Most VC-funded co's are bay area, so I was guessing $140K base + $100K RSUs (which are effectively cash) => $240K based on what I recalled about big companies here. But looks like $260K for someone just a few years in (L4) and $350K for folks senior enough to be real leads (L5). Funded co's are the top 1%, so that's arguably some $600K folks (L6). Also, I didn't adjust for being in a top 1 market (bay area) or 2nd tier (nyc/seattle/austin/...) vs Other. But either way, yeah, you're right, > 50% discount for those #'s ;-)
I would say most of the companies on levels are not in the same league as your average startup and do not attract the same talent nor need to pay so well.
You can't measure on average only on the top tier, and to compete with it would be foolish IMHO.
Only 0.5-1% of startups get picked for VC funding, and even less to Series A etc., so there is a bit of a weeder on that side. On the other side, with multiple top tech companies being 100K+ employees, being at one long enough to lead a team or project is not that selective.
I do agree that competing based on compensation is generally foolish, with only exceptions like being funded by the top 1% of VCs who like to compete by overspending. Hence, 50% paycut.
>> Funded co's are the top 1%, so that's arguably some $600K folks (L6)
> Only 0.5-1% of startups get picked for VC funding
This is a big misunderstanding. The rate at which pitches get picked up for funding is not related to the rank of the engineers that the startup would hire. Startup engineers tend to be either younger and inexperienced or experienced, but average (i.e., not top-earners at big tech). In either case, they are risk-seekers who are willing to take lower salaries in exchange for equity with a slim chance at making it big. Startups are, generally speaking, under strict financial pressure. They usually can’t afford to pay market rate, let alone big tech (“We need the best people in the industry at any cost”) rates.
That's a hell of a claim I'd be curious to see backed up. In a sense, one of the first tests for a funded founder is hiring folks at below-market (my initial 50% estimate) who still outperform others.
Those levels.fyi compensation reports are distorted growth in the value of RSUs. At time of hire, RSUs are typically allocated at about 10-20% of total compensation. In the case of many reports on levels.fyi, particularly high-growth tech companies like Facebook and Google, stock prices have multiplied in value several times over. So for those companies RSU compensation can jump to 50% or more of total compensation. That is not typical at all.
Levels.fyi data is also distorted because data is self-reported. Higher-earning individuals are more likely to report because it is a form of bragging. Similarly, lower-earning individuals are less likely to report. Also, workers generally want to increase the perception of higher average compensation to gain an advantage in salary negotiations.
A better general point of comparison may be the salary reports put out by HR consulting firms like Robert Half [0]. Those reports can be of limited usefulness, however, because they report very broad categories and salary ranges. Still, they're useful to know about because those reports are what Company X will cite for why they can't pay you what levels.fyi says is the average pay.
Most VC-funded co's are bay area, so I was guessing $140K base + $100K RSUs (which are effectively cash) => $240K based on what I recalled about big companies here. But looks like $260K for someone just a few years in (L4) and $350K for folks senior enough to be real leads (L5). Funded co's are the top 1%, so that's arguably some $600K folks (L6). Also, I didn't adjust for being in a top 1 market (bay area) or 2nd tier (nyc/seattle/austin/...) vs Other. But either way, yeah, you're right, > 50% discount for those #'s ;-)