The founder of Friendster is very likely to be capable of being hired for a job, so the risk he took to his reputation was the risk of lower probability of beco

The founder of Friendster is very likely to be capable of being hired for a job, so the risk he took to his reputation was the risk of lower probability of becoming something other than an employee. Therefore, in comparison to an employee, the founder of Friendster remains on equivalent ground. He lost little if anything compared to an employee (a group of which he now belongs), so the risk was little and of low value in regards to personal reputation. In regards to money, that depends on the process. Did the startup function using the founders cash for a period of time that required a significant financial investment? If so, then there's significant risk on the part of the founder. If the startup functioned for a limited period of time on the founder's cash before receiving an investment that paid the founder as well as employees, then clearly there is little risk. Granted, the former scenario is the more likely.