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Getting Rich Is Not That Much Easier for Tech Workers

December 26, 2015 By Kyle Mills Leave a Comment

"business man holding a banana"

If your boss looks like this, you should probably go for the raise instead of the option of having share holdings in the company.

People may think that along with the massive boom in the technology market, making some money while working at companies in this sector would be relatively smooth. But getting rich is not that much easier for tech workers in comparison to other segments of the market.

Taking into account that there are around 140 companies with the net worth of $1 billion, one may think that working at them would ensure strong financing until the later years in their life. This is not entirely the case, due to the fact that most companies do not have the strong foundation which large companies possess.

Because most tech workers, seeing how much the company is worth, opt to invest some of their income towards shares, if said company would crash, they will suffer the brunt of the impact, not the investors and executives. An example for this can be seen at Good Technology, a company valued at $1.1, that got sold for $425 million to Blackberry, making worker shares value at just a couple of cents.

One of the most common pieces of advice given by veterans in this sector is exacting patience when considering to go for option grants. Although the idea of having stock in the company where you work seems like an easy way to get rich, this is extremely dependent on the company’s luck. Especially if the business in question is just a start-up.

The choice of getting a lower salary with added shares in the company has to be based extensively on how strong the IPO of said company is. The possibility that it may be bought at a premium price also has to be taken into consideration. Countless workers have been burned by this choice of having stock options, making tech workers urge new employees to tread carefully.

Some businesses may choose to offer shares in exchange for a salary raise. This should come as a tell-tale sign that the company may be facing the danger of going under. If it offers something without conclusive value instead of cash, workers should either opt for the raise or in extreme cases, start looking for a new working place.

Another factor one should keep in mind is that buying out early is not advantageous at all. Keeping your options open constantly after leaving the company where you have shares should be of utmost importance. Although investors may evaluate the company at a rather high sum, this doesn’t mean in any way that the company is safe. The various clauses made by investors protect them from a possible crash, letting the normal workers feel the full force of such an event.

Common stock holders are the last ones to get paid if the case arises. This is why workers should refrain from having shares if they do not the utmost confidence towards the company’s founders. Countless startup founding teams have proven to be corrupted or basically incompetent when dealing with the crash of their business. Working at a large company that is already established is a better career move than going at a newly created firm.

It is not entirely surprising that getting rich is not that much easier for tech workers, given that the technology sector is in constant fluctuation, even if its constant growth may be appealing to many. One has to keep in mind that this side of the market faces the same threats that other sides do on a daily basis. Only large companies like Google or Microsoft can be considered almost completely safe.

Image source:www.pixabay.com

Filed Under: Business & Company Tagged With: corrupt founders, Getting Rich Is Not That Much Easier for Tech Workers, income raises, net value, option grants, smal businesses, stock market, technology sector

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