Husband wants to take a huge paycut to join a startup

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People, it's pretty clear that the OP knows nothing about the details of any of this. OTOH, it sounds like OP's husband knows what he's doing. I don't know why people keep responding to this thread. She's not coming back because she can't answer any of these detailed questions.

DP... the point of OP posting on here was to ask for advice. Some people have given some really good advice, especially those who have been exposed to startups. Maybe she's reading the responses and asking her DH about some of the things discussed on here. I know that's what I'd be doing. I'm a PP, and my DH worked for a startup, and I had the opporutnity as well. DH thinks OP has every right to be concerned. $600K salary is a huge deal, and he said he'd be seriously questioning the decision to quit and join a startup if his salary was this high. We both have worked in SV and have been exposed to lots of failed startups.

If they had maybe one young child, maybe the decision wouldn't that hard. But OP has three kids. That's a huge thing to consider.

+1

A $600k compensation package (presumably with a solid company) is nothing to walk away from based on a mid-life crisis urge - even if you're planned for it. I'd bet the vast majority of start up executives would switch places with the OP's husband for that kind of guaranteed income. If the OP's husband truly wants to check the box on a start-up, he might consider doing so when his kids are older and he can simply walk away into retirement if it doesn't work. While start up founders may worship youth (anyone under 45, and preferably under 35), investment firms value an executive who can safeguard and grow their money.

You could become an investor with some of your spare cash, sit on the board, and keep your day job.

Yep. I know several "angel investors" who ponied up $100k for local tech companies. However, they were screwed royally when PE/VC funds finally made their entrance.

How so?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People, it's pretty clear that the OP knows nothing about the details of any of this. OTOH, it sounds like OP's husband knows what he's doing. I don't know why people keep responding to this thread. She's not coming back because she can't answer any of these detailed questions.

DP... the point of OP posting on here was to ask for advice. Some people have given some really good advice, especially those who have been exposed to startups. Maybe she's reading the responses and asking her DH about some of the things discussed on here. I know that's what I'd be doing. I'm a PP, and my DH worked for a startup, and I had the opporutnity as well. DH thinks OP has every right to be concerned. $600K salary is a huge deal, and he said he'd be seriously questioning the decision to quit and join a startup if his salary was this high. We both have worked in SV and have been exposed to lots of failed startups.

If they had maybe one young child, maybe the decision wouldn't that hard. But OP has three kids. That's a huge thing to consider.

+1

A $600k compensation package (presumably with a solid company) is nothing to walk away from based on a mid-life crisis urge - even if you're planned for it. I'd bet the vast majority of start up executives would switch places with the OP's husband for that kind of guaranteed income. If the OP's husband truly wants to check the box on a start-up, he might consider doing so when his kids are older and he can simply walk away into retirement if it doesn't work. While start up founders may worship youth (anyone under 45, and preferably under 35), investment firms value an executive who can safeguard and grow their money.

This. My DH is currently at a start up, but making low 200’s. He took the risk because he’d love a big break or at least a sale that would net him a few years salary. He’s realistic though and would jump ship in a nanosecond for the type of comp OP’s husband already has.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People, it's pretty clear that the OP knows nothing about the details of any of this. OTOH, it sounds like OP's husband knows what he's doing. I don't know why people keep responding to this thread. She's not coming back because she can't answer any of these detailed questions.

DP... the point of OP posting on here was to ask for advice. Some people have given some really good advice, especially those who have been exposed to startups. Maybe she's reading the responses and asking her DH about some of the things discussed on here. I know that's what I'd be doing. I'm a PP, and my DH worked for a startup, and I had the opporutnity as well. DH thinks OP has every right to be concerned. $600K salary is a huge deal, and he said he'd be seriously questioning the decision to quit and join a startup if his salary was this high. We both have worked in SV and have been exposed to lots of failed startups.

If they had maybe one young child, maybe the decision wouldn't that hard. But OP has three kids. That's a huge thing to consider.

+1

A $600k compensation package (presumably with a solid company) is nothing to walk away from based on a mid-life crisis urge - even if you're planned for it. I'd bet the vast majority of start up executives would switch places with the OP's husband for that kind of guaranteed income. If the OP's husband truly wants to check the box on a start-up, he might consider doing so when his kids are older and he can simply walk away into retirement if it doesn't work. While start up founders may worship youth (anyone under 45, and preferably under 35), investment firms value an executive who can safeguard and grow their money.

You could become an investor with some of your spare cash, sit on the board, and keep your day job.

Yep. I know several "angel investors" who ponied up $100k for local tech companies. However, they were screwed royally when PE/VC funds finally made their entrance.

How so?

So they put up 100K in the seed round, and did not like the terms/valuation when a bigger play could put up $1m for Series A or B? I'd say they need to understand how startup funding works, and why early $ now is moving to preferred debt.

[Anonymous]

So they put up 100K in the seed round, and did not like the terms/valuation when a bigger play could put up $1m for Series A or B? I'd say they need to understand how startup funding works, and why early $ now is moving to preferred debt.[\quote]

When the VCs came in, they insisted on diluting out the seed money to prevent problems down the road. The founders, having long-spent the $100k and desperate for the VC money to "take them to the next level" were willing to sell out their early investors. The VCs weren't interested in a long-term relationship, but rather wanted to slap some lipstick on the pig and sell the company to a larger company in 2-3 years.