3 ms·
Most startups offer lower salaries and compensate in other ways. This is a risk. If you work at such a startup employees and founders likely take on more risk
by sbov 10y ago
Most startups offer lower salaries and compensate in other ways. This is a risk. If you work at such a startup employees and founders likely take on more risk than your average VC because the VC can hedge their bets. Employees and founders have no way to do this.
Edit: I wouldn't necessarily say each individual employee takes on more risk than the VC. But I would definitely say that, on the whole, they do. A startup that "almost makes it" can be a life & opportunity cost sucking endeavor for employees, VCs don't have to worry about that as much because they have their fingers in a lot of pies.
- jartelt 10y agoMost well-funded large startups offer salaries close to market rate. Sure there is the risk that the equity can end up worth $0, but the salaries can easily be >$100,000. Even if theranos employees took a pay cut to work there (compared working at an established company), I am sure they derived extra value from the perks of working there and from working on a mission they believed in (or at least they thought they believed in...).