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The Portable CTO
Startups · Technology · Leadership
I've always put a big grain of salt next to any equity offers a startup gives. Here's a specific example of how someone owning 1% in a $100 million startup can end up with $0:
"When venture capitalists buy equity, they typically do not buy the same shares employees get, which are common shares. They buy preferred shares....There are all sorts of reasons this is so, including the obligation VCs have to protect the downside of investing the money they get from their Limited Partners.

There are also some advantages to common shareholders by having two classes of stock — for example, this allows the company to price your common stock options at less than what the VCs pay because they have different attributes and, therefore, different values.

The principal benefit of preferred shares for those who own them is that they get their money out first if the company is sold. While common practice is they get the same out that they put in, it is not unheard of for some of that money to carry a multiple, 2x or even more."
These kinds of funding details are critical to evaluating the true value of equity. If you're foregoing a significant portion of your salary in order to take equity, be aware of this, and talk to a good lawyer while you're at it.
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"Startups that are 'temporarily' using VC money to subsidize negative contribution margins must always have anxiety about the true quality of their product-market fit and eventual market size. Would they still have a big business if they raised prices to a sustainable level?"
A useful list if you're looking for business model ideas, or you're considering a pivot.
"While rising education costs and more amenities and luxury housing have played a role in pressing up the cost of college attendance, a great deal of college tuition inflation has been driven by an enrollment strategy that relies heavily on tuition discounting."
"All state schools will dedicate around an hour a week to sustainability and climate change issues from the beginning of the next academic year."
"If you find yourself entering a new career in tech after the age of 30 you will find very few hiring managers open to the idea of filling their small number of entry level roles with someone of your…let’s just say it — AGE!"
GitHub is the latest in a string of tech companies being criticized by their employees for working with contentious government agencies. As politically-aware tech workers have more leverage in a competitive employment environment, I wouldn't be surprised to see these kinds of stories more often.
"Individuals receiving pension benefits were experiencing much more rapid mental decline than their counterparts still on the workforce...Overall, the results support the hypothesis that decreased mental activity accelerates cognitive decline."
"White workers have relied on their educational and economic privileges to build disproportionate advantages in the educational pipeline and the workforce. Black and Latino workers, on the other hand, have strived to overcome discrimination, racism, and other injustices that continue to perpetuate earnings inequality."
Two New Scraping Tools 🛠
Want to collect data from a website that doesn't have an API? I ran across two new tools this week: ScrapingBee and Simple Scraper. Give them a try and let me know what works for you!
Personal Updates
I'm starting a podcast marketing campaign to promote CFP Land. My goal is to get on as a guest of 10 podcasts in the next three months, so if you know of any developer podcasts that are looking for guests, please send them my way. Thanks in advance!
Karl Hughes
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