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I fully agree with this. It’s not being “communistic” at all to pay a founder with kids a bit more. Rather, it’s about making sure he or she can actually focus

by ttul 9y ago

I fully agree with this. It’s not being “communistic” at all to pay a founder with kids a bit more. Rather, it’s about making sure he or she can actually focus on the business and outsource life’s overheads as necessary. Investors should take the time to look at a founder’s life circumstances, and set their pay to optimize time-at-work, even going so far as to pay a nanny and house keeper directly to ensure the founder isn’t wasting precious hours on household chores.

pcl 9y ago
> Investors should ... set their pay I understand the gist of what you’re saying, but in the early stages, investors might provide advice about salary but certainly shouldn’t be controlling salary. That’s the company’s job. Investors get to have a say about the CEO’s salary once they have board seats but not until then.
jkimmel 9y ago
> even going so far as to pay a nanny I really like this idea as a way to expand access to startup opportunities. Have any acceleartors/incubators experimented with offering child care? I imagine that economies of scale could make that more economical than having X% of each investment go to child care with no coordination, even if it was just a group-rate contract with a local child care center.
- jacobush 9y ago
  They have. It’s called “Sweden”. Works pretty well.
- brianwawok 9y ago
  Margins are pretty slim in child care. In most parts of the country, you aren't going to get a great group rate. I think you are better off just giving the person that needs childcare enough money so he can cover it...
sigi45 9y ago
I don't want to be the person who earns less than someone else just because they have kids and i don't. Perhaps someone decided to wait with kids because they want to have more time for the startup and/or more money left over for it.
- onion2k 9y ago
  I don't want to be the person who earns less than someone else just because they have kids and i don't. You really don't want to be the person who took more money out of your startup than necessary either though. That's what you're arguing in favour of - a higher burn rate and consequently less time for building your business in order for things to be 'fair'. If you're in that situation I'd recommend agreeing to track the difference and only pay it in the event of an exit, maybe with a multiple (say, double) to recognise the risk you took. That'd be better than increasing the burn rate just to make things equal.
  - charlesdm 9y ago
    I honestly don't think this reasoning makes sense. Most people raise investment because it shifts the risk ratio in their favour ("get paid to survive and work on their own idea"), at least in the early stages. If you're doing this, either: 1) both don't take any salary and use the raised money to build out the business (this is really how it should be), or 2) both take the same salary. All the rest makes no sense to me and will most likely cause friction, unless one of the founders is already wealthy.
an_d_rew 9y ago
I could not disagree more. Consider the following progression: I have kids, you don't. I "should" make more. I am trying to have kids, you already have them. My IVF treatments are expensive and mess up my partner to the point that it's expensive for me. I should make more. I am trying to adopt because my partner is infertile. That's a long and laborious and expensive procedure. I should make more. My partner and I want kids, but she's infertile because of ongoing chemo treatments. Life is rough. I should make more. My partner or I don't even think about kids because we have medical issues that we do not want to advertise. What does this have to do with my salary? The only sane way to answer the question of salary is "how replaceable are you, and what can they afford to pay?" Anything else can and likely will leave a festering wound that will affect the company later. In fact, a simple, approximate model for this phenomenon is inheritances split among siblings when parents die. It was (and is) quite common to have one sibling inherit more because they have had a difficult life in some way, or because boys should inherit more money than girls, or other such blather. It rips families apart. Do you really think that your startup will survive better?
- robhunter 9y ago
  I think you’re too focused on kids, specifically, when the real point is paying each founder enough to minimize personal stress for their individual situation (and not much more than that). Could be kids. Could be IVF treatments. Could be student debt. Could be geography. Could be past success/failure. Doesn’t really matter the specifics - kids are just one example - but paying founders enough so they can frugally live and not stress about their financial situation is the optimal choice, and it may result in differences in comp early on. If the founding team has a big problem with small inequalities in salary, there are bigger issues at play that will likely eventually surface.
  - charlesdm 9y ago
    Why not pay everyone the same? That extra 10k in a venture founded startup won't make much of a difference in the final outcome. But I guarantee you it will cause more friction than it's worth.
deleted 9y ago
[deleted]

by ttul 9y ago

pcl 9y ago

> Investors should ... set their pay I understand the gist of what you’re saying, but in the early stages, investors might provide advice about salary but certainly shouldn’t be controlling salary. That’s the company’s job. Investors get to have a say about the CEO’s salary once they have board seats but not until then.

jkimmel 9y ago

> even going so far as to pay a nanny I really like this idea as a way to expand access to startup opportunities. Have any acceleartors/incubators experimented with offering child care? I imagine that economies of scale could make that more economical than having X% of each investment go to child care with no coordination, even if it was just a group-rate contract with a local child care center.

jacobush 9y ago
They have. It’s called “Sweden”. Works pretty well.
brianwawok 9y ago
Margins are pretty slim in child care. In most parts of the country, you aren't going to get a great group rate. I think you are better off just giving the person that needs childcare enough money so he can cover it...

sigi45 9y ago

I don't want to be the person who earns less than someone else just because they have kids and i don't. Perhaps someone decided to wait with kids because they want to have more time for the startup and/or more money left over for it.

onion2k 9y ago
I don't want to be the person who earns less than someone else just because they have kids and i don't. You really don't want to be the person who took more money out of your startup than necessary either though. That's what you're arguing in favour of - a higher burn rate and consequently less time for building your business in order for things to be 'fair'. If you're in that situation I'd recommend agreeing to track the difference and only pay it in the event of an exit, maybe with a multiple (say, double) to recognise the risk you took. That'd be better than increasing the burn rate just to make things equal.
- charlesdm 9y ago
  I honestly don't think this reasoning makes sense. Most people raise investment because it shifts the risk ratio in their favour ("get paid to survive and work on their own idea"), at least in the early stages. If you're doing this, either: 1) both don't take any salary and use the raised money to build out the business (this is really how it should be), or 2) both take the same salary. All the rest makes no sense to me and will most likely cause friction, unless one of the founders is already wealthy.

an_d_rew 9y ago

I could not disagree more. Consider the following progression: I have kids, you don't. I "should" make more. I am trying to have kids, you already have them. My IVF treatments are expensive and mess up my partner to the point that it's expensive for me. I should make more. I am trying to adopt because my partner is infertile. That's a long and laborious and expensive procedure. I should make more. My partner and I want kids, but she's infertile because of ongoing chemo treatments. Life is rough. I should make more. My partner or I don't even think about kids because we have medical issues that we do not want to advertise. What does this have to do with my salary? The only sane way to answer the question of salary is "how replaceable are you, and what can they afford to pay?" Anything else can and likely will leave a festering wound that will affect the company later. In fact, a simple, approximate model for this phenomenon is inheritances split among siblings when parents die. It was (and is) quite common to have one sibling inherit more because they have had a difficult life in some way, or because boys should inherit more money than girls, or other such blather. It rips families apart. Do you really think that your startup will survive better?

robhunter 9y ago
I think you’re too focused on kids, specifically, when the real point is paying each founder enough to minimize personal stress for their individual situation (and not much more than that). Could be kids. Could be IVF treatments. Could be student debt. Could be geography. Could be past success/failure. Doesn’t really matter the specifics - kids are just one example - but paying founders enough so they can frugally live and not stress about their financial situation is the optimal choice, and it may result in differences in comp early on. If the founding team has a big problem with small inequalities in salary, there are bigger issues at play that will likely eventually surface.
- charlesdm 9y ago
  Why not pay everyone the same? That extra 10k in a venture founded startup won't make much of a difference in the final outcome. But I guarantee you it will cause more friction than it's worth.

deleted 9y ago

[deleted]