Nov 1, 2023 · 17m · y-combinator
How To NOT Get Screwed As A Software Engineer · Y Combinator
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Y Combinator partners Dalton Caldwell and Michael Seibel discuss how software engineers and technical co-founders can identify exploitation, secure fair equity and decision-making power, and establish balanced partnerships in the tech industry.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The partners hold 98.8% of the talking time here. How this is scored →
The partners as informed peer 7.7 Guest teaching 0.0 Guest disagreement 0.0 The partners pushing back 0.0
speaking balance: gold is the partners, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 9:11 Critique of evasive business co-founders
The hosts roleplay the dismissive, combative response of non-technical founders deflecting valid metric concerns from their technical partners.
Hardest push from the partners ▶ 12:02 Pushback on unwarranted victim mentalityDalton and Michael firmly clarify that engineers who hold equal equity and decision-making power cannot blame others when the startup fails.
Biggest teaching moment ▶ 14:16 Tim from Justin.tv case studyMichael educates listeners on how taking proactive responsibility is often what actually earns an employee a seat at the decision-making table.
The partners hold their own ▶ 3:35 Deconstructing unearned equity splitsMichael and Dalton explain why unequal early equity splits destroy long-term motivation when urgent technical crises arise.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The partners as informed peer | Guest teaching | Guest disagreement | The partners pushing back | Why |
|---|---|---|---|---|---|---|
| Title Sequence: Dalton & Michael | 7 | 0 | 0 | 0 | Dalton and Michael frame the core target audience based on years of YC application data and founder interviews, establishing deep industry expertise in identifying startup exploitation patterns. | |
| Understanding Fair Equity Splits | 8 | 0 | 0 | 0 | The hosts break down standard YC guidance on equal equity splits, dissecting how non-technical founders use weak rationalizations like idea ownership to exploit engineers. | |
| The Early Employee Equity Dilemma | 8 | 0 | 0 | 0 | Michael and Dalton analyze the trade-offs of early employees versus big tech employees, assessing equity upside, risk-reward ratios, and opportunity costs. | |
| Securing a Seat at the Decision-Making Table | 8 | 0 | 0 | 0 | The hosts detail warning signs of operational marginalization, such as being excluded from core strategic decisions and gaslit regarding business metrics. | |
| Signs You Are Getting a Good Deal | 8 | 0 | 0 | 0 | Michael and Dalton articulate counter-intuitive positive indicators, noting that steep learning curves, transparent expectations, and shared accountability mean a founder is not being exploited. | |
| Practical Steps to Fix an Unfair Situation | 8 | 0 | 0 | 0 | Michael shares actionable tactical advice from his Justin.tv experience on asserting agency and renegotiating terms, demonstrating deep practical startup management experience. | |
| Parting Advice: Know Your Worth and Treat Partners Fairly | 7 | 0 | 0 | 0 | Dalton and Michael conclude with clear warnings to business founders about engineer retention and advice for engineers to realize their market leverage. |
Statements from this episode (14)
Caldwell says exploited founders in YC applications are usually technical people.
“So this comes up a lot for us at YC where we read a lot of applications and we interview a lot of companies and we see folks where it's pretty clear what's going on. We can see it a mile away in the application that someone is getting exploited or ripped off a…”
Caldwell notes Y Combinator explicitly recommends equal equity splits for startup co-founders.
“Something like equal equity is pretty common for startups that apply to YC, and it's something we recommend.”
Caldwell says early technical employees doing co-founder work get hosed with 1%.
“Well, the early employee notoriously kind of gets hosed on this stuff, especially if they're providing the work of an equal technical co-founder, yet they get one percent or less of the company. Again, this is very common where you'll have two business founder…”
Seibel says essential scale-up engineers should expect life-changing upside, not bonuses.
“I would say if you're in the scale up, And you are the essential engineer. The test I would kind of ask myself is, is if this thing works, are you going to make a life changing amount of money? And, you know, I would argue that like, you know, that doesn't mea…”
Seibel argues grinding 100-hour weeks in big tech is a bad deal.
“I would argue that if you're the Googler, you're getting a bad deal if you're doing, like, a hundred hour weeks and grinding, and, like, your boss or your boss's boss is getting, like, mega vacations and ten million dollar a year packages and, like, promotions…”
Seibel warns college student developers are often treated as typers without equity.
“And then I guess, you know, last but not least is the college student who, like, in most cases isn't even offered equity. Like, that's like, you know, they're just the typer.”
Caldwell warns excluding engineers from business meetings clearly signals exploitation.
“If you're trying to self-diagnose, am I being exploited as an engineer, as a technical person, is the whole point that the business people have a lot of meetings that you're not invited to, and all decisions about everything are made by the business people, an…”
Caldwell notes technical founders notice failure first by reading the analytics.
“Well, and you're the technical person, so you notice the first. The funniest thing is this one of the technical person who does all the work is the one actually reading the analytics and like, hey, like, this, our launch bombed. What's the plan in the business…”
Seibel argues engineers learn much faster at a startup than at Google.
“I think most people don't realize that, like, you can learn at a startup pace or you can learn at a Google pace, and like, a startup is an amazing opportunity to learn. So if you're getting better, faster than your peers who are in big tech, You might be getti…”
Caldwell warns having equal equity means sharing blame when startups fail.
“If you have equal equity with someone and you have a seat at the table in decision making, just because it's not working doesn't mean you get the right to blame other people.”
Seibel claims transparently brutal startup jobs are informed choices, not exploitation.
“When the team you're coming into is extremely upfront with you about how it's going to be, and it turns out that way and it's not good, it's not necessarily you're being exploited. Like you made that choice. You chose that.”
Caldwell notes unequal founder equity splits are easily fixed when directly challenged.
“We see this with equity splits because often sometimes it'll just be, Hey, have you all thought about maybe like, or how did you come up with the equity splits? Like, well, it's, you know, 9010. Well, why? Well, it's my idea. Well, you know, most of the work i…”