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I agree with a lot of this. One thing to note is that with this model the recruiter is incentivized for you to take the highest paying job, maybe not the best j

I agree with a lot of this. One thing to note is that with this model the recruiter is incentivized for you to take the highest paying job, maybe not the best job for you. As stupid as that may sound (because everyone generally wants to make more money), it also means the first high paying job offer you get, they will probably push very hard (against your own interest) for you to accept it. That's the only way they'll make money. If insiders (like at The Lobby) are just paid for their time and insights, then there's no added or alternate motive. I still think the % of salary model is very interesting, but there are probably challenges to it that aren't visible externally. Check out what happened to MissionU, a venture-backed free 1-year college alternative that took a % of your salary: https://www.edsurge.com/news/2018-05-30-acquisition-autopsy-details-and-questions-behind-missionu-s-4m-sale-to-wework https://www.edsurge.com/news/2018-05-30-acquisition-autopsy-... They had the best possible founder to do this and $11m in VC-funding, but shut down after their 1st cohort.

Invictus0 8y ago
To be fair, they didn't shut down so much as the founder sold out.
- dchhugani 8y ago
  I don't know the details, will trust you on it :)!
- mmt 8y ago
  I have trouble understanding what significance the "so much as" means, nor even the "sold out", since it appears to have been an acqui-hire, with the (cash) assets being returned to investors. The company did shut down. We can only speculate on the founder's motivation.
  - resu_nimda 8y ago
    Usually, "shut down" implies that the company failed. And usually, when VCs give you $11M, it is not with the expectation that you will simply return that amount a year later. You have sold them on the idea that you care about your startup and you actually want to see it grow and succeed. It says right in the article that WeWork offered the founder $5M in comp and "reactions from the company’s investors have included surprise, disappointment and a desire to forget the deal ever happened." If that's not selling out, I don't know what is. Not that I'm particularly worried about those poor VCs, in fact maybe they should hire the guy, great demonstration of unprincipled opportunism.
    - mmt 8y ago
      > Usually, "shut down" implies that the company failed. Of course it failed, from the standpoint of the VCs, at least. It just didn't run out of cash. That doesn't say anything one way or the other about the business model of taking a percentage of salary, which is what is under discussion. > It says right in the article that WeWork offered the founder $5M in comp Again, not particularly relevant, other than an indication that the founder thought that money "now" was a much better deal than risking it on that startup's business model. > If that's not selling out, I don't know what is. I'm not confused as to the usual meaning of the term. I'm just confused at to the significance to the conversation. > unprincipled opportunism. Even this doesn't make any sense to me, since the primary principle at play is making money, on all sides. Nobody was swindled here. Investment in startups hardly translates to indentured servitude.
      - resu_nimda 8y ago
        I misread your comment, I didn't understand you were asking how the exit is relevant to the business model, and you're right, it's not. the primary principle at play is making money, on all sides Well the thing is that, when pitching or promoting their companies, and especially when rallying employees, startup founders pay a lot of lip service to other things like "the vision," "the mission," and "changing the world." They don't say "by the way guys I'll happily disband this whole thing the instant someone offers me a wad of cash." But yes, for those who agree that making a personal fortune fully trumps every other principle one holds, this behavior is fine and rational.
        mmt 8y ago
        > when pitching or promoting their companies ...and the whole point of pitching or promoting a company is...making money! > "changing the world." That isn't falsified by putting 5 million dollars in exchange for dropping a VC-funded startup. It may well be easier to change the world with that kind of money absent the attached strings. > They don't say "by the way guys I'll happily disband this whole thing the instant someone offers me a wad of cash." Well, a big enough wad of cash. They don't have to. This is one of those "well duh" situations. This is actually a business risk, that one or more of your key/critical employees will get lured by an offer they can't refuse. (As I keep trying to keep this on-topic) This is particlarly so for founders with unproven business models, who VCs might otherwise pressure into much less attractive equity/control positions. > fully trumps every other principle one holds This is a strawman. You've implied violation of principles you hold (without stating them outright) but haven't demostrated violation of any of that founder's principles. I've pointed out at least one that we can presume that was upheld, in the return of assets.

Invictus0 8y ago

To be fair, they didn't shut down so much as the founder sold out.

dchhugani 8y ago
I don't know the details, will trust you on it :)!
mmt 8y ago
I have trouble understanding what significance the "so much as" means, nor even the "sold out", since it appears to have been an acqui-hire, with the (cash) assets being returned to investors. The company did shut down. We can only speculate on the founder's motivation.
- resu_nimda 8y ago
  Usually, "shut down" implies that the company failed. And usually, when VCs give you $11M, it is not with the expectation that you will simply return that amount a year later. You have sold them on the idea that you care about your startup and you actually want to see it grow and succeed. It says right in the article that WeWork offered the founder $5M in comp and "reactions from the company’s investors have included surprise, disappointment and a desire to forget the deal ever happened." If that's not selling out, I don't know what is. Not that I'm particularly worried about those poor VCs, in fact maybe they should hire the guy, great demonstration of unprincipled opportunism.
  - mmt 8y ago
    > Usually, "shut down" implies that the company failed. Of course it failed, from the standpoint of the VCs, at least. It just didn't run out of cash. That doesn't say anything one way or the other about the business model of taking a percentage of salary, which is what is under discussion. > It says right in the article that WeWork offered the founder $5M in comp Again, not particularly relevant, other than an indication that the founder thought that money "now" was a much better deal than risking it on that startup's business model. > If that's not selling out, I don't know what is. I'm not confused as to the usual meaning of the term. I'm just confused at to the significance to the conversation. > unprincipled opportunism. Even this doesn't make any sense to me, since the primary principle at play is making money, on all sides. Nobody was swindled here. Investment in startups hardly translates to indentured servitude.
    - resu_nimda 8y ago
      I misread your comment, I didn't understand you were asking how the exit is relevant to the business model, and you're right, it's not. the primary principle at play is making money, on all sides Well the thing is that, when pitching or promoting their companies, and especially when rallying employees, startup founders pay a lot of lip service to other things like "the vision," "the mission," and "changing the world." They don't say "by the way guys I'll happily disband this whole thing the instant someone offers me a wad of cash." But yes, for those who agree that making a personal fortune fully trumps every other principle one holds, this behavior is fine and rational.
      - mmt 8y ago
        > when pitching or promoting their companies ...and the whole point of pitching or promoting a company is...making money! > "changing the world." That isn't falsified by putting 5 million dollars in exchange for dropping a VC-funded startup. It may well be easier to change the world with that kind of money absent the attached strings. > They don't say "by the way guys I'll happily disband this whole thing the instant someone offers me a wad of cash." Well, a big enough wad of cash. They don't have to. This is one of those "well duh" situations. This is actually a business risk, that one or more of your key/critical employees will get lured by an offer they can't refuse. (As I keep trying to keep this on-topic) This is particlarly so for founders with unproven business models, who VCs might otherwise pressure into much less attractive equity/control positions. > fully trumps every other principle one holds This is a strawman. You've implied violation of principles you hold (without stating them outright) but haven't demostrated violation of any of that founder's principles. I've pointed out at least one that we can presume that was upheld, in the return of assets.