Total Compensation in Silicon Valley: It's More Than Just a Paycheck
MYTH: Silicon Valley is where 22-year-old nerds in Gap hoodies make major bank overnight, then go out and buy yachts and posh mansions in Palo Alto.
REALITY: Uhhhh, not so much.
If you believe everything you read in the news or see on TV, you might think that working at a hot startup in Silicon Valley is your instant ticket to riches. Regardless of what Hollywood has managed to cook up in movies like The Social Network and TV shows like Silicon Valley (natch), however, the real world of startup employment is quite a bit different. As in: Long hours for sometimes (nay, often) crummy short-term pay (or even no pay at all!) as a trade-off for the chance to make big bucks down the line in the form of company equity if your startup employer turns out to be the next Facebook or Google.
But while the chance for startup riches definitely exists, the hard reality is that most startups don't become the next Facebook. Many startups don't even get acquired in an modest equity-cashout deals. In fact, a lot of startups outright fail, leaving talented people with little to show for their long hours and lost sleep besides a worthless equity agreement. Bottom line, if you're not independently wealthy, it's usually not a good idea to work under an equity-only pay agreement---unless you are willing to live in your parents' basement while eating government cheese. Sure, it might have worked out for the Woz, but much like winning the lottery, an Apple-style founders' payoff is a mega-long shot for most people.
Sounds depressing, huh? Don't fret, because there's a silver lining for talented tech workers. If you're smart enough to work in Silicon Valley---or any tech company, for that matter---then you're smart enough to be strategic about your compensation. If you're better informed about what top talent should be demanding from companies when negotiating your total compensation package, you're also more likely to pick a startup outfit that has the staying power to keep you working (and paid) well over the long term, especially in terms of potential equity cashout. And if by chance your employer crashes and burns, negotiating a solid base pa