Nope. You can still get rich from equity, especially by being an early employee. It's all a giant lottery though.
The easiest way is to join companies that are obviously doing well and will likely IPO in 2-3 years. This is still a lottery, but one with much higher odds and a lower potential payout. You can make $600k-1m every few years in equity alone by hopping around these companies.
If you ever wondered why so many people have ~1-2 years of experience at each company on their resume, this is often why. They join, get a decent chunk of their equity grant (in RSUs), then go to another company to get more equity. Some of these companies will do well, others will do poorly. You end up distributing your risk and ensuring you'll get a decent payout.
This is a great narrative! It just doesn’t work out for most people.
I would say that if you want to hit a lotto ticket, this is your best route. Increased variance is your friend when you are at the downside and it’s all uphill.
But if you want to get rich, and you are the average HN reader, it’s better to bet on the typical case.
(That said, if you have a list of companies that meet your current criteria, I would love to know! I know a lot of faang engineers who are bored and would love a shot at millions.)
Companies typically switch to RSUs from option as they get closer to the IPO. Conversely if a company is offering RSUs then it’s a strong signal that they will go public within 18-24 months and also that the options have appreciated as much as they could as evaluated by private investors and so subsequent stock appreciation could only happen by public investors. Exceptions exist but it’s a good heuristic.
You can get RSUs and RSAs from a private company, it's just often undesirable because you pay income tax on the valuation of the shares vested but you can't sell your shares until a liquidity event or IPO.
The easiest way is to join companies that are obviously doing well and will likely IPO in 2-3 years. This is still a lottery, but one with much higher odds and a lower potential payout. You can make $600k-1m every few years in equity alone by hopping around these companies.
If you ever wondered why so many people have ~1-2 years of experience at each company on their resume, this is often why. They join, get a decent chunk of their equity grant (in RSUs), then go to another company to get more equity. Some of these companies will do well, others will do poorly. You end up distributing your risk and ensuring you'll get a decent payout.