Are startup jobs worth it for software developers?

There was an article on Wired a few months back discussing salaries and career options for software engineers. This of particular interest to me as it is something I think about almost daily as I scour blogs for the latest tech trends, and monitor job boards to assess my value.

The thrust of the article was that startups do not offer the best salaries for us techies. In startups, even more so than medium-large businesses, the top employees take home the majority of the profits. Those top employees tend to be the business guys that bring in the money and make the decisions (sales, managers), and the owners.

The article goes on to discuss how owning a percent stake in the company is more valuable than earning a slightly higher salary, because if and when the company reaches IPO, the chances of that ownership share turning into a sizable payout are potentially very nice indeed.

Where does this leave us, the software engineers helping these startups reach that coveted goal? As an employee, you have to gauge your prospective employer. How likely do you think the company is to reach that milestone, how strongly do you believe in the product or service, and what do you think the chances are of getting a decent return. When it comes time for the negotiation table, if you think the numbers add up, you might suggest working at a lower rate in return for a small stake in the company. A lot of startups will jump at this, as most aren’t turning a profit for their first few years.

This requires sacrifice on your part, as you’ll be working below market value. It may be many years before it happens, it may never happen, but you never know, it could be worth it.