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This is all valid if you need a GmbH. But if you are building a website you can do without. Which risk do those students take that cannot be stomached? On the

This is all valid if you need a GmbH. But if you are building a website you can do without. Which risk do those students take that cannot be stomached? On the other hand, since you have 25k, where else but in your startup can you invest your money and expect high profits? If anything, your family does not only rely on you but you can rely on your family to start a company. Your children depend on you showing them how to take risks and be successful.

fluffything 6y ago
> This is all valid if you need a GmbH. But if you are building a website you can do without. If you are doing that alone sure, but if you need to hire people and only have equity to pay them, things will get sketchy quickly without some kind of legal entity. > On the other hand, since you have 25k, where else but in your startup can you invest your money and expect high profits? If anything, your family does not only rely on you but you can rely on your family to start a company. Your children depend on you showing them how to take risks and be successful. High profits are the reward for high risk, and high risks do by necessity materialize very often - otherwise they wouldn't be high. Also, high risks aren't necessarily rewarded with high profits - there are many risks that just aren't worth taking. Those are the true lessons for the children: assess the risk, asses the profits, and decide whether taking the risk is worth it _for you_. Every person is different and has a different risk tolerance, there is no right answer to the question of whether a risk is worth taking. A 25 year old joining a startup is taking a smaller risk than a 30 year old simply because they are investing less (their time is worth less, they have less to lose, etc.). The profits are also higher for a 25 year old: 1 year of failed startup experience at 25 can have a huge impact on your human capital long term - if you are a manager at 30, and jump to a startup that fails people will just think that you hugely miscalculated a risk. That might actually hurt your human capital.
- toohotatopic 6y ago
  >and only have equity to pay them There are legal forms to share a company that are not a GmbH but come with personal liabilities. There is also always the option to use an English Ltd or that Swedish form. >there is no right answer to the question of whether a risk is worth taking. I tend to disagree. Multiply the risk with the expected profits. Unlike extreme sports, death is not part of the outcome unless you invest in drugs. It's not about thrills and crossing boundaries. If the expected profits are the highest, a risky investment is the reasonable choice, no matter the size of the risk. Regarding the age, a 25 year old has the most to lose. Until 26 or 27, the brain has the biggest capacity for development. Wasting those years on something profitable but non-educative is a waste of potential. On the other hand, most successful companies are created by older founders because they have the experience and network to be able to succeed. The 30 year old manager on the other hand hasn't even reached the middle of his life. What if he runs a project in his company that fails? Will he have to prevent mistakes at all costs? Will he ever be able to manage instead of having to cover his ass for further 30 years? By focussing on what he could lose, he is wasting all the opportunities in his life. People who think like that shouldn't start a company. High profits don't come from high risks. As you say, if you only have the option between high profit, high risk and low profit, low risk, then it is all about risk preference. However, it's all about information asymmetry. Once you know a market and you see an opportunity, that means the risk is lower or the profits are higher than any other market participants assumes.

fluffything 6y ago

> This is all valid if you need a GmbH. But if you are building a website you can do without. If you are doing that alone sure, but if you need to hire people and only have equity to pay them, things will get sketchy quickly without some kind of legal entity. > On the other hand, since you have 25k, where else but in your startup can you invest your money and expect high profits? If anything, your family does not only rely on you but you can rely on your family to start a company. Your children depend on you showing them how to take risks and be successful. High profits are the reward for high risk, and high risks do by necessity materialize very often - otherwise they wouldn't be high. Also, high risks aren't necessarily rewarded with high profits - there are many risks that just aren't worth taking. Those are the true lessons for the children: assess the risk, asses the profits, and decide whether taking the risk is worth it _for you_. Every person is different and has a different risk tolerance, there is no right answer to the question of whether a risk is worth taking. A 25 year old joining a startup is taking a smaller risk than a 30 year old simply because they are investing less (their time is worth less, they have less to lose, etc.). The profits are also higher for a 25 year old: 1 year of failed startup experience at 25 can have a huge impact on your human capital long term - if you are a manager at 30, and jump to a startup that fails people will just think that you hugely miscalculated a risk. That might actually hurt your human capital.

toohotatopic 6y ago
>and only have equity to pay them There are legal forms to share a company that are not a GmbH but come with personal liabilities. There is also always the option to use an English Ltd or that Swedish form. >there is no right answer to the question of whether a risk is worth taking. I tend to disagree. Multiply the risk with the expected profits. Unlike extreme sports, death is not part of the outcome unless you invest in drugs. It's not about thrills and crossing boundaries. If the expected profits are the highest, a risky investment is the reasonable choice, no matter the size of the risk. Regarding the age, a 25 year old has the most to lose. Until 26 or 27, the brain has the biggest capacity for development. Wasting those years on something profitable but non-educative is a waste of potential. On the other hand, most successful companies are created by older founders because they have the experience and network to be able to succeed. The 30 year old manager on the other hand hasn't even reached the middle of his life. What if he runs a project in his company that fails? Will he have to prevent mistakes at all costs? Will he ever be able to manage instead of having to cover his ass for further 30 years? By focussing on what he could lose, he is wasting all the opportunities in his life. People who think like that shouldn't start a company. High profits don't come from high risks. As you say, if you only have the option between high profit, high risk and low profit, low risk, then it is all about risk preference. However, it's all about information asymmetry. Once you know a market and you see an opportunity, that means the risk is lower or the profits are higher than any other market participants assumes.