“Look, I’m incredibly thankful for this industry. It made me a millionaire.” The person seated across the table from me went through a series of facial microexpressions as I said this — surprise, disgust, analysis and finally, calm. We don’t really talk about money in Silicon Valley. At least not in public in a personal way with near strangers. We *speculate* about people and wealth a shit-ton – based upon a company’s last fundraise, based upon current stock price, based on the market price of BTC – but we don’t really talk our own situations, challenges, learnings. When a notable exception occurs – Jason Hirschhorn’s post about selling his first company – it really sticks for me as important. Don’t values and community come from sharing experiences and being vulnerable together? I think so but then why am I getting nervous about writing this post? This is a fraught area of privilege, assumption, envy, fragility. I’m told I’m in a position of power even if it doesn’t always feel like it. I know I’ve got some reach for what I write, at least within a narrow community.
Over the past 20 years in San Francisco I went from negative net-worth grad student to Silicon Valley “Middle Class” (the 2%) to running a venture fund that, if we do our job, will ultimately put me in the 1% or better (in California the average annual household income of the 1% is an astounding $1.4m+). Over my career I’ve benefited from being in the right place at the right time, from being born TallWhiteMale and from working hard. 21 year old Hunter would be very happy to hear how 44 year old Hunter ended up, even if 44 year old Hunter is still a bit insecure.
[Deep breath] There are five conversations about money I’ve had with zero to a handful of people in private that I’ve been wanting to write about. [Another deep breath]
1. The Big Money Ball Bounces Semi-Randomly, Or At Least It Can Feel Like It
One of the things that’ll kill you is equating wealth with self-worth and constantly comparing yourself to your peer group. The money ball bounces too randomly around here and because of outsized returns from new ventures, being at the right company in the right role during the right few years can be worth $$$$$. Even though your equity is unlikely to make you rich, there are plenty examples of when it does to extraordinary levels. And it doesn’t always end up in the hands of diverse, hardest working or ethical people. We can – and should – continue working on changing that system, particularly with regards to pay gaps between the genders and between whites and underrepresented populations. But at a personal, human level you can’t let this eat you from the inside. Ensure you are treated fairly – never let an employer take advantage of you, make sure to get guidance on compensation, don’t be afraid to negotiate – but take a zen-like approach and reject envy. There’s always going to be some dumbfuck who lucked into a multimillion dollar payday. Don’t waste your energy on him.
2. Knowing There’s Another $20 In The Bank Never Stops Feeling Good
It would be an exaggeration to claim I’ve personally known poverty, but I have had zero dollars in my checking account and a negative net worth. It feels shitty even if the anxiety experienced was only a fraction of a percent that true struggle brings. It leaves a mark, one that you don’t forget. The easiest way to translate my own emotion is this: when I go to an ATM and take out a few $20 bills, there’s an accompanying endorphin surge tied to knowing there are many other $20 bills there for me if I need it. It’s like a low rent version of that Oprah story where she keeps a million dollars of cash on hand just to know she’ll never be poor again (or something like that).
What’s the takeaway from this parable? Just to realize that people experience – or are searching for – economic security in different ways based upon their own personal histories. And this influences in an emotional, sometimes irrational way, the types of decisions they make. When I hear “just start a company, you have nothing to lose” know it won’t ring as true to the realities many founders come from and what they need to overcome. Which brings me to…
3. Many People Are Supporting More Than Themselves. And Many Self-Made People Had Safety Nets.
I was lucky – my parents saved money for my college before my dad’s job disappeared in a corporate downsizing. That salary never came back. Having four years of school paid for in full already put me in rarified air especially as I met more and more classmates who were drawing major student loans to make their education possible.
Now, as an adult, I also see people who are supporting their parents, or their siblings, a nephew, and so on. The compensation needs of these folks might be different than a 24 year old who still has some help paying the rent. It’s why we counsel founders to understand the situation of a potential employee when designing a compensation package (in ways that remain legal and appropriate). Because maybe someone needs a little more stability in the short-term to make the transition possible. And you lose out on great talent if you can’t at least have these conversations. Don’t assume everyone can just eat ramen and sleep on vesting options. People will make sacrifices to work at your startup – seed companies don’t (and shouldn’t) pay the same cash comp as a Google – but if you’re “one-size-fits-all” then you’re less likely to build a diverse team.
4. How Do I Give My Daughter A Great Life But Instill Values & Appreciation?
I signed my daughter up for the major airlines frequent flyer programs when she was born. Might as well start earning free tickets right? The other day she received a mailing to participate in a private test drive event for the new Volvo SUV. My five year old apparently has the marketing profile of a 32 year old upper middle class mom!
Caroline (my wife) and I raise our daughter in SF because we want her to have a sense of community. Caroline is especially important here through her day job leading Twitter for Good (Twitter’s philanthropy and volunteerism effort) and a myriad of personal nonprofit activities. We do a lot of things to expose our kid to the idea of service, to generosity, to diversity. But she also eats organic blueberries and has too frequent Amazon deliveries of books, arts & crafts and Lego kits.
San Francisco has real challenges in its growth but I get sad when I hear people talk about how they don’t want to raise a kid here because of the homelessness and inequality. These are what we need to take a hand in solving! We don’t shield our daughter’s eyes from it; we answer her questions about sidewalk tents. But still, she’s been to Hawaii three times already. Did I mention the organic blueberries – $6 for six ounces – what the fuck!
I’m open to suggestions on this one. We’re just trying our best to instill compassion, work ethic and citizenship.
5. At Some Point It’s About Giving It Away
This afternoon a second-time entrepreneur told me he, at founding, gave most of his equity in his current company to a nonprofit he cares about. That it motivates him each day more than if he was just creating an outcome for himself. I LOVE THIS!
It feels like something is changing – people around me are giving more to political causes, putting their name next to causes. At the fringes I’m hearing more people take pride in their philanthropy and exert social pressure to their peers to donate. Am I naively optimistic? Are the next generation of bitcoin millionaires going to look to buy fifth cars and third homes? Or will we have more people like Halle Tecco and the anonymous Pineapple Fund?
Personally, I’ve got a number in my head – if I can bank that amount everything else is going towards philanthropy. Today, as a family, our charitable and political donations are between $15k-$30k annually. That’s down a bit from when I was vesting Google stock quarterly and could donate appreciated shares, but it’s still an ok percentage of our combined annual salaries. The tech sector is in a privileged position – can our generosity match our accomplishments?
[exhales]
Ok, those are the five $ conversations I have in private or have been afraid to have at all. Not sure I used all the right words or framed all the issues correctly. If there’s something I can learn more about or expose myself to a broader point of view, I’m open to feedback. Thanks!