Startup vs FAANG: Which is Better for Your Career in 2025?

You're choosing between:

Startup: Exciting, fast-paced, equity upside (but risky)
FAANG: Stable, high salary, resume boost (but bureaucratic)

Both paths can lead to $500K+ TC, but they're completely different experiences.

This guide compares startups vs FAANG across compensation, learning, work-life balance, and long-term career prospects—with advice from engineers who've done both.

TL;DR: Join FAANG early career (0-5 YOE) to build skills and credibility. Switch to startups mid-career (5-10 YOE) for equity upside and ownership.

Compensation: FAANG Pays More (Usually)

Cash Compensation (Base + Bonus):

Experience	Startup (Series A-C)	FAANG	Winner
Entry (0-2 YOE)	$80K-$120K	$150K-$200K	FAANG (+$50K)
Mid (3-5 YOE)	$120K-$160K	$180K-$250K	FAANG (+$70K)
Senior (6-10 YOE)	$150K-$200K	$200K-$300K	FAANG (+$100K)

Winner: FAANG (higher cash comp = financial stability)

Total Compensation (Cash + Equity):

Experience	Startup TC	FAANG TC	Winner
Entry	$100K-$150K	$180K-$250K	FAANG
Mid	$150K-$250K	$250K-$400K	FAANG
Senior	$200K-$350K	$350K-$600K	FAANG

But wait: Startup equity could be worth $0 or $5M+ (more on this below).

Equity: Startups Have 100x Upside (But 90% Fail)

FAANG Equity:

Predictable: Vest over 4 years, liquid on day 1
Safe: Public stock (can sell anytime)
Limited upside: FAANG stock grows 10-30%/year

Example (Google L5):

$200K RSUs over 4 years
Stock grows 20%/year → $240K after 4 years
Total gain: $40K

Startup Equity:

Risky: 90% of startups fail (equity → $0)
Illiquid: Can't sell until IPO/acquisition (5-10 years)
Massive upside: If startup goes from $1B → $10B valuation, your 0.5% equity = $50M

Example (Senior engineer at Series B):

0.3% equity at $500M valuation = $1.5M paper value
If IPO at $5B: $15M (10x) 🚀
If acquired at $2B: $6M (4x)
If company fails: $0 💀

Winner: Depends on risk tolerance:

Risk-averse: FAANG (predictable)
Risk-seeking: Startup (moonshot potential)

Learning & Growth: Startups Win

At FAANG:

Work on one small part of a massive system
Example: "I optimized a caching layer for YouTube recommendations"
Breadth: Limited (deep specialization)
Mentorship: High (senior engineers everywhere)
Tech stack: Often legacy (PHP at Meta, Java at Google)

At Startups:

Own entire features end-to-end
Example: "I built the payments system from scratch"
Breadth: High (full-stack, DevOps, product decisions)
Mentorship: Low (small teams, less experienced engineers)
Tech stack: Modern (Rust, Go, Kubernetes, latest frameworks)

Winner: Startups (faster learning, more ownership)

Work-Life Balance: FAANG Wins Big

FAANG:

Hours: 40-50/week (varies by team)
Oncall: Rare (except SRE teams)
Vacation: Unlimited PTO (average: 15-20 days/year)
Burnout risk: Low-Medium

Best FAANG for WLB: Microsoft (8.5/10), Google (8/10)
Worst FAANG for WLB: Amazon (5/10), Meta (6.5/10)

Compare FAANG work-life balance

Startups:

Hours: 50-70/week (especially pre-PMF)
Oncall: Frequent (everyone is oncall)
Vacation: "Unlimited" (but pressure to not take it)
Burnout risk: High (55% of startup engineers burn out within 2 years)

Best startups for WLB: Later-stage (Series C+), profitable companies
Worst for WLB: Pre-seed to Series A (chaos mode)

Winner: FAANG (way better work-life balance)

Job Security: FAANG is Safer (But Not Bulletproof)

FAANG Layoffs (2023-2024):

Meta: 21,000 laid off (25% of workforce)
Google: 12,000 laid off (6% of workforce)
Amazon: 27,000 laid off (9% of workforce)
But: Engineers with strong performance reviews mostly safe

Startup Failure Rates:

Series A: 60% fail within 5 years
Series B: 40% fail
Series C+: 20% fail (but layoffs common if growth slows)

Winner: FAANG (more stable, but not immune to layoffs)

Resume Value: FAANG Opens More Doors

FAANG on Resume:

Credibility: Instantly pass resume screens at 90% of companies
Network: Work with top 1% engineers
Future opportunities: Can join any startup as senior/staff

Browse 200K+ tech jobs requiring FAANG experience

Startup on Resume:

Credibility: Depends on startup's name recognition
Network: Smaller but tighter-knit
Future opportunities: Easier to join other startups (but harder to get into FAANG later)

Winner: FAANG (stronger brand value)

Career Path Examples (Real Stories)

Path 1: FAANG → Startup (Most Common)

Example: Alice

Year 0-3: Google L4 ($300K TC)
Year 4-7: Stripe (Senior, $400K TC)
Year 8: Join Series B startup as Staff (0.5% equity)
Year 12: Startup IPOs, equity → $10M

Outcome: Built credibility at FAANG, then bet equity at startup.

Path 2: Startup → FAANG (Risky but Possible)

Example: Bob

Year 0-4: Series A startup ($120K TC, 0.8% equity)
Year 4: Startup fails, equity → $0
Year 5: Joins Amazon L5 ($350K TC)
Year 10: Amazon L6 ($500K TC)

Outcome: Startup experience helped him land L5 at Amazon (not L4).

Path 3: All FAANG (Stable)

Example: Charlie

Year 0-4: Google L3 → L4 ($200K → $300K)
Year 5-8: Meta E5 ($450K)
Year 9+: Netflix Senior ($600K+)

Outcome: Optimized for cash comp, minimal risk.

Winner: No "best" path—depends on your risk tolerance and goals.

Startup Stages: Which to Join?

Pre-Seed to Series A (Highest Risk, Highest Reward)

Equity: 0.5-2% (huge percentage)
Salary: $80K-$140K (below market)
Risk: 70% chance of failure
Upside: If $1B exit, your 1% = $10M

Join if: You believe in the mission and can afford low salary.

Series B-C (Medium Risk, Medium Reward)

Equity: 0.1-0.5%
Salary: $120K-$180K (closer to market)
Risk: 40% chance of failure
Upside: If $5B exit, your 0.3% = $15M

Join if: Company has product-market fit and strong funding.

Late-Stage / Unicorns (Low Risk, Lower Reward)

Equity: 0.01-0.1%
Salary: $150K-$250K (at or above market)
Risk: 20% chance of failure
Upside: If $10B exit, your 0.05% = $5M

Join if: You want startup culture without extreme risk.

Examples: Stripe, Databricks, OpenAI, Anthropic

How to Evaluate a Startup Offer

Red Flags 🚩:

No product-market fit (still searching for customers)
Founder drama (Google the founders on Blind)
Short runway (< 12 months of cash)
Below-market salary + low equity (0.05% at Series C)
Vague equity details (won't share cap table or strike price)

Green Flags ✅:

Strong revenue growth (3x YoY)
Top-tier VCs (Sequoia, a16z, Founders Fund)
Experienced founders (2nd/3rd-time founders with exits)
Healthy runway (18+ months of cash)
Fair equity (0.3-1% for senior roles at Series B)

Pro tip: Use Levels.fyi Startup Calculator to value your equity offer.

Compensation Breakdown: Real Examples

FAANG Senior Engineer (L5/E5):

Base salary: $200K
Bonus: $30K (15%)
RSUs: $200K/year (vesting)
Total TC: $430K
After 4 years: ~$1.7M earned

Startup Senior Engineer (Series B):

Base salary: $170K
Bonus: $0 (most startups don't pay bonuses)
Equity: 0.3% at $500M valuation = $1.5M paper value
Total TC: $170K cash + $1.5M equity (illiquid)
If 5x IPO in 5 years: $170K × 5 years = $850K cash + $7.5M equity = $8.35M total 🚀
If startup fails: $170K × 5 years = $850K cash + $0 equity

Expected value (assuming 40% success rate):

$8.35M × 40% + $850K × 60% = $3.85M (higher than FAANG!)

But: Most people can't afford the risk of $0 equity.

When to Join a Startup vs FAANG

Join FAANG if:

✅ You're early career (0-5 YOE)
✅ You have student loans or financial dependents
✅ You want work-life balance
✅ You want to learn from the best engineers
✅ You want a strong resume credential

Browse FAANG jobs (5,000+ openings)

Join a Startup if:

✅ You're mid-career (5-10 YOE) with FAANG experience
✅ You have financial runway (can afford lower salary)
✅ You want ownership and fast learning
✅ You believe in the startup's mission
✅ You're okay with 50-70 hour weeks

Browse startup jobs (50,000+ openings)

Hybrid Path: Best of Both Worlds

The "Optimal" Career Path (According to Data):

Years 0-3: Join FAANG (learn from the best, build credibility)
Years 4-7: Join late-stage startup (e.g., Stripe, Databricks)
Years 8-12: Join Series A-B startup with high upside
Years 13+: Start your own company or join as founding engineer

Why this works:

FAANG gives you skills + network
Late-stage startup gives you equity + ownership
Early-stage startup gives you massive upside
By then, you've built enough wealth to take risks

Tax Implications (Often Overlooked)

FAANG RSUs:

Taxed as income (30-50% depending on state)
No AMT risk (Alternative Minimum Tax)
Liquid: Can sell immediately

Startup ISOs (Incentive Stock Options):

AMT risk: Exercising can trigger huge tax bill (even if shares are worthless)
Long-term capital gains: If held 2+ years, taxed at 15-20% (vs 30-50%)
83(b) election: File within 30 days to save on taxes

Pro tip: Consult a CPA before exercising startup options (can save you $100K+ in taxes).

Famous Examples

FAANG Lifers:

Jeff Dean (Google): Joined 1999, now Google Senior Fellow (est. $500M+ net worth from stock)
Sheryl Sandberg (Meta): Joined 2008, made $2B from RSUs

Startup Winners:

Early Stripe employees: 0.5% equity → $50M+ at $95B valuation
Early Airbnb engineers: 0.3% equity → $30M+ at $100B IPO

Startup Losers:

WeWork employees: Equity went from $47B → $0 in 2 years
90% of Series A engineers: Equity → $0 (company failed)

Bottom line: FAANG is safer, startups have higher variance.

Final Decision Framework

Use this decision tree:

Do you have < 3 years of experience?

YES → Join FAANG (build skills + credibility)
NO → Continue

Do you have financial runway (6+ months savings)?

NO → Join FAANG (need stable income)
YES → Continue

Do you believe startup will be worth $1B+?

NO → Join FAANG
YES → Continue

Is the startup Series B+ with strong revenue?

NO → Join FAANG (too risky)
YES → Join the startup! 🚀

Browse Jobs

FAANG Jobs:

Top Startups Hiring:

Stripe, Databricks, OpenAI, Anthropic, Scale AI

Browse all 200K+ tech jobs →

Final Thoughts

There's no "right" answer—just trade-offs:

FAANG = stability + cash
Startup = ownership + upside

Our advice: Join FAANG early career, then switch to startups once you have financial security and credibility.

Good luck! 🚀

Last updated: January 2025
Data: Levels.fyi, AngelList, Blind, Carta (startup equity data)