Startup vs. big company compensation in practice

I recently caught up with a friend of mine who spent four years at Uber as an engineer starting in mid-2013. They were employee number 60-something or 70-something. I was surprised to find out that they'd "only" walked away with a couple of million dollars.

I read S-1 filings and watch IPO prices, so I'm not surprised when I hear that the median engineer at a company that IPOs for $1B walks away with less than they would've made as a new grad at a big tech company. But I find it surprising that someone who's a pretty early employee at a $45B company (~ $45B at lock-up expiration) didn't do any better than a senior (or perhaps even non-senior engineer) at a big tech company if you include the stock increases that occurred between 2013 and 2017, the period of time this person was at Uber.

This person was a bit unlucky in a couple of ways. The joined just a couple months after a fundraising round; they think they would've made $5m had they joined just two months sooner. And they got a bad offer and didn't have leverage to negotiate for a better one, they could've made another million or two if they were more a bit more senior and had better negotiating leverage. I certainly know people who joined later and did better, but even so, this is the biggest tech IPO since Facebook in 2012 and one of the biggest tech IPOs of all time and early employees who didn't negotiate well would've been better off not negotiating well with a big tech company instead.

Of course a company can have a smaller IPO and do better by employees -- Snap handed out such generous offers that, despite the post-IPO decline, people have done quite well even if they joined just months before the IPO, a friend of mine at Heptio never has to work again after working there for a year even though, by his account, they were acquired before they'd really built or shipped anything and they spent the entire time pointlessly flailing around, etc.

But even given that you're at a company that has a huge IPO, where the founders make billions and execs walk away with tens to hundreds of millions of dollars, working at a startup is a lottery ticket! By comparison, collecting half a million to a million a year at big tech company doesn't seem so bad, at least if you care about compensation.