How To NOT Get Screwed As A Software Engineer: YC Partners Reveal the Warning Signs and Solutions

YC partners share hard truths about technical exploitation in startups and big tech, from 90/10 equity splits to being excluded from decisions while doing all the work—plus practical steps to fix bad situations.

Learn the warning signs of exploitation, when you're actually getting a good deal, and how to demand the respect and compensation your technical skills deserve.

Key Takeaways

• Technical co-founders routinely accept 10% equity while business co-founders take 90% with no justification beyond "it was my idea"—most startup value comes from execution ahead, not initial concepts
• Early technical employees get exploited by receiving 1% equity despite providing technical co-founder level work, while multiple business founders split the remaining 99%
• Decision-making exclusion signals exploitation—if business people make all strategic decisions in meetings you're not invited to, you're being treated as a code-writing robot rather than a strategic partner
• Effort imbalance indicates unfair treatment when you work 100-hour weeks while business counterparts take vacations and work part-time, especially common with "idea guy" founders
• Technical people often recognize company failure first through analytics and user data, but get told to "stay in their lane" when raising concerns about obvious problems
• Good situations involve equal grinding from all parties, learning opportunities that accelerate career growth beyond big tech pace, and compensation that creates life-changing wealth if successful
• Taking ownership and asking for seat at the table often resolves exploitation—many situations improve simply by having honest conversations about equity splits and responsibilities
• Geographic location dramatically affects technical work value—moving to startup hubs or high-demand areas can immediately improve compensation and opportunities
• Sometimes stepping backward in responsibility or title enables two steps forward through better networks, compensation, or learning opportunities that compound over time

Timeline Overview

• 00:00–00:29 — Introduction: Setting up discussion about technical people getting exploited by business counterparts in various company settings
• 00:29–02:40 — Who gets exploited: Technical co-founders, essential engineers, big tech workers, and college students providing technical work without fair compensation
• 02:40–04:33 — Equity fairness: Why equal equity makes sense for co-founders and how business people manipulate technical people into accepting tiny percentages
• 04:33–05:38 — Early employee exploitation: Lead engineers doing technical co-founder work while receiving 1% equity compared to multiple business founders
• 05:38–06:33 — Big tech scenarios: When grinding 100-hour weeks while managers get promotions creates unfair risk-reward ratios
• 06:33–06:52 — College student exploitation: Being used as "technical intern" to build prototypes for MBA ideas without equity or fair compensation
• 06:52–07:38 — Decision-making exclusion: Warning signs when business people make all strategic decisions while technical people execute without input
• 07:38–08:40 — Effort imbalance recognition: Identifying when you work significantly harder than business counterparts who may be part-time or frequently absent
• 08:40–10:36 — Performance awareness: Technical people often see failure first through data but get silenced when raising legitimate business concerns
• 10:36–11:55 — Good deal indicators: Learning acceleration, fair compensation, equal effort from all parties, and honest expectation setting
• 11:55–12:31 — Taking responsibility: When you have equity and decision-making power, company failure becomes shared responsibility rather than exploitation
• 12:31–13:35 — Honest expectation setting: Distinguishing between fair treatment and exploitation based on upfront communication about work requirements
• 13:35–16:35 — Fixing bad situations: Practical steps including asking for seat at table, exploring alternatives, geographic moves, and strategic career steps
• 16:35–End — Final advice: Know your worth, use the checklist, find places that value your skills, and advice for business people to avoid exploitation

Who Gets Exploited: The Technical People Doing All The Work

• Technical co-founders who build entire products while business co-founders handle "strategy" and fundraising, yet accept dramatically unequal equity splits based on vague justifications about whose idea it was originally.
• Early technical employees providing technical co-founder level work at three-person startups but receiving 1% equity while multiple business founders split the remaining ownership. These engineers essentially function as technical co-founders without the recognition or compensation.
• Essential engineers at scaling companies who become the go-to person for fixing critical issues, working late nights and weekends to keep systems running, while managers and business development people take credit for their technical achievements.
• College students approached by MBA classmates to build prototypes and technical systems without any equity compensation, functioning as unpaid technical interns while business people position themselves as founders.
• Big tech employees grinding 100-hour weeks on critical projects while their managers receive million-dollar compensation packages, promotions, and extensive vacation time based on the technical work their reports produce.

The Equity Scam: Why "It Was My Idea" Doesn't Justify 90/10 Splits

• The most common exploitation involves business co-founders convincing technical co-founders that initial idea generation justifies massive equity differences, typically 90/10 or 80/20 splits despite equal or greater technical contribution to actual company building.
• YC consistently sees applications where business founders have secured the vast majority of equity through superior negotiation skills rather than proportional value contribution. The technical founder built the entire product while the business founder wrote a pitch deck.
• Equal equity splits make practical sense because the vast majority of company value comes from execution ahead rather than initial concept development. Most successful companies evolve significantly from their original ideas through technical iteration and customer feedback.
• The ownership structure affects motivation fundamentally—technical co-founders with meaningful equity wake up at 3 AM to fix server issues because they feel like owners, while those with token equity wait for calls and require management oversight.
• Early employees providing technical co-founder work should receive technical co-founder equity, typically 15-25% rather than 1%. If you're the lead engineer at a three-person company doing technical co-founder work, you deserve technical co-founder compensation.

Decision-Making Exclusion: The Code Monkey Treatment

• Exploitation manifests clearly when business people conduct all strategic meetings without technical participation, treating engineers as code-writing robots rather than strategic partners who understand product feasibility and customer needs.
• Technical people often possess crucial insights about product capabilities, user behavior analytics, and implementation challenges that directly affect business strategy, yet get excluded from decision-making processes where this knowledge would prevent expensive mistakes.
• The pattern typically involves business people making commitments to customers or investors about technical capabilities without consulting the people who actually have to build those features, creating unrealistic expectations and impossible deadlines.
• If you're the person actually building the product but never get asked about feature prioritization, technical architecture decisions, or customer feedback integration, you're being treated as a resource rather than a strategic partner.
• Having a "seat at the table" means participating in discussions about product direction, go-to-market strategy, fundraising approaches, and hiring decisions—not just implementing decisions made by others in meetings you're not invited to attend.

Effort Imbalance: When You're Grinding While They're Vacationing

• The clearest exploitation signal involves massive effort imbalances where technical people work 80-100 hour weeks while business counterparts maintain normal schedules, take frequent vacations, or work part-time on the startup.
• This pattern appears frequently with "idea guys" who position themselves as founders but contribute minimal ongoing effort after initial concept development, leaving technical people to handle all the actual company building work.
• Fair partnerships involve everyone grinding equally during intense startup phases, with business people putting in comparable hours on sales, fundraising, customer development, and operational tasks while technical people focus on product development.
• The effort assessment should include weekends, late nights, and crisis response—if you're the only person consistently working beyond normal business hours to keep the company operational, the partnership structure needs reevaluation.
• Sometimes this imbalance reflects misunderstanding rather than exploitation, where business people don't realize how much technical work their commitments require, making honest conversation about workload distribution essential for resolution.

Recognizing Failure First: When Analytics Don't Lie

• Technical people often recognize company failure earliest because they have direct access to user analytics, server logs, and product usage data that reveal when launches bomb or growth stagnates, while business people rely on vanity metrics.
• The exploitation occurs when technical people raise legitimate concerns about obvious business problems based on data they can see, but get told to "stay in their lane" and stop asking questions about business strategy.
• Business people who convinced technical partners to accept tiny equity stakes often use the same persuasion tactics to dismiss technical concerns about company performance, creating patterns of ongoing manipulation rather than collaborative problem-solving.
• If you built the analytics systems and can see that user engagement is terrible, conversion rates are dropping, or technical performance is degrading, those insights should inform business strategy rather than being dismissed as outside your expertise.
• The ability to read technical signals about business health represents valuable strategic insight that should be welcomed by business partners rather than suppressed to maintain false optimism about company prospects.

Signs You're Actually Getting a Good Deal

• You recognize from an opportunity cost perspective that you're at the best possible place for your risk-reward ratio, feeling privileged to work with your team rather than constantly evaluating exit options.
• Learning acceleration at startup pace dramatically exceeds what you could achieve at established companies, providing education and skill development that justifies lower immediate compensation through long-term career benefits.
• Everyone on the team feels like they're getting a great deal and contributes proportional effort, creating positive culture where mutual appreciation replaces exploitation dynamics.
• Immigration benefits, geographic opportunities, or network access provide value beyond immediate compensation that significantly improves your long-term career prospects and life situation.
• Honest expectation setting means leadership accurately described the work requirements upfront, and the actual experience matches what was promised rather than exceeding expectations through manipulation or deception.

Taking Ownership: When You're Part of the Problem

• If you have meaningful equity and decision-making authority, company failure becomes shared responsibility rather than exploitation—you can't blame business partners when you had power to influence outcomes.
• Having a seat at the table means taking accountability for strategic decisions and business results rather than just implementing technical requirements, shifting the dynamic from employee to partner.
• Technical co-founders with equal equity who focus only on technical work while avoiding business responsibilities create imbalanced partnerships where business co-founders handle all non-technical challenges alone.
• The ownership mindset involves proactively identifying business problems, proposing solutions, and taking initiative on customer development rather than waiting for business partners to assign technical tasks.
• Sometimes technical people create their own exploitation by refusing to engage with business strategy, sales, or customer feedback, then complaining when they're excluded from decisions they've shown no interest in influencing.

Practical Steps to Fix Bad Situations

• Ask directly for a seat at the table by requesting inclusion in strategic meetings, offering to take ownership of specific business areas, and proposing solutions to problems you've identified through technical work.
• Renegotiate equity splits by having honest conversations about value contribution, pointing out that most company value comes from execution ahead rather than initial idea development, and suggesting more balanced ownership structures.
• Explore alternative opportunities to understand your market value and leverage—sometimes discovering you could earn significantly more elsewhere provides negotiating power for improving your current situation.
• Consider geographic moves to locations where technical skills command higher compensation and respect, particularly startup hubs where technical talent receives appropriate valuation and partnership opportunities.
• Take strategic career steps that may involve temporary responsibility or compensation reduction but create better long-term positioning through improved networks, learning opportunities, or company equity potential.

When to Make the Move: Opportunity Cost Evaluation

• If other technical people with similar skills are receiving significantly better compensation, equity, or respect elsewhere, your current situation represents poor opportunity cost regardless of absolute compensation levels.
• Big tech workers grinding 100-hour weeks while managers receive promotions based on their work should consider startups where technical contributions receive direct equity participation and strategic recognition.
• Technical co-founders with tiny equity stakes should seriously evaluate starting their own companies where they can maintain appropriate ownership levels while leveraging their existing technical capabilities.
• Early employees doing technical co-founder work for 1% equity should seek technical co-founder positions at other startups where their contributions receive appropriate recognition and compensation.
• Sometimes stepping backward in title or immediate compensation enables access to situations with much higher upside potential, better learning opportunities, or stronger long-term career trajectories

For Business People: How to Avoid Exploitation

• Recognize that technical partners create most of the actual company value through product development, infrastructure building, and problem-solving, making equal partnerships more effective than hierarchical structures.
• Include technical people in all strategic decisions that affect product development, customer experience, or technical feasibility to avoid making commitments that create impossible implementation challenges.
• Match effort levels by working comparable hours on sales, fundraising, customer development, and business operations while technical partners focus on product development and technical challenges.
• Set honest expectations about work requirements, compensation structures, and company prospects rather than manipulating technical people into unfavorable agreements through optimistic projections or false promises.
• Understand that retaining exceptional technical talent requires fair treatment—losing your key technical person destroys company value regardless of how well other business functions operate.

Know Your Worth: The Ultimate Defense

• Technical skills represent rare, valuable capabilities that command significant compensation and respect in properly functioning markets—don't accept treatment that suggests otherwise.
• Nice people tend to get exploited most frequently because they avoid conflict and assume good intentions, making it essential to advocate for fair treatment even when it feels uncomfortable.
• Use the diagnostic questions about equity, decision-making, effort balance, and performance recognition to evaluate whether your current situation represents fair treatment or exploitation.
• Find environments where technical contributions receive appropriate appreciation and compensation rather than accepting suboptimal treatment due to geographic constraints or limited awareness of alternatives.
• Remember that exceptional technical people have options—companies that don't provide fair treatment will lose their best technical talent to competitors who recognize value appropriately.

Common Questions

Q: How do I know if my equity percentage is fair as a technical co-founder?
A: Equal or near-equal splits make sense when both founders contribute essential skills. "It was my idea" doesn't justify major equity differences since most value comes from execution.

Q: What should early technical employees expect for equity compensation?
A: If you're doing technical co-founder level work at a 3-person startup, expect technical co-founder equity (15-25%) rather than employee equity (1%).

Q: How can I get included in strategic decision-making?
A: Ask directly for seat at the table, offer solutions to problems you've identified, and take ownership of specific business areas to demonstrate strategic value.

Q: When should I leave a situation where I'm being exploited?
A: When honest conversations don't improve treatment, when opportunity cost becomes too high, or when you're excluded from decisions despite doing most of the work.

Q: How do I evaluate whether my big tech job is worth the effort?
A: Compare your work-life balance and compensation progression to the hours you're investing. If you're grinding while managers get promoted, consider alternatives.

Conclusion

Technical exploitation in startups and tech companies follows predictable patterns that can be identified and corrected through honest self-assessment and strategic action. The most common warning signs—unequal equity despite equal contribution, exclusion from strategic decisions, effort imbalances, and dismissal of technical insights about business performance—all stem from business people failing to recognize technical work as strategic partnership rather than task execution.

The solution requires technical people to advocate for themselves by demanding fair equity, requesting seats at decision-making tables, and walking away from situations that don't provide appropriate compensation for their contributions. Nice people get exploited most frequently because they avoid conflict and assume good intentions, making self-advocacy essential despite discomfort.

However, not every challenging situation represents exploitation. When you have meaningful equity and decision-making power, company struggles become shared responsibility. When leadership sets honest expectations that match reality, difficult work doesn't constitute unfair treatment. The key lies in distinguishing between fair partnerships that require significant effort and exploitative relationships that extract value without proportional compensation.

For technical professionals evaluating their situations, the framework provides clear diagnostic questions:

• Equity fairness: Does your ownership percentage reflect your value contribution, or did superior negotiation skills create imbalanced splits?
• Decision-making inclusion: Are you treated as a strategic partner or a code-writing resource excluded from important discussions?
• Effort balance: Do all parties contribute proportional effort, or are you grinding while others coast on your technical work?
• Performance recognition: Can you raise legitimate business concerns based on technical data, or are you told to stay in your lane?
• Opportunity cost: Are you getting the best available deal for your skills, or would alternatives provide better compensation and respect?

The practical steps for improvement often start with honest conversations rather than immediately leaving. Many technical people discover they can improve their situations significantly by asking for fair treatment, offering strategic contributions beyond coding, and demonstrating the business value of their technical insights.

For business people, avoiding exploitation requires recognizing technical partners as equals whose contributions create most company value. Include them in strategic decisions, match their effort levels, provide fair equity compensation, and leverage their technical insights about customer behavior and product performance rather than dismissing them as outside business expertise.

The ultimate message for technical professionals: know your worth and demand treatment that reflects the significant value your skills create. Exceptional technical talent has options, and companies that provide fair partnerships will consistently outperform those that rely on exploitation to extract technical value without proportional compensation.