More ownership/authority/responsibility over the tech stack means more flexibility and opportunity to shift rapidly when necessary (lots of tech debt potential, though).
Smaller teams make communication more efficient.
Cons:
Compensation is generally terrible. We might expect lower base/cash compensation, but total comp (cash, equity, benefits) is also much lower.
The equity portion of compensation is extremely lopsided in favor of the founders and investors. Early employees are taking almost as much risk as founders. It's a different risk, but mainly in kind and less so in degree. There are no good reasons for the parsimonious grant percentages, the terrible vesting schedules, or the lack of protection against dilution.
Startups won't compete on this, and so when they complain about a shortage of willing workers it looks like they don't understand or care about really basic human relationships.
The fix for this is straightforward: pay larger cash salaries and offer more attractive equity (shorter vesting, more RSUs versus options) and better protection against dilution. A 0.5% equity grant should not mean "0.5% (for now)".
> Early employees are taking almost as much risk as founders.
Why do you say almost? I'd say most of them are taking more, as most of them won't have a seat at the board, IOW they have less control over the direction of the company.
Good points! Most of the time, though, employees draw a (slightly) bigger salary than the founders, at least until real funding (Series A or B) is obtained. Then unless the company changes its compensation model the balance definitely and clearly shifts: employees are taking bigger risks.
More ownership/authority/responsibility over the tech stack means more flexibility and opportunity to shift rapidly when necessary (lots of tech debt potential, though).
Smaller teams make communication more efficient.
Cons:
Compensation is generally terrible. We might expect lower base/cash compensation, but total comp (cash, equity, benefits) is also much lower.
The equity portion of compensation is extremely lopsided in favor of the founders and investors. Early employees are taking almost as much risk as founders. It's a different risk, but mainly in kind and less so in degree. There are no good reasons for the parsimonious grant percentages, the terrible vesting schedules, or the lack of protection against dilution.
Startups won't compete on this, and so when they complain about a shortage of willing workers it looks like they don't understand or care about really basic human relationships.
The fix for this is straightforward: pay larger cash salaries and offer more attractive equity (shorter vesting, more RSUs versus options) and better protection against dilution. A 0.5% equity grant should not mean "0.5% (for now)".