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> When a business goes under, the employees have just lost their abilities to feed themselves, keep a roof over their heads, see doctors, buy medicine and provi

> When a business goes under, the employees have just lost their abilities to feed themselves, keep a roof over their heads, see doctors, buy medicine and provide for their families. Yes, but that's always the risk of working at any company (and it's a risk the investor may also have if the company goes under). You can typically just get a new job and get these things back. I think an even more compelling argument here is the one of opportunity cost when working for a startup vs big FAANG company. Early startup tech employees not only invest their time but also lose out on real money they would have earned at another (bigger) company.

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alisonkisk 5y ago
Only of they are paid partly in equity. If they are getting a lower comp package than FAANG because of intangibles they value highly (perhaps developing skills FAANG will pay more for later) that's their choice.
rizzom5000 5y ago
| Early startup tech employees not only invest their time but also lose out on real money they would have earned at another (bigger) company. Isn't that by design? With greater risk comes the potential for greater reward. If someone doesn't want the startup risk, they can choose to pursue a job at FAANG. If your goal is to minimize risk, then choose a job as a schoolteacher or the post office. That's the nice thing about freedom of choice. https://www.linkedin.com/pulse/charlie-ayers-made-millions-cooking-googles-earliest-employees-jessi/ https://www.linkedin.com/pulse/charlie-ayers-made-millions-c...
- lumost 5y ago
  This presumes that early employees are getting a fair shake. In many cases they are being sold a lottery ticket with a value of only a few thousand dollars even when the company sells/IPOs.
  - WJW 5y ago
    Isn't that exactly what "risk" means in this context? Sometimes you get very rich (see the early google/microsoft employees), usually you get nothing or almost nothing. If you don't want to play the lottery there is nobody forcing you to work at startups.
    - michaelt 5y ago
      If you were promised 0.1% of the company and the company ends up worth $0, that's just the risk of taking equity. If you were promised 0.1% of the company then some financial shenanigans with 'dilution' or 'liquidation preferences' mean the company gets acquired for $200,000,000 and you don't see any of it, then you got taken for a fool.
      - WJW 5y ago
        Yes, if you don't know the rules of the game you will often lose because you did not see some (legal) move coming. Investing is the biggest game in the world and big boy rules apply. People who are unable or unwilling to learn how options and startup equity work should not take payment in equity, because they will get cleaned out as predictably as a drunk guy at a poker table.
        lumost 5y ago
        At the end of the day, any business partner can choose to screw you. VCs/Investors have additional protection by way of retained legal council, clawback clauses and occasionally debt based positions and liquidity preferences. An employee will simply never have access to that, the fact that it's been normalized for founders/investors to actively attempt to confuse and fool employees will simply drive skilled employees out of startups.

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alisonkisk 5y ago

Only of they are paid partly in equity. If they are getting a lower comp package than FAANG because of intangibles they value highly (perhaps developing skills FAANG will pay more for later) that's their choice.

rizzom5000 5y ago

| Early startup tech employees not only invest their time but also lose out on real money they would have earned at another (bigger) company. Isn't that by design? With greater risk comes the potential for greater reward. If someone doesn't want the startup risk, they can choose to pursue a job at FAANG. If your goal is to minimize risk, then choose a job as a schoolteacher or the post office. That's the nice thing about freedom of choice. https://www.linkedin.com/pulse/charlie-ayers-made-millions-cooking-googles-earliest-employees-jessi/ https://www.linkedin.com/pulse/charlie-ayers-made-millions-c...

lumost 5y ago
This presumes that early employees are getting a fair shake. In many cases they are being sold a lottery ticket with a value of only a few thousand dollars even when the company sells/IPOs.
- WJW 5y ago
  Isn't that exactly what "risk" means in this context? Sometimes you get very rich (see the early google/microsoft employees), usually you get nothing or almost nothing. If you don't want to play the lottery there is nobody forcing you to work at startups.
  - michaelt 5y ago
    If you were promised 0.1% of the company and the company ends up worth $0, that's just the risk of taking equity. If you were promised 0.1% of the company then some financial shenanigans with 'dilution' or 'liquidation preferences' mean the company gets acquired for $200,000,000 and you don't see any of it, then you got taken for a fool.
    - WJW 5y ago
      Yes, if you don't know the rules of the game you will often lose because you did not see some (legal) move coming. Investing is the biggest game in the world and big boy rules apply. People who are unable or unwilling to learn how options and startup equity work should not take payment in equity, because they will get cleaned out as predictably as a drunk guy at a poker table.
      - lumost 5y ago
        At the end of the day, any business partner can choose to screw you. VCs/Investors have additional protection by way of retained legal council, clawback clauses and occasionally debt based positions and liquidity preferences. An employee will simply never have access to that, the fact that it's been normalized for founders/investors to actively attempt to confuse and fool employees will simply drive skilled employees out of startups.