5 ms·

How much of their own capital did the employees risk?

• mbca 11y ago
  Years of their skills and labor that could have been spent working at another company (including competitors).
• econner 11y ago
  If they exercised their options and paid tax then potentially a significant portion relative to their net worth.
• yabatopia 11y ago
  A few years of their lifes, an extremely limited and finite resource.
  • adventured 11y ago
    Since we're talking about specific sums of money, how much is that time worth? You have to put a number on it one way or another. If we wanted to be arbitrary about it, we could pretend that a janitor's time is worth a trillion dollars per hour because said janitor's time is a finite resource that can never be recovered. However that doesn't do much for you when you have to actually decide how to pay a janitor.
    • meric 11y ago
      The trick is he never mentioned what that time is worth. All he said was those few years of life was worth a few years, which were limited and finite. If we wanted to be arbitrary about it, we could pretend that a janitor's time is worth a trillion dollars per hour because said janitor's time is a finite resource that can never be recovered. However that doesn't do much for you when you have to actually decide how to pay a janitor. It sounds like as a serial entrepreneur you like to decide how to pay janitors, because you can buy a few years of their time for a relatively low cost that you can turn into wealth for yourself. When a janitor is working, he isn't working for $4 an hour or whatever it is you pay him. He's working for the rent & the food that will keep him alive, so that he will have time to continue to living, and that time is valuable to him. That's what he's getting paid, and that's why he's willing to work for you for $4. Just because it costs you nearly nothing to hire some people for an hour doesn't their time is worth only $4. It's worth a lot more than that. $4 can buy enough calories to last for days, and that time will be spent with his friends, family and his children(? possible if in India), and that's called "intrinsic goods", something money alone can never buy, because money only buys you time to acquire those goods.
• nerfhammer 11y ago
  directors rarely invest their own money in the company
  • prostoalex 11y ago
    For venture firms lack of GP's own money in the fund, though, is signaling "misaligned incentives". Some firms (Benchmark comes to mind) also have had funds where it was nothing but GP money, no LPs.
    • nerfhammer 11y ago
      Oh, I meant senior execs at the funded company, not the VC partners.