Ask HN: Should I switch companies?

Where are you living? You could easily make $120k in the Bay Area.

If the company is distributing profits rather than investing them in growth, then it is not a startup, it's a small business.

If the company is closely held, e.g. some sort of limited liability company or S-corp, then profits are often kept as small as possible unless otherwise dictated by an operating agreement among the stockholders.

For example, if revenue outpaces expenses by $120k, the stockholders can award themselves $100k in bonuses and the company's profit is $20k and you would see $2k at 10% instead of $12k [and there's nothing stopping the stockholders from awarding all $120k as bonuses in which case you would see nothing]. And that's just when they don't anticipate increased revenues. If they anticipate $120k greater revenue versus expenses next year the stockholders can give themselves $120k worth of raises.

If there's long term revenue streams, the stockholders can hire on family as consultants, enter the company into leasing agreements with companies that they own, and basically take anything that could be profit out of the company and it's all perfectly legal and common for closely held companies.

The reasons are that the tax situation of the stockholders of a closely held company is pretty much the same either way, but any assets of the company can be taken via lawsuit against it, while the personal assets of the owners are protected via limited liability.

None of this is to say that these things are necessarily running through the stockholder's minds. But not being a stockholder pretty much places any future revenue subject to the good will of the stockholders and it is not uncommon for people to make self interested choices when real money is involved.

BTW, being a minority stockholder doesn't really change much absent an operating agreement which governs the way in which profits, bonuses and salaries are determined and getting that is unlikely.

Good luck.

Well, on the one hand, you are at a unique the time of your life when you can invest your time into a startup (assuming you are single, and willing to eat some ramen). On the other hand, clearly you could be doing better, and any skills/experience/salary history you acquire now will put you in a very attractive position in a few years, and really will compound for the rest of your life.

I think you need to do some soul searching, and ask what is your motivation, what is your passion? Are you in this startup because you believe in it, think it can fly, and are willing to sacrifice a lot? Or are you there because you fell into it, they gave you a job, they're good guys, etc?

Other questions to ask are:

- What's your risk tolerance?

- Do you mean to have a family some day?

- How important is money to your situation?

- What would you value more: the experience of building something yourself, or the experience of working on a team?

An analytical way to look at this would be to compare the "net present value" of the future earnings from the two opportunities. Given that the startup has not raised any funding or revenue yet, and I don't hear you saying anything about how exciting it is, I'd have to guess you have more upside in the training and learnings from getting proper software development mentorship.