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Except of course tech entrepreneurs of today mostly do not invest their own capital, and therefore do not incur much personal risk.

chepaslaaa 9y ago
The time tech entrepreneurs spend on building software that may or may not become a viable product is worth a fuckton of money.
- throwaway84742 9y ago
  As someone who has been there, I’ll tell you more: I got paid with investor money, like majority of other folks in tech startups. It was maybe 1/3rd of what I’d get from an established company, but still enough to pay mortgage and provide for a family of 3. Where do you think that seed capital goes? To pay the founders and whoever they manage to hire.
  - PeterisP 9y ago
    But that's the point - 2/3 of what you'd get from an established company, multiplied by a few years, is a very large amount of money. If "maybe 1/3rd of what I’d get from an established company" was enough to pay mortgage and provide for a family of 3, then in the "not doing a startup" scenario you'd have earned&saved that money, and you effectively lose it if your startup doesn't work out.
    - throwaway84742 9y ago
      Sure, but it’s not like I was living under a bridge or anything. My standard of living did not change one iota. The stereotype of a starving founder is just not true most of the time. In fact I’ve yet to meet a founder who did not pay him/herself a pretty good upper middle class living wage. Not millions, natch, but still six figures.
      - ithinkinstereo 9y ago
        That's because you've only met vc-backed founders, I.e., founders gambling with other people's money. Many bootstrapped founders go years paying themselves massively below market to fuel the rocket ship so to speak. Would you make the same choice if the money came from your own savings or those of close friends and family?
      - PeterisP 9y ago
        The point is not about living under a bridge or starving, the point is that this should be considered equivalent in most terms (except tax-wise) to earning your market-rate salary and choosing to invest 2/3 of that cash into the startup. No matter how much you have left, the consideration of whether it's a good deal or not should include that choice to "spend" that amount of (potential) money on the startup versus whatever you would have done with that money otherwise. If you wouldn't have done anything, then there's choice of spending a few years on the startup versus having, say, half a million of savings for retirement.
        dividezero 9y ago
        I agree. Its a risk of opportunity cost
- marssaxman 9y ago
  Imaginary money you can't spend on anything, sure. All of the time I have spent trying to build software at large, stable, safe companies has been wasted. Most of the time I have spent trying to build software at startups has been wasted, too. That's life in a field as young and uncertain as ours: most of what you do will turn out to be a waste of time. So, what's that time actually worth? Same as what that software is actually worth: nothing, usually.
  - eecc 9y ago
    Not quite that imaginary. The opportunity cost is about 70-80k€ for a perm position, about 120 for freelancing. Plus the savings you’ll have to burn through. That’s a fuckton in my book
    - marssaxman 9y ago
      Well, sure, but if that's your measure of worth, then what are you doing making software? Go work in finance or insurance instead - that's where the real money is.
  - deleted 9y ago
    [deleted]
Radim 9y ago
Hey, hey. Some of us actually bootstrapped our companies, effectively paying people (incl. ourselves) from our own pocket :-) For some, the risk/independence trade-off doesn't stop at "VC's bitch".
- osrec 9y ago
  Indeed, I was in the same boat - funding out of my own pocket. Now I still have full control of all my equity, which of course feels great. Otherwise, you risk becoming a glorified employee again and the control you worked hard for slowly fades away.
- throwaway84742 9y ago
  Sure, there are some who bootstrap. But the vast majority do not.
  - eloff 9y ago
    Source? I think one would find that most tech entrepreneurs are not backed by VC capital. VCs only invest in certain kinds of businesses that have the potential to grow to at least ten million dollars. YC looks for potential billion dollar companies. The VC business model just doesn't work for smaller businesses, which are probably the majority of tech businesses.
majani 9y ago
VC backed startups are only about 1% of the total: https://www.entrepreneur.com/article/230011 https://www.entrepreneur.com/article/230011

chepaslaaa 9y ago

The time tech entrepreneurs spend on building software that may or may not become a viable product is worth a fuckton of money.

throwaway84742 9y ago
As someone who has been there, I’ll tell you more: I got paid with investor money, like majority of other folks in tech startups. It was maybe 1/3rd of what I’d get from an established company, but still enough to pay mortgage and provide for a family of 3. Where do you think that seed capital goes? To pay the founders and whoever they manage to hire.
- PeterisP 9y ago
  But that's the point - 2/3 of what you'd get from an established company, multiplied by a few years, is a very large amount of money. If "maybe 1/3rd of what I’d get from an established company" was enough to pay mortgage and provide for a family of 3, then in the "not doing a startup" scenario you'd have earned&saved that money, and you effectively lose it if your startup doesn't work out.
  - throwaway84742 9y ago
    Sure, but it’s not like I was living under a bridge or anything. My standard of living did not change one iota. The stereotype of a starving founder is just not true most of the time. In fact I’ve yet to meet a founder who did not pay him/herself a pretty good upper middle class living wage. Not millions, natch, but still six figures.
    - ithinkinstereo 9y ago
      That's because you've only met vc-backed founders, I.e., founders gambling with other people's money. Many bootstrapped founders go years paying themselves massively below market to fuel the rocket ship so to speak. Would you make the same choice if the money came from your own savings or those of close friends and family?
    - PeterisP 9y ago
      The point is not about living under a bridge or starving, the point is that this should be considered equivalent in most terms (except tax-wise) to earning your market-rate salary and choosing to invest 2/3 of that cash into the startup. No matter how much you have left, the consideration of whether it's a good deal or not should include that choice to "spend" that amount of (potential) money on the startup versus whatever you would have done with that money otherwise. If you wouldn't have done anything, then there's choice of spending a few years on the startup versus having, say, half a million of savings for retirement.
      - dividezero 9y ago
        I agree. Its a risk of opportunity cost
marssaxman 9y ago
Imaginary money you can't spend on anything, sure. All of the time I have spent trying to build software at large, stable, safe companies has been wasted. Most of the time I have spent trying to build software at startups has been wasted, too. That's life in a field as young and uncertain as ours: most of what you do will turn out to be a waste of time. So, what's that time actually worth? Same as what that software is actually worth: nothing, usually.
- eecc 9y ago
  Not quite that imaginary. The opportunity cost is about 70-80k€ for a perm position, about 120 for freelancing. Plus the savings you’ll have to burn through. That’s a fuckton in my book
  - marssaxman 9y ago
    Well, sure, but if that's your measure of worth, then what are you doing making software? Go work in finance or insurance instead - that's where the real money is.
- deleted 9y ago
  [deleted]

Radim 9y ago

Hey, hey. Some of us actually bootstrapped our companies, effectively paying people (incl. ourselves) from our own pocket :-) For some, the risk/independence trade-off doesn't stop at "VC's bitch".

osrec 9y ago
Indeed, I was in the same boat - funding out of my own pocket. Now I still have full control of all my equity, which of course feels great. Otherwise, you risk becoming a glorified employee again and the control you worked hard for slowly fades away.
throwaway84742 9y ago
Sure, there are some who bootstrap. But the vast majority do not.
- eloff 9y ago
  Source? I think one would find that most tech entrepreneurs are not backed by VC capital. VCs only invest in certain kinds of businesses that have the potential to grow to at least ten million dollars. YC looks for potential billion dollar companies. The VC business model just doesn't work for smaller businesses, which are probably the majority of tech businesses.

majani 9y ago

VC backed startups are only about 1% of the total: https://www.entrepreneur.com/article/230011 https://www.entrepreneur.com/article/230011