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I think the difference is that equity has the potential (even if it’s a small chance) to create a major qualitative change in your life. If you stand to make a

I think the difference is that equity has the potential (even if it’s a small chance) to create a major qualitative change in your life. If you stand to make a million over 8 years anyway, another 400k is nice but won’t change your life that much. Maybe you buy a slightly bigger house or you retire a few years earlier. But a homerun outcome in a startup can mean complete financial freedom and never needing to work again. It’s the long tail, sure, but given that there are other benefits to a startup (learning more, more influence, etc.), a lot of people prefer that long shot to the certainty of being marginally wealthier. I also don’t think it’s really comparable to the lottery. It’s like playing the lottery if you could easily afford to have a 1-5% chance of winning... in which case it wouldn’t be such a bad idea to play for many people. Different strokes for different folks and all that, but I do think it’s wrong to imply that it’s always wrong to take a calculated risk like this when given the opportunity.

gtowey 8y ago
> I also don’t think it’s really comparable to the lottery. It’s like playing the lottery if you could easily afford to have a 1-5% chance of winning... in which case it wouldn’t be such a bad idea to play for many people. Really? Roulette has odds of 37:1 for a single number which is about a 2.7% chance. Would you take $300k that you could otherwise earn in salary and place it all on a single number? The payout would be 10.5 million which far more than anyone I know expects to get from their stock options even with a pretty good outcome. You'd still be insane to walk into a casino in Vegas and make that bet.
- danenania 8y ago
  I would, assuming that if I lost: - I could pay off the 300k over the next 8 years. - The loss would be tax-deductible. - I could somehow know for sure I'd have a job where I'd still net at least 120k per year during that period (after the loss). - It would somehow grant me multiple years-worth of extremely valuable skills and experience, new friends and connections, and the chance to be intellectually challenged and satisfied. I think that would definitely be the most popular roulette wheel in Vegas!
  - bigcostooge2 8y ago
    Tax deductibility is your sticking point? Go do it with 30k. 1M payout, and you won’t go broke.

gtowey 8y ago

> I also don’t think it’s really comparable to the lottery. It’s like playing the lottery if you could easily afford to have a 1-5% chance of winning... in which case it wouldn’t be such a bad idea to play for many people. Really? Roulette has odds of 37:1 for a single number which is about a 2.7% chance. Would you take $300k that you could otherwise earn in salary and place it all on a single number? The payout would be 10.5 million which far more than anyone I know expects to get from their stock options even with a pretty good outcome. You'd still be insane to walk into a casino in Vegas and make that bet.

danenania 8y ago
I would, assuming that if I lost: - I could pay off the 300k over the next 8 years. - The loss would be tax-deductible. - I could somehow know for sure I'd have a job where I'd still net at least 120k per year during that period (after the loss). - It would somehow grant me multiple years-worth of extremely valuable skills and experience, new friends and connections, and the chance to be intellectually challenged and satisfied. I think that would definitely be the most popular roulette wheel in Vegas!
- bigcostooge2 8y ago
  Tax deductibility is your sticking point? Go do it with 30k. 1M payout, and you won’t go broke.