Wealthfront Blog

I have found [Wealthfront](https://blog.wealthfront.com) to have a lot of good resources on their blog. And Robinhood has a nice section on [intro to economics](https://learn.robinhood.com) which is public.

Wealthfront used to have a great compensation estimation tool: https://blog.wealthfront.com/startup-employee-equity-compensation/ But it was mysteriously deleted without reason.

I am neither an accountant or lawyer, but this may help: https://blog.wealthfront.com/exercise-stock-options-taxes/ I can't speak for ESOFund, or similar companies, as I have never used them. My best recommendation would be to talk to a tax accountant and explore your options. You may also consider a secondary market sale now if you are allowed by your company.

I think you really have to put it in context. There are companies that are objectively "pre IPO". That's no guarantee, but it's a probability. So you can start to make educated guesses at Expected Value. If you're joining as the 5th or 50th guy, your options are probably a long-shot and they're not really worth considering. But if you're joining a pre-IPO company i suggest that you minimize salary and maximize options. There are a lot of great outcomes in the $50-250k/year range in option value. It's no lotto ticket, more like an extra salary in addition to your base salary. And it's tax advantaged! https://blog.wealthfront.com/college-vs-retirement-savings-silicon-val…

According to Andy Rachleff, a General Partner at Benchmark (top tier VC firm), usually the startup first to product market fit is worth significantly more that all its competitors combined. Assuming this is true, the OP's "competition destroying big hits" thesis is incorrect. Source: https://blog.wealthfront.com/demystifying-venture-capital-economics-pa…

Andy Rachleff has great advice on people looking to start a career in startups: Don't make a brand-new startup your first job--rather, look for a mid-sized, growing company, where you'll learn some valuable skills and set yourself up for better opportunities in the future. https://blog.wealthfront.com/hot-mid-size-silicon-valley-companies/ The list is getting a bit out of date, and he's writing for business students, but I think the advice is very sound for engineers as well. If I could do it over again, I would have tried to find a similar path.

Great market salary info: https://blog.wealthfront.com/startup-employee-equity-compensation/

Amplitude Analytics | San Francisco, CA (SOMA) | https://amplitude.com | ONSITE We help companies build better products by providing analytics for understanding user behavior. We believe that the future of product development is in smart, easy-to-use analytics that helps you make good decisions and invest in the right areas. We're a 300-person company (40 engineers), and we raised our Series D in 2018. We've gotten incredible traction helping customers like Square, Atlassian, Dropbox, Twitter, Twitch, and Capital One change the way they build products. We were recognized in Wealthfront's Career-Launching Companies (https://blog.wealthfront.com/career-launching-companies-list/) and Forbes' Cloud 100 (https://www.forbes.com/cloud100/list/). We have many open positions that can be found here (we're growing fast!): https://boards.greenhouse.io/amplitude. In particular, we're looking to expand the engineering team with the following positions: * Engineer Manager, Product Engineering * Senior/Staff Product Engineer (React) * Staff DevSecOps Engineer * Senior Data Scientist - Causal Inference * Senior/Staff Software Engineer, Infrastructure Our tech stack consists of Java, Python, Redis, Kafka, PostgreSQL, Elasticsearch, Docker, SaltStack, Terraform, Kubernetes on the backend and JavaScript, React, Redux, Flow, Highcharts, d3 on the frontend. We've got a number of challenging technical problems to solve thanks to being in the analytics space, and we're looking for people…

Grand Rounds | Lead Front-End Engineer | San Francisco, CA USA | https://www.grandrounds.com Grand Rounds[1] was recently named Best Digital Health Company to Work For[2] by Rock Health, and is currently recognized by Glassdoor's as the #2 Best Places to Work[3]. We are also represented on Wealthfront's Career Launching Companies[4] for the second year in a row and are looking for talented Software Engineers to join our mission. For this particular opening, we're looking for an experienced React Engineer to join our growing team. You'll leverage your skills in a fast pace environment to help us deliver the next generation of our mobile applications as well as be a key contributor in the standardization of front end components and application services. We're building on the modern ecosystem of JavaScript technologies. You'll be immersed with ReactJS, ReactNative, Redux, GraphQL, Jest, Yarn, and will have the autonomy to help shape the toolchain. The team you'll join is comprised of 3 other software engineers, a test engineer, product manager, designer, and a UX/UI researcher. We have clear business goals to achieve. The ideal candidate will have led in the development of a JavaScript application at scale. You'll mastered JavaScript long ago, knowing the pitfalls of asynchronous javascript, and know how to leverage modern standards to avoid them. You'll evangelize importance of encapsulation, separation of concerns and other best practices that lead to building…

> Background: this is my first job out of college, and I joined the startup ~9 months ago, right when they launched (I'm engineer #2, before me, the founders outsourced the prototype to an offshore team). Generally, but never as a rule, purely non-technical founders and an outsourcing is a red flag. But again, that is never a rule, and there are plenty of good companies started by non-technical founders that later matured. Still, that does leave you with the question, of how they chose the CTO? > Right now, we have ~1200 registered user, with about 100 active users, and we gained about ~100 users/month. This is not a useful metric. How does this translate into revenue: for some kind of business software (e.g., optimization/recommendations for retailers provided as a service and based on subscription fees) this is great, for a destination site that is poor. Is this rate increasing or increasing? Now to the meat of your argument: "waterfall" -- why do you call it water fall? 1 hour standups _are_ a problem, but I could imagine a scenario where this might occur for a few days in a row (although never beyond that). "Deployment update every 4-5 weeks" -- depends on what goes into the update, although it's hard to imagine this being a normal stable-state rate for an early stage (or any Internet/SaaS) company; yet for a company providing something like a database a service, it could be fine (provided you're able to push quick fixes and UI updates faster). "I tried to write…

Wealthfront’s announcement: https://blog.wealthfront.com/wealthfront-has-agreed-to-be-acquired-by-…

From their blog post (https://blog.wealthfront.com/announcing-2020-career-launching-companie… "To qualify for our list of mid-sized companies with momentum, a company must be US-based, privately held, have a revenue run rate by year end of between $20 million and $300 million, be on a trajectory to grow at a rate in excess of 50% for at least the next three or four years, and have compelling unit economics."

I'm seeing a surprising number of comments describing catastrophic tax outcomes due to exercising options with a large spread and holding the stock long enough for it to tank before selling, while still being stuck with a massive tax bill. This situation is easily avoided by filing your 83b and early exercising your options immediately, or at least before a subsequent funding round/term sheet valuation cycle. None of the comments describing those outcomes mention this. For those reading and new to the startup game, read up on the 83b. When you're an early employee at a startup, the cost of early-exercising even a substantial number of shares is often not cost-prohibitive. And should you leave the company before it all vests, you get a check for the unvested remains. It's a NO-BRAINER when the exercise cost is small. https://blog.wealthfront.com/always-file-your-83b/

How was your lockup agreement phrased? If it's something like this one (https://blog.wealthfront.com/post-ipo-dilemma-hedging-stock/), where you have clauses like " enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or such other securities" exist, I agree using as loan collateral is pushing the limits, if not past it. Many companies have much simpler language. Mine was just "will not sell or otherwise dispose of shares", which permits not only loans, but more powerful techniques like hedging.

Blogspam of https://blog.wealthfront.com/2018-wealthfront-career-launching-compani…

Related: https://blog.wealthfront.com/sell-employee-stock/ TLDR: "When should you sell company stock? As soon as possible."

Are you getting stock or options? Because the 83b election applies to grants of stock, not options. If options, then I've only ever heard of doing an 83b election in concert with early exercise, so that you are effectively making the election on a stock grant. I'm not sure whether you can choose to do within 30 days of every tranch of vesting. I've never heard of this, but I'd be interested to know whether this is actually possible. [1] https://blog.wealthfront.com/always-file-your-83b/

There have been a lot of rules of thumb over the years. 50/50 and 60/40 used to be common advice, no matter the age of the investor. When modern portfolio theory became influential, the "age in bonds" rule of thumb became common. Now some people, e.g. Burton Malkiel and others who are involved with the robo-investing companies, say that young people don't need bonds at all, and that high-dividend blue chip stocks can be a good substitute: https://blog.wealthfront.com/investor-bond-market/ There's no simple answer. There might be a right answer, but so far no consensus view has lasted for long. Most of the arguments I've seen have been heavily dependent on bond yields at the time the arguments were made, and are therefore not universal advice. For example, 50/50 made a lot more sense when treasury bonds were paying more than 7% per year.

Wealthfront states it more clearly here: https://blog.wealthfront.com/qualified-small-business-stock-2016/ It’s a major benefit if you have the opportunity to early exercise your shares.

About one third of managers beat the market. The problem is that there is no correlation between year-to-year performance of managers: the manager who beat the market this year is no more likely to beat it next year than any other manager. https://blog.wealthfront.com/illusion-stock-picking-skill/

None of this is "news", just another re-hashing of "yet another explanation of how VC works, because VC's will never admit their mode plainly". Here ya go: https://blog.wealthfront.com/venture-capital-economics/ https://blog.wealthfront.com/venture-capital-economics-part-2/ https://medium.com/startup-grind/technology-due-diligence-or-lack-ther… EDIT: Just re-read, makes sense why this is "news"... "I recently had a meeting...talking about the macro view of venture capital and how it doesn’t actually make sense....It took me a while to understand what this really means."

This is only true for small amounts of money. Instead of using a single ETF or Index Fund to invest in U.S. stocks, Wealthfront's Tax-Optimized Direct Indexing directly purchases up to 1,001 individual securities on your behalf — up to 1,000 stocks from the S&P 500® and S&P 1500® Indices and an ETF of much smaller companies. From Wealthfront's website: https://blog.wealthfront.com/introducing-direct-indexing/ Analysis from bogleheads: https://www.bogleheads.org/forum/viewtopic.php?t=152903

As stated before, it doesn't work that way. Google the horror stories on those who have excercised options (and held the stock) on a liquidity event who had to pay taxes on gains that existed at the time of the transaction, but later dropped in value. Even though they never saw a gain other than on paper, they get hit with a tax bill they can no longer afford. And the stock is unhelpful because it's current market value is no longer reflective of what it was at the time the IRS recognizes the gain. In your scenario, she could only cover her tax bill with the stock if it were at a equal or higher value as when she excercized them via the loan: https://blog.wealthfront.com/exercise-stock-options-taxes/

The one reason not mentioned here that may tilt it in favor of a C-Corp is if you anticipate that your company will likely be bought at some point (i.e. strong market interest). When you incorporate as a C-Corp (or convert to one), the clock for a QSBS exemption starts ticking (see: https://blog.wealthfront.com/qualified-small-business-stock-2016/) The QSBS exemption can make your first $10M free of federal tax, and so is a very nice benefit. There is no QSBS exemption for an LLC - you will have to convert to a C-Corp, and the clock starts ticking on conversion.

Sorry, but you are spreading dangerous misinformation. https://blog.wealthfront.com/exercise-stock-options-taxes/

I believe the parent is referring to Qualified Small Business Stock. New issues of stock (meeting certain requirements: certain date ranges, company must be valued at less than $50M, keep all it's assets in "productive" investments, not passive such as real estate or other stock) can be completely excluded from long term capital gains tax. https://blog.wealthfront.com/qualified-small-business-stock/ has a nice summary.

Wealthfront article mentioned (i think) https://blog.wealthfront.com/college-vs-retirement-savings-silicon-val…

http://web.mit.edu/tytso/www/OPTIONS-HOWTO/OPTIONS-HOWTO.html https://news.ycombinator.com/item?id=2623777 https://news.ycombinator.com/item?id=10020063 https://blog.wealthfront.com/stock-options-14-crucial-questions/

Both are true. (Generally) The percentage of equity dedicated to ESOP is fixed unless the board has a good reason to change it. Since increasing the ESOP causes dilution, it would be hard to argue for an increase just to hire a single employee. However, some dilution can be good for everyone. Wealthfront and others have described such a plan: https://blog.wealthfront.com/the-right-way-to-grant-equity-to-your-emp…

Here's a much better post on this topic from the folks at Wealthfront: https://blog.wealthfront.com/always-file-your-83b/