4 ms·

Those founders working their asses off that first year making 0 money and paying for servers and other expenses out of pocket as they slowly watch their bank ac

Those founders working their asses off that first year making 0 money and paying for servers and other expenses out of pocket as they slowly watch their bank accounts dwindle aren't doing themselves any monetary favors. Life's great if it works out, but 90+% of the time it doesn't, and a year's time and salary is a pretty big bet.

x5n1 11y ago
Many employees work very hard at startups juggling many different hats. I am sure it's possible to do a little bit of math to show that 1 year salary in a lifetime is not much risk at all, and in the end most employees take the same level of risk over a lifetime in terms of lost pay by joining startups or even companies that go bust, even if employees come later in the game; most startups fail. When they fail you have to find new employment which takes a few months. Add that over a lifetime, and employees that tend to work at startups easily lose a year or two of pay... had they instead worked for a large stable corporation with an actual career path. My point is not that founders don't deserve a pay out. My point is that if you get a huge payout, employees that made that happen deserve a good part of it. It's good for everyone involved and the economy at large. And the startup ecosystem. It keeps wealth from concentrating in a few hands who can then affect the masses adversely and the economy as well. More people with money is better than fewer people with money. Competition is what makes Capitalism work. And part of that competition comes from the fact that many people have wealth. Not just a few.
- AstroChimpHam 11y ago
  Agree they deserve a good part of it. My qualm is mostly around what "good" is. Employee #50 making $350k off a success doesn't feel like like a tragedy to me. If employee #5 made that at Box, I'd be upset too. I disagree strongly about your characterization of risk. Long run losing of $10k for 10 years is nothing like losing salary completely for a year. Unless you've been very good with money, taking a year with no salary in the Bay Area means Ramen. That year is also the start-up's most risky and the one with the least support. Most of the time when I hear these arguments it's from employees who have never tried founding. People who've tried both and know how difficult it is to keep yourself going for a year making nothing and trying to convince someone to pay for what you made don't think the equity split is unfair anymore-- even when they go back to being employees.

x5n1 11y ago

Many employees work very hard at startups juggling many different hats. I am sure it's possible to do a little bit of math to show that 1 year salary in a lifetime is not much risk at all, and in the end most employees take the same level of risk over a lifetime in terms of lost pay by joining startups or even companies that go bust, even if employees come later in the game; most startups fail. When they fail you have to find new employment which takes a few months. Add that over a lifetime, and employees that tend to work at startups easily lose a year or two of pay... had they instead worked for a large stable corporation with an actual career path. My point is not that founders don't deserve a pay out. My point is that if you get a huge payout, employees that made that happen deserve a good part of it. It's good for everyone involved and the economy at large. And the startup ecosystem. It keeps wealth from concentrating in a few hands who can then affect the masses adversely and the economy as well. More people with money is better than fewer people with money. Competition is what makes Capitalism work. And part of that competition comes from the fact that many people have wealth. Not just a few.

AstroChimpHam 11y ago
Agree they deserve a good part of it. My qualm is mostly around what "good" is. Employee #50 making $350k off a success doesn't feel like like a tragedy to me. If employee #5 made that at Box, I'd be upset too. I disagree strongly about your characterization of risk. Long run losing of $10k for 10 years is nothing like losing salary completely for a year. Unless you've been very good with money, taking a year with no salary in the Bay Area means Ramen. That year is also the start-up's most risky and the one with the least support. Most of the time when I hear these arguments it's from employees who have never tried founding. People who've tried both and know how difficult it is to keep yourself going for a year making nothing and trying to convince someone to pay for what you made don't think the equity split is unfair anymore-- even when they go back to being employees.