundedSVStartup.compPackage}}. Unless you make it clear to them in an interview that no, they aren't actually worth 80k unless they can hit the ground running, they'll just say "lol, whatevs, I'll go elsewehre". Whether or not they get hired there is not important...I probably won't see them again (even with prodding from emails).

We'll never see the true fallout of that side of the bubble, I think, but I suspect it's pretty rough.

EDIT2:

Just to clear up any misunderstandings: I'm the first engineering hire here, so while I handle a lot of team stuff and whatnot, final hiring authority does not rest with me. I'm not the one deciding whether we can afford a new hire--I just try to find good ones and get them interested.

EDIT3:

Removed "and genuinely do not deserve their asking price" from bit about students. Deserve was wrong word to use--better phrasing would've been "their asking price is based on a market which is not ours".

The problem being, of course, that the standard reference market is SV as popularized by HN and other channels, not whatever their local market is.

vonmoltke2• 12 years ago

Considering stapling this to the face of the next person in Houston that bitches about not being able to find engineering talent.

What kind of work do you do? I work for a non-enterprise Java shop (NLP) up in Dallas. We have trouble finding people worth interviewing, but since I started 2.5 years ago have only had one offer extended and rejected.

EDIT: On the flip side, I have had major trouble trying to get places in Dallas, Austin, and Houston to even talk to me when I have been looking. It took me two years to get what I have now, and my testing of the market recently has been met with silence.

danielweber4• 12 years ago

I'm looking for a full-time position, in/from a top-20 (but not top-5) city, and experience the complete fuckup of software recruiting weekly.

Voodoo and witchcraft. That's the state of the art in software interviewing.

arenaninja2• 12 years ago

A question I genuinely have is whether these figures are something to go by or only relevant if you're in SF/SV, and I suspect it's the latter. It would be nice to work out a scale to more-or-less approximate how far these numbers take you in other cities (though I suppose you could just use a cost-of-living calculator, but there are other considerations in tech IMO).

But even adjusting for the cost of living, I'm glad I see figures like this because it shows how ridiculous some offers are. I got an invitation to apply in Los Angeles last week for webdev, with the bottom set at $40k and the max set at $70k

jboggan• 12 years ago

LA is cheaper to live in than San Francisco but it's not that much cheaper. Silicon Beach in particular (Santa Monica/Venice area) has been experiencing some pretty steep rent inflation in the last two years. Even $70k isn't that much to thrive on in Los Angeles.

I would love to see some sort of cost-of-living analysis that didn't just look at average costs of housing and food but also incorporated some mental measure of "being well-off" that used the area's Gini coefficient [0]. I say this because I have lived frugally in Santa Monica, CA and I have lived frugally in Atlanta, GA at approximately the same standard of living but being surrounded by conspicuous outliers definitely made me feel much poorer in Santa Monica. See [1] for academic discussion.

[0] http://en.wikipedia.org/wiki/Gini_coefficient [1] - http://www.ncbi.nlm.nih.gov/pubmed/20503742

lpolovets2• 12 years ago

(I'm the post's author.)

This analysis is not hard to do for a specific job. If you're looking at a job at a 10-person startup in LA, go to AngelList and look up job postings at 5-10 other LA startups that are a similar size. You'll get a great sense of what a typical offer looks like, and then you can compare that to your own offer.

arenaninja2• 12 years ago

Hey, thanks! I was about to start fishing for the data myself, I thought it might come from some API. Definitely some interesting insights, particularly from your previous submission on the same topic (which sadly didn't make front page), that shows the declining popularity of PHP among startups. Definitely going to slice the data myself, thanks!

malvosenior• 12 years ago

These numbers actually seem on the low side for SF/SV. You can definitely get this outside of the valley. Switch to remote work if none of the local companies will pay this. Really it's only a matter of time until they'll have to step up and pay market rates if they want to hire ANYONE let alone someone good.

optimiz33• 12 years ago

If you're a halfway decent engineer, you can make north of 180k/yr at Google/MSFT/Facebook. You can also do this in a market like Seattle where there is no income tax.

Serious question, who in their right mind would take a paltry 1.5% equity and <= 130k/yr for these salary numbers at the level of talent these startups are seeking?

opendais4• 12 years ago

People Google/MSFT/Facebook won't hire. People who wouldn't want to work at #LargeCorp.

optimiz33• 12 years ago

I suspect this is a small demographic - chances are startups don't want to hire people that wouldn't make it through a Google/MSFT/Facebook tech-screen.

The people who would make it through are going to demand founder-level equity to compensate for the risk associated with the lack of money being offered.

lpolovets2• 12 years ago

I worked at MSFT and GOOG, and also joined two startups when they were ~15 people. Google and Microsoft pay well and have great perks. Startups can't really compete with that. However, at a startup 1) people tend to learn a lot more and learn it faster, 2) people are closer on a personal level, 3) people usually have a lot more impact, 4) there's much less bureaucracy, etc.

At this point, if I really needed money, I'd try to go back to Google, but if $120k was sufficient -- and it's more than sufficient for most people -- I'd prefer to work at a startup. Even if the equity is worth nothing, it can be a wonderful experience.

scarmig• 12 years ago

Serious question: is 180k base now actually the going rate at G/MS/FB for a mid-career engineer?

optimiz33• 12 years ago

It was several years ago, I'm assuming the market has only strengthened.

steven7774002• 12 years ago

I have 10-15 years of experience and my base offer from MSFT (Bellevue) was $110k/year.

patio113• 12 years ago

Ask a simple question, get a simple answer: yes.

rhc2104• 12 years ago

The parent comment didn't say over 180k base, he/she said over 180k.

Google and Facebook (and some other companies) have upped the ante in compensation by offering lots of (liquid) stock.

patio113• 12 years ago

Startups get to pick their answer for this question, or die.

One option is to develop sources of talent which Google's hiring process doesn't reach. They are helped in this by the fact that Google's hiring process is, as has been widely reported, a disaster.

Another option is telling folks that working at a startup with not be like working at BigCo. This is sometimes explained using some or all of: you'll be part of the family, work on things that directly impact users, learn quickly about a wide variety of topics rather than getting to be the world's leading expert in configuring BigCo's proprietary form generator and then repeating that every two weeks for the rest of your career, get to live an extended adolescence during your tenure there (foosballs and drinking and laundry taken care of for you!), etc.

blazespin• 12 years ago

Simple answers, all startups are born not equal. When you take a job at one (assuming you're talented and can work at a Google) you are looking at the particular poker hand that startup has been dealt. Some are worth 1.5%/130K per year, some are not.

If you can't read poker hands like that, you are pretty screwed no matter what.

Iftheshoefits2• 12 years ago

You don't have to work at any of those places to earn a better deal than what these startups offer. I certainly don't work at those places, and it's unlikely I ever will for a variety of reasons, and I'd be taking a steep (> 15%) pay cut to work for $130K/yr. Compared with my current salary, any equity would have to be worth at least approximately $25K/yr (before any discounts against the lost income are applied, so it's a low figure). At 1.5% equity, that's a valuation of about $2M/yr for the startup. That's not a lot compared to the exits these companies may make, but it's not insubstantial, either, and is probably an aggressively optimistic estimate given the preference for investors, dilution, etc.

rgovind2• 12 years ago

Is this figure including bonus and stock? In either case, even if you are decent engineer, I think getting in is troublesome...although not tough.

I believe lots of times, interviewers are not judging the candidates right...so getting in becomes tough.

argonaut2• 12 years ago

I personally know someone who has worked at a company for the past 3 years, making ~100k base for <1% equity (4 year vesting). When he joined the company, everyone knew it would IPO in a few years. The company recently IPOed. He made the equivalent of $400k/year (base + 3 year vesting of equity), which is AFAIK more than what his friends who went to Google/FB/etc. make.

Of course, this involved taking on a small risk that the company would not end up IPOing. But everyone in the industry knew it was on its way up, and the company was already mid-sized when he joined.

itchyouch• 12 years ago

Sounds like Twitter.

danielweber4• 12 years ago

Glassdoor doesn't have Microsoft paying that much in Bellevue (I chose Bellevue because of other guy in the thread). Here they are sorted high to low:

http://www.glassdoor.com/Salaries/software-engineer-microsof...

I suspect so many salary numbers I hear on the street are bullshit, either designed to get me lower my price or raise my price against my best interest.

virmundi• 12 years ago

Perhaps someone who never wants to work at those companies. I presently am trying to start my own company. I make $0 a year. Still, I'd rather work at Liberty Mutual than at Google/MSFT/FB. There is an ethos for those companies that I just don't like. I'd feel slimy working there. I know they make some interesting products, and employ smart people, but they feel like they are exploitive even at their salaries, especially with the H1B visa shit they're pulling.

ambrood• 12 years ago

Can the self reported figures by companies on angel list really be trusted? From personal experience companies (YC backed no less) inflate the equity offering on angel list!

msoad• 12 years ago

Startup jobs after they raise series A are more of a fraud than a realistic job positing.

rgovind2• 12 years ago

Can you please elaborate on this?

owyn• 12 years ago

Not the original commenter, but I'd say... Imagine you've been given some VC and you are in the Bay Area and you have to compete for hiring with large established/stable companies, and you only have a year or two of runway to build your product. You're going to pay well for good engineers. So this creates an artificially inflated market for engineering talent that doesn't necessarily translate to other areas or countries that don't have the same injection of VC capital (you could also call this "desperation" or a "labor friendly" market). There are definitely enough engineers here who are willing to take the gamble of salary vs equity to keep the startup companies bootstrapping, but increasingly I've met more people who want salary and stability, and that may be due to the increasing expense of living in this place. So, the spiral continues.

jacalata• 12 years ago

I recently interviewed at a startup that also happened to have a job posting on AngelList at the time, and the salary/equity offer they gave me was actually below the range proposed on the AngelList posting (I hadn't applied through that posting). When I brought this up their HR contact attempted to explain that the posting was meant to be for a Senior Engineer, which I'm not...presumably hoping I hadn't noticed that they had a separate posting up with an even higher salary range titled "Senior Engineer". I declined their offer, but the negotiation was a very valuable learning experience (as in, I did everything wrong starting by being the first one to give a number, and learned not to do that!)

elmyraduff• 12 years ago

I read a lot of salary-related articles and discussions(due to my startup) and I've seen many examples like yours. This is nothing other than a click-bait scam. It is very unfortunate. You think upfront-listed salaries are a way of eliminate unmet expectations during the interview process. And all you get is companies listing high salaries to attract the top talent and then not honoring the promise.

7Figures2Commas• 12 years ago

Don't be so negative. They'll pay you $1xx,000/year...once they raise funding in 3 months.

In all seriousness, I'm not sure why so many people assume that the salaries posted on AngelList should be taken at face value. With minimal due diligence, it's clear that a lot of the startups are unlikely to have enough funding or traction (in the form of revenue) to support the salaries that they purport to be offering. As you pointed out, they're just trying to get warm bodies through the door and hoping a few of them will drink the kool-aid.

danielweber4• 12 years ago

I was talking with a start-up with two founders, and they wanted me as their first employee to work for free for 3 months, in exchange for 1% of equity.

I told them that offer had poisoned any further conversation.

jurassic• 12 years ago

I recently went through a very similar ordeal. After kicking ass for two out of three months of contract-to-hire gig, the company said they loved my work and wanted to end the contract early. Awesome. Then they dropped a full time offer for 20% less than the minimum they advertised on Angelist, well below the market. When I tried to negotiate towards something more reasonable, they pulled that same line about the range being for a very senior dev and were resistant to negotiation, even though the advertised range is big enough to fly a jetliner through and they clearly know that no self-respecting senior dev would work for the bottom half of the advertised range. They just closed a huge round and could have paid more, but chose not to.

I ultimately declined their final offer which they seemed pretty surprised by. It's hard not to take personally after working there and proving my value for two months. Instead of a bum offer from a company I just met, which is no big deal, it really felt like people I thought were my friends were trying to take advantage of the situation. I probably will never do another contract-to-hire. I'm not interested in companies with a try-before-they-buy feeling about candidates, because I think it belies an unwillingness to value and respect the work of talented hard-working technical people.

I made some money and got valuable life experience from it, but I'm still sad about how it went down. There's enough credible salary information out there that companies are really doing everyone a disservice by pulling an extreme lowball on a candidate they want.

eli• 12 years ago

AngelList weirdly doesn't let you list a job that offers zero equity, so any jobs in the minimum range might actually be pure salary.

bjoernlasseh2• 12 years ago

We are currently doing a survey to get more detailed data on Salaries for engineers & co. If you have a few minutes please help and contribute :)! http://blog.startupcompass.co/

danielweber4• 12 years ago

You want me to fill out a survey about my salary, using my work email, and will then send the results to my work email.

I'm missing something.

bjoernlasseh2• 12 years ago

lol, great point - fixed that

coldcode• 12 years ago

The question I find more interesting is what % of people in the early stages mentioned here ever collect on their equity?

walshemj2• 12 years ago

You would need to measure that against what stock options are worth at a big stable company FTSE 100 DOW or S&P 500

For example in the UK BT's latest 5 year share save returned over £70k tax free - and that is open to every one.

Blackthorn• 12 years ago

I remember taking a glance at AngelList about a month ago and having a good laugh at how badly lowballed all of the salaries on it were. Hope they get better in the future.

biggerbox• 12 years ago

Does anyone know what typical equity grants translate into on average. I.E. 1% typically will payout in the range of y to z, etc.

melvinmt• 12 years ago

" If the founder gives away 10% more than they should to the first 10 employees, then that's 10% less that's available for fundraising and future equity grants -- and that might break the company."

This is not how stocks work. Exceptions aside, every previous round gets diluted by the next round where the 10% eventually becomes 1%. Also, not every employee will stay on for 4 years to vest their stock options completely.

You do have the risk to burn through your allocated employee stock option pool if you're too generous (this is the point after which the investors and founders start to dilute their shares).

joshkpeterson• 12 years ago

FWIW, Robert Half's salary calculator for Seattle gives the following salary hierarchy (their job titles, not mine):

Web Designer < Web Developer < Software Developer < Software Engineer

There is some overlap between Software Dev & Eng with PM's and Senior Web Dev.

http://www.roberthalf.com/technology/it-salary-center?lobId=...

Analyzing AngelList Job Postings, Part 2: Salary and Equity Benchmarks

Related Stories