[LRUG] Chat Digest, Vol 78, Issue 18

[Aditya Tandon]

BBC is looking for tester  and Senior Software Engineer . If you are looking
for job . Kndly reply me .


On 11/07/2012 10:53, "chat-request at lists.lrug.org"
<chat-request at lists.lrug.org> wrote:

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> Today's Topics:
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>    1. Re: [JOBS] Ruby developer for new startup (Sidu Ponnappa)
>    2. Re: [JOBS] Ruby developer for new startup (Alan Buxton)
>    3. Re: [JOBS] Ruby developer for new startup (Matthew Rudy Jacobs)
>    4. Re: [JOBS] Ruby developer for new startup (Sidu Ponnappa)
>    5. Re: [JOBS] Ruby developer for new startup (Paul Robinson)
> 
> 
> ----------------------------------------------------------------------
> 
> Message: 1
> Date: Wed, 11 Jul 2012 12:01:01 +0530
> From: Sidu Ponnappa <ckponnappa at gmail.com>
> To: London Ruby Users Group <chat at lists.lrug.org>
> Subject: Re: [LRUG] [JOBS] Ruby developer for new startup
> Message-ID:
> <CAH2qJ=5Xzaxq4pshXv_cwNp8bgcvpMXoqudcDKj1Aanj22CdgQ at mail.gmail.com>
> Content-Type: text/plain; charset=UTF-8
> 
> I'm curious - have there been no significant startup exits in the UK?
> We have a problem with equity in India for this reason - unlike the
> valley, you don't routinely run into someone driving an expensive car
> that they bought after cashing out their last set of options, so
> making money from equity isn't something people take seriously.
> 
> Best,
> Sidu.
> http://c42.in
> http://sidu.in
> 
> 
> On 10 July 2012 22:27, John Arundel <john at bitfieldconsulting.com> wrote:
>> On 10 Jul 2012, at 17:33, Tom Blomfield wrote:
>>> 
>>> Why is the mention of "equity" an issue for you? Or is that tongue-in-cheek?
>> 
>> It was tongue-in-cheek, but there was an excellent discussion on the list
>> last September about equity and whether or not it's a substitute for money,
>> and if so, how much.
>> 
>> http://lists.lrug.org/pipermail/chat-lrug.org/2011-September/006368.html
>> 
>> I don't know the details of the OP's job offer. If it's market rate or more
>> *and* equity, then great. If the equity is to compensate for a low salary,
>> then alarm bells should be ringing. Even a large share of potentially nothing
>> is potentially nothing.
>> 
>> Regards,
>> John
>> --
>> Bitfield Consulting: we make software that makes things work
>> http://bitfieldconsulting.com/
>> 
>> 
>> _______________________________________________
>> Chat mailing list
>> Chat at lists.lrug.org
>> http://lists.lrug.org/listinfo.cgi/chat-lrug.org
> 
> 
> ------------------------------
> 
> Message: 2
> Date: Wed, 11 Jul 2012 08:45:00 +0100
> From: Alan Buxton <alanbuxton at gmail.com>
> To: London Ruby Users Group <chat at lists.lrug.org>
> Subject: Re: [LRUG] [JOBS] Ruby developer for new startup
> Message-ID:
> <CAJCr4=6JmfL2PRe7fvgxvjD7HgaL+peNRN7dPy_nnqmX66XwLQ at mail.gmail.com>
> Content-Type: text/plain; charset="iso-8859-1"
> 
> As ever sidu is the voice of reason.
> 
> a bit more stuff to mull over.
> 
> Pick an exit value. Have a look on vc blogs to see what is happening in
> Europe.from memory about ?40 million would be as good a point as any.
> 
> Now think of your chance to successfully get to that exit. You may as well
> pick a number out of the air but let's say 10 per cent for the sake of
> argument.
> 
> How long till the exit? Let's say 5 to 10 years.
> 
> I'm sure you can do the sums yourself but the upshot is that: if your
> equity stake percentage starts with a decimal point then it ain't going to
> be life changing, given the amount of time you well have to work for it.
> 
> Sure there are instagrams now and again but frankly you may as well do the
> national lottery.
> 
> But back to the question about how to put a cash value on equity you are
> offered. if the company has had angel or vc funding then they will have an
> idea on current valuation so you could ask for this. Then the value its
> pretty easy to work out.if they're bootstrapped and not revenue generating
> or profitable then your guess is as good as anyone else.
> 
> Though if its advice your interested in my view is this. If you really love
> what the company is doing and want to be a part of it and want to
> eventually share in the upside if there is any then just work out how much
> you need to live on comfortably and make sure your salary covers this, and
> them take the rest as equity, just as long add the equity feels right.
> 
> A
> On Jul 11, 2012 7:31 AM, "Sidu Ponnappa" <ckponnappa at gmail.com> wrote:
> 
>> I'm curious - have there been no significant startup exits in the UK?
>> We have a problem with equity in India for this reason - unlike the
>> valley, you don't routinely run into someone driving an expensive car
>> that they bought after cashing out their last set of options, so
>> making money from equity isn't something people take seriously.
>> 
>> Best,
>> Sidu.
>> http://c42.in
>> http://sidu.in
>> 
>> 
>> On 10 July 2012 22:27, John Arundel <john at bitfieldconsulting.com> wrote:
>>> On 10 Jul 2012, at 17:33, Tom Blomfield wrote:
>>>> 
>>>> Why is the mention of "equity" an issue for you? Or is that
>> tongue-in-cheek?
>>> 
>>> It was tongue-in-cheek, but there was an excellent discussion on the
>> list last September about equity and whether or not it's a substitute for
>> money, and if so, how much.
>>> 
>>> http://lists.lrug.org/pipermail/chat-lrug.org/2011-September/006368.html
>>> 
>>> I don't know the details of the OP's job offer. If it's market rate or
>> more *and* equity, then great. If the equity is to compensate for a low
>> salary, then alarm bells should be ringing. Even a large share of
>> potentially nothing is potentially nothing.
>>> 
>>> Regards,
>>> John
>>> --
>>> Bitfield Consulting: we make software that makes things work
>>> http://bitfieldconsulting.com/
>>> 
>>> 
>>> _______________________________________________
>>> Chat mailing list
>>> Chat at lists.lrug.org
>>> http://lists.lrug.org/listinfo.cgi/chat-lrug.org
>> _______________________________________________
>> Chat mailing list
>> Chat at lists.lrug.org
>> http://lists.lrug.org/listinfo.cgi/chat-lrug.org
>> 
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> Message: 3
> Date: Wed, 11 Jul 2012 16:11:03 +0800
> From: Matthew Rudy Jacobs <matthewrudyjacobs at gmail.com>
> To: London Ruby Users Group <chat at lists.lrug.org>
> Subject: Re: [LRUG] [JOBS] Ruby developer for new startup
> Message-ID:
> <CAADxtW9Ea9RHe8BgpJwnmOet36zz6YPns4-KPkR_NmM93Sa9dA at mail.gmail.com>
> Content-Type: text/plain; charset="utf-8"
> 
> On 11 July 2012 15:45, Alan Buxton <alanbuxton at gmail.com> wrote:
> 
>>  if your equity stake percentage starts with a decimal point then it ain't
>> going to be life changing, given the amount of time you well have to work
>> for it.
>> 
> I think a big exit is too unlikely to think in terms of "expected payoff".
> I think of equity more as having a stake in the product you spend all your
> time creating.
> 
> If that 2.5% of ?40 million over 5 years ends up coming my way, then that's
> cool.
> I can buy my parents house so my dad can retire.
> 
> In a similar way, I think having the odd random gamble is also of value,
> Add some randomness to your life.
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> ------------------------------
> 
> Message: 4
> Date: Wed, 11 Jul 2012 15:15:02 +0530
> From: Sidu Ponnappa <ckponnappa at gmail.com>
> To: London Ruby Users Group <chat at lists.lrug.org>
> Subject: Re: [LRUG] [JOBS] Ruby developer for new startup
> Message-ID:
> <CAH2qJ=4XhCwK9YCoHrofU4g3Ua_5RXRGj=iiOZdenkxpo3sK2Q at mail.gmail.com>
> Content-Type: text/plain; charset=UTF-8
> 
> Realistically, you can usually expect a couple of years worth of
> income from sale of equity in places where such things are common. The
> multi-million dollar/pound payoff is, as Alan put it, like winning the
> lottery. You don't plan your future around that happening. A sudden
> infusion of cash is a good problem to have - I'm sure we can all deal
> with it if it happens :)
> 
> I like to look at equity as a bonus that's worth a couple of years of
> my current salary multiplied by the (decimal) probability of me
> getting it, versus going to a regular corporate job and trying to grow
> my income in the usual manner (which of course also has a probability
> attached to it, but at least you have yesterday's weather to help
> project a more realistic estimate). The last option, is, of course, to
> start your own business - and IMO it's worth asking yourself why you'd
> be willing to take 0.25% of someone else's business (especially if
> it's very very new and unvalidated) rather than 20 - 30% of your own.
> Do you really believe that the company you're considering is run by
> people smarter/more hardworking/better connected than you are to
> justify that delta?
> 
> Careful thought needs to be applied when figuring out that percentage
> probability as well as your own job prospects in a regular business.
> The latter is often a more stable and predictable route to more money.
> Factor in things like your judgement of your prospective employers
> market, their ability to execute and most importantly, their level of
> integrity (are they going to stiff you out of your earnings if they
> exit?). Also include your own appetite for risk based on your age,
> financial situation and current earnings.
> 
> Long story short, treat yourself as a one person consulting
> organisation[1]. Now figure out which "clients" you want to engage
> with, why and what the tradeoffs are.
> 
> Best,
> Sidu.
> http://c42.in
> http://sidu.in
> 
> [1] http://blog.sidu.in/2012/06/everyone-is-running-business-including.html
> 
> On 11 July 2012 13:41, Matthew Rudy Jacobs <matthewrudyjacobs at gmail.com>
> wrote:
>> On 11 July 2012 15:45, Alan Buxton <alanbuxton at gmail.com> wrote:
>>> 
>>>  if your equity stake percentage starts with a decimal point then it ain't
>>> going to be life changing, given the amount of time you well have to work
>>> for it.
>> 
>> I think a big exit is too unlikely to think in terms of "expected payoff".
>> I think of equity more as having a stake in the product you spend all your
>> time creating.
>> 
>> If that 2.5% of ?40 million over 5 years ends up coming my way, then that's
>> cool.
>> I can buy my parents house so my dad can retire.
>> 
>> In a similar way, I think having the odd random gamble is also of value,
>> Add some randomness to your life.
>> 
>> _______________________________________________
>> Chat mailing list
>> Chat at lists.lrug.org
>> http://lists.lrug.org/listinfo.cgi/chat-lrug.org
>> 
> 
> 
> ------------------------------
> 
> Message: 5
> Date: Wed, 11 Jul 2012 10:53:05 +0100
> From: Paul Robinson <paul at 32moves.com>
> To: London Ruby Users Group <chat at lists.lrug.org>
> Subject: Re: [LRUG] [JOBS] Ruby developer for new startup
> Message-ID: <76867080-0A69-415C-90F2-7EABAB1DDFD8 at 32moves.com>
> Content-Type: text/plain; charset="iso-8859-1"
> 
> On 11 Jul 2012, at 08:45, Alan Buxton wrote:
> 
>> Pick an exit value. Have a look on vc blogs to see what is happening in
>> Europe.from memory about ?40 million would be as good a point as any.
>> 
> 
> I really don't want to resurrect this thread, but that's a bit simplistic on
> multiple levels and needs challenging:
> 
> - Why choose ?40 million as an average of exit values? Exits have ranged from
> zero to $1 billion in the last 12 months for a wide range of companies in the
> tech sector
> 
> - Why choose ?40 million as an acceptable exit value for the specific
> circumstances involved in the specific case somebody might evaluate? Some
> firms will never be worth more than a few million even if they take 100%
> market share, and others will be worth many tens of billions with only 10% of
> market share. Not all of us are building "social tools" for hipsters you
> know...
> 
> - Exit value is itself a poor measure if there is a strong likelihood of
> dividends being part of the company's cashflow forecast. Some companies like
> dividends, others hate them. You need to find out what the plan is on that,
> and how it works in relation to the specific options you are being offered,
> the strike price, etc. - it could be you would make more than market rate
> years before an exit. Understanding the specifics of the business is vital.
> 
> - There is considerable tax benefit in being offered a tiny piece of equity
> for a solid firm that is paying dividends over a salary. A ?20k dividend
> replacing ?20k of salary for a higher-rate tax payer could put an extra ?4k in
> your pocket thanks to the tax breaks on offer. If you're a director as well,
> you should be ideally looking for 100% of your income to come via dividends if
> you can, and there will be few accountants out there who disagree with me...
> 
>> Now think of your chance to successfully get to that exit. You may as well
>> pick a number out of the air but let's say 10 per cent for the sake of
>> argument
>> 
> 
> Why? Each year 6.3% of businesses in the IT sector, and about 8% in the
> marketing and media sectors fail in the UK, so how have you extrapolated that
> into 90% of all startups failing before "exit"?
> 
>> I'm sure you can do the sums yourself but the upshot is that: if your equity
>> stake percentage starts with a decimal point then it ain't going to be life
>> changing, given the amount of time you well have to work for it.
>> 
> 
> I sure would have loved 0.1% of Instagram - a crappy photo filter app - even
> if you wouldn't.
> 
> Why didn't I? Because I didn't know the guys involved, I wasn't offered a job,
> and I didn't have a chance to talk to them about their exit plans. If I had
> all of those, I'm sure I would have been a very happy man.
> 
> And you would have still told me that despite having that information to hand
> not available to the general market, that it was all futile and pointless and
> I should demand ?60k-?80k/year and x% in employer pension contributions?
> 
> No wonder the UK startup scene is in such a mess if this is the level of
> defeatism that is prevalent within the community... :-)
> 
>> Sure there are instagrams now and again but frankly you may as well do the
>> national lottery.
>> 
> 
> I can't control how much money I win from the national lottery above ?0 (i.e.
> I can choose not to play). If I work hard in a business with a team I trust
> and who share my goals, and we are constantly iterating and learning from our
> failures, whilst quickly getting to a product/market fit and keeping our heads
> above water, I can clearly have *some* input into how much money I can make.
> 
> They are therefore not comparable.
> 
> I have never seen a company where options were on the table, but the employees
> receiving them could not have significant input into the business as a whole,
> and its future successes and failures would be in no small part of their
> making.
> 
> Please stop trying to convince people who have a bit of entrepreneurial spirit
> that they shouldn't even try.
> 
> Options aren't given to developers who just want to develop. They're given to
> people who go above and beyond and become part of the management culture of a
> firm. People who are evaluating them are ultimately seeing themselves in a
> more entrepreneurial light, and you're telling them it's pointless.
> 
> You might set out to make a healthy pot of cash within a few years, you might
> set out to just take a market rate salary instead, but whichever choice you
> make: you'll be right.
> 
> And really, really stop confusing highly probabilistic random lotteries with
> the ability to build one's own future through a deterministic process that is
> being repeated over and over again every day.
> 
>> But back to the question about how to put a cash value on equity you are
>> offered. if the company has had angel or vc funding then they will have an
>> idea on current valuation so you could ask for this. Then the value its
>> pretty easy to work out.if they're bootstrapped and not revenue generating or
>> profitable then your guess is as good as anyone else.
>> 
> 
> Do you even understand the phrases "pre-money valuation" and "post-money
> valuation" or how Angels and VCs come to these figures? By your reckoning,
> they're guessing unless there is already revenue in the business, and have no
> idea what they're doing.
> 
> I accept company valuation is a bit of a dark art, but there is a lot of
> experience out there and if multiple investors are trying to get into the same
> piece of equity on a funding round, you can almost guarantee the valuations
> are about where the money should be.
> 
> FWIW, it's not always the case the higher valuations win out. There's a reason
> for that, and it's the one that undermines most of your assumptions about how
> businesses succeed and fail. I won't go into that here though.
> 
>> If you really love what the company is doing and want to be a part of it and
>> want to eventually share in the upside if there is any then just work out how
>> much you need to live on comfortably and make sure your salary covers this,
>> and them take the rest as equity, just as long add the equity feels right.
>> 
> 
> 
> This is the only bit of your email I even remotely agree with. :-)
> 
> I for one would encourage far more equity options being put into UK startup
> recruitment offers (they're primarily not because how the hell do you
> structure them with most recruitment agency contracts?), because it's the only
> way to generate the scale of growth we see in the valley. It's not "risky", it
> just requires more skills than going onto monster.com and doing an averaging
> job of the first 10 ads you see.
> 
> Paul
> 
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> End of Chat Digest, Vol 78, Issue 18
> ************************************


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