How Not to Get Screwed as a Software Engineer: Essential Advice for Technical Professionals

In the startup and tech world, technical people often find themselves exploited—doing the heavy lifting but missing out on fair compensation, decision-making power, or recognition. If you’re a software engineer, technical co-founder, or lead engineer, it’s crucial to understand your value and protect your interests. Drawing from insights shared by experienced entrepreneurs Dalton and Michael, here’s a comprehensive guide to help you navigate these challenges and ensure you get a fair deal.

Who Is This Advice For?

This guidance is aimed at various roles technical people often find themselves in:

• Technical co-founders at startups who are building the product but might not have equal ownership.
• Lead engineers or heads of engineering in early-stage startups who are working tirelessly without founder status.
• College students or interns often brought in to build prototypes with little or no equity.
• Engineers at scaling companies (the “Googler” type) who may be grinding long hours while others reap big rewards.

If you’re the person doing all the work but not getting your fair share of rewards or influence, this advice is for you.

Equity: Are You Getting a Fair Share?

Equity is a critical part of compensation and long-term reward in startups. A common red flag is when the technical co-founder or lead engineer gets a disproportionately small percentage of equity compared to business co-founders.

• Equal equity splits between co-founders are common and recommended to ensure everyone feels like an owner.
• Beware of deals where a business founder has 90% and the technical founder 10% or less without clear justification.
• Early employees who act as de facto technical co-founders but receive only 1% or less equity are often undervalued.
• Ask yourself: If this company succeeds, will I make a life-changing amount of money? If the answer is no, you might be undercompensated.

Decision-Making Power: Do You Have a Seat at the Table?

Beyond equity, having influence over decisions is vital.

• If all strategic and operational meetings exclude you, and you’re only treated as a coder, that’s a strong sign of exploitation.
• Being involved in decision-making shows respect for your expertise and aligns your interests with the company’s success.
• Evaluate whether your input is valued or ignored—being sidelined means you might be treated like a machine, not a partner.

Effort and Workload: Is the Effort Balanced?

Consider the effort balance between you and your counterparts:

• Are you working long hours while the business team enjoys frequent vacations or lighter workloads?
• Is everyone equally committed and hustling, or are you carrying the bulk of the responsibility?
• A fair partnership involves shared hard work and dedication.

Recognizing When It’s Not Working

Be honest with your assessment:

• Are you the one noticing problems early (e.g., poor analytics, failed launches) but ignored by others?
• Is the company struggling with no clear plan, and you’re left to fix everything without adequate support?
• If you feel you’re putting in maximum effort but the company isn’t progressing or appreciating your work, it’s time to reconsider.

When Things Are Going Well

Not every story is a cautionary tale. Signs you’re in a good situation include:

• Feeling that you have the best risk-reward ratio possible.
• Being proud to work with a team where everyone feels valued and fairly compensated.
• Having lots of responsibility and learning opportunities that accelerate your growth.
• The job providing unique benefits, such as visa sponsorship or career-launching experience.

Owning Your Role: Don’t Be Part of the Problem

If you have a seat at the table and equity but things aren’t going well, it’s also your responsibility to contribute constructively.

• Blaming others without participating in solutions isn’t productive.
• Take ownership—bring ideas, point out issues, and propose fixes.
• Sometimes, improving your situation means stepping up, not just stepping back.

Setting Expectations and Avoiding Surprises

Honesty from the outset matters:

• If the job is genuinely tough and you were warned upfront, you made an informed choice.
• Respect transparency and set your expectations accordingly.
• Beware of “gaslighting” where you’re made to feel your concerns are invalid or you’re being unreasonable.

How to Fix a Bad Situation

If you suspect you’re being exploited or undervalued:

• Assess your opportunity cost—what are you giving up by staying?
• Explore other roles where you might have a better seat at the table or more equitable compensation.
• Sometimes, ask directly for more responsibility or a seat at the table—you might be given ownership if you show initiative.
• Consider geographic moves or switching companies to increase your value.
• Be open to taking a step back temporarily to gain better opportunities in the future.

Know Your Worth and Stand Up for Yourself

Technical talent is rare and valuable. Being a nice person can sometimes lead to being taken advantage of, so:

• Know your worth and don’t settle for less than you deserve.
• Follow a checklist of fair compensation, involvement, and respect.
• Find a company culture where you are truly appreciated.
• If you are a business leader, be honest and upfront with your technical team—don’t exploit their talents.

Final Thoughts

Being a software engineer or technical professional in startups or tech companies comes with unique challenges around equity, recognition, and work balance. By understanding these dynamics, asking the right questions, and advocating for yourself, you can avoid being exploited and find rewarding opportunities where your skills and effort are truly valued.

Remember: you have agency. Don’t let anyone convince you otherwise.

If you found this helpful, share it with your technical friends and colleagues to empower them in their careers!