3 ms·

Will they be paid a fraction of their salary if the company performs poorly? The biggest rewards go to the biggest risk-takers.

• michaelochurch 16y ago
  I can see the point you're trying to make, but humanistically and morally speaking, this isn't true. A person with $10 million who puts $3 million into a business isn't taking that much of a risk. There's some risk there and, yes, it should be rewarded. But a person with no net worth is taking a huge risk every time he takes a new job: career risk. This dynamic exists in startups as well. The people who are taking the real risks are the founders, not the venture capitalists.
  • gyardley 16y ago
    Career risk in startups? There's job risk in startups, yes, but not career risk. Working for startups serves you very well.
  • danenania 16y ago
    This sort of misses the point. Maybe it's true that the employee is taking relatively more risk based on his life situation, but that doesn't matter. What matters is the business needs $3 million. The only way it can get that is by promising a sufficient return to whoever is willing to risk that much. What the amount means to the investor personally is irrelevant. The reality is there are a lot more people willing to risk their time (take a job) than $3 million, therefore the $3 million has a higher price attached. From the perspective of someone investing $3 million, seeking the best possible return the market will provide is no different than a programmer seeking the best possible wage the market will provide.