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> Employees take the most risk today. Not the investors or the founders — it’s the employees. I agree that in many places employees should be given more option
by austenallred 11y ago
> Employees take the most risk today. Not the investors or the founders — it’s the employees.
I agree that in many places employees should be given more options and better compensation. I also agree that many founders don't realize how large the opportunity cost for talented people can be. But I also think that statement is categorically false.
Most founders I know work for several months (or years) for zero pay, and then pay themselves the minimum amount possible while the company is growing. The founders have opportunity cost too, and if the company fails they get nothing, too. Using the superlative that employees are taking the most risk is often simply not true.
- hartator 11y agoTrue, usually founder risks > employee risks, but I do agree that employee risks are often down played.
- geebee 11y agoBut is this true relative to the reward? It of course depends greatly on the individual. A senior SE who walks away from an offer at Google or Netflix to work for a startup could be forgoing as much as 100k a year in salary. Five years in that dev might have banked a half mil. Yes the founders are giving up a lot too bit the equity they receive may be vastly higher. It all depends on the numbers but adjusted for reward and equity? Yeah by that measurement I'd say its certainly possible that an early engineer is taking on the worst risk to reward ratio. Lastly keep in mind that a founder who does not have strong tech skills may not be giving up as much in potential salary even if he or she works for "free". Again this all depends on the individual.