The confusing part is that salary and stock get mixed up, but in a public company the stocks effectively cash and can basically be considered salary, unlike illiquid equity.

I don’t know where you’re from, but in SF amongst my circles, senior engineer market rate is about 300-500k but most startups will only pay 150-225k salary so that’s a huge pay cut. However, the base salaries are same, but you can pay your rent, mortgage, or student loans with the public company RSUs.

That’s why it’s bullshit when employees get told they get common shares while investors get preferred because employees take salary and therefore less risk. If you’re walking away from 200k per year of public stock that you could instantly sell on the public market and buy real estate with, you are in fact taking a huge risk and a pay cut. Trying to pretend like you’re not and that the startup is paying a “competitive salary” is a sleight of hand used in 2020 to fool naive engineers.

Reasons to work at a startup.

1. Level up your career / role flexibility. 2. Big companies suck (but [big] startups can suck too). 3. Burning idea you want to get done / tech is interesting. 4. Lottery tickets (options).

This is definitely going to be a debate depending on what market you're looking at. But I don't think it's up for debate that if someone is leaving a FAANG position to join a start up, or debating between the two options, that they are taking a non-trivial pay-cut for the start-up.

Yeah, absolutely. My FAANG offers were ~2x what my startup offers were.

Maybe at super early stage startups where you get at least one percent of the company (if not more). At older startups you should see base salaries that are reasonably competitive with public company salaries: not everyone makes Google money, but you shouldn’t have much trouble getting what you’re worth elsewhere until you cross $200k or so.

The big difference is that the publicly traded companies can pay RSUs worth money NOW.

At this moment in time, $200k total comp at a Bay Area FAANG is roughly... an engineer 1-2 year out of university.

Given that so many of the hot startups are in the Bay, I'd say only fresh college grads are looking at remotely similar comp between the two. Everyone else is playing the options lottery.

Not really a myth, more of a way to underpay people who aren't in the know. Another facet of the "old boys club".

>none of us had to sacrifice competitive salaries for stock options.

Does this map to reality? Are you saying that if you were at Google making 250K in TC the Startups were paying you 250K Base salary + stock options? That seems ludicrous.

> I wonder how common it actually is for people to take significant paycuts in 2020 for a startup opportunity (founders aside)

I think it's still super common in general, although perhaps not in the bay area.

If you didn’t take a pay cut going in, you were underpaid to start. Or you were very junior, so the disparity is narrower.

There are no competitively paid senior+ swes that keep their comp going to a startup. Full stop.

Illiquid equity makes a significant difference too. We’re talking total realizable dollars earned in a year.

It’s worth noting that I’m not saying this is fundamentally broken - that’s just the design of the system.

I’m surprised to hear this- my startup offers (YC companies) were typically half of what my FAANG offers were.