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> Paying that cofounder more based on their stage in life is a requisite to acquiring that experience. The primary compensation for a founder position is the e

> Paying that cofounder more based on their stage in life is a requisite to acquiring that experience. The primary compensation for a founder position is the equity stake. A co-founder would get substantial equity (20% or more). For perspective, consider that future investors will be pouring millions of dollars into the company in exchange for a similarly sized equity stake. You need to remember that as a co-founder, they're deciding what to pay themselves. The higher the base compensation, the less runway they have and the fewer employees they can hire. If someone is demanding a $450K/year base compensation as a co-founder, they're not looking at this as a true co-founder role. A co-founder would want to focus on equity and take something like $150K/year so the company could hire 1-2 additional engineers with the other $300K/year. If this sounds weird or unfair, then you're probably not a good fit for a co-founder role. And that's fine! For most people, taking the $450K-$600K big tech is the better choice. Not everyone is cut out for the risk-taking of a co-founder role.

SmellTheGlove 5y ago
> If someone is demanding a $450K/year base compensation as a co-founder, they're not looking at this as a true co-founder role. A co-founder would want to focus on equity and take something like $150K/year so the company could hire 1-2 additional engineers with the other $300K/year. I think we're both making some assumptions around what GP was offered, but I would agree with you that asking for $450k as a cofounder is unreasonable. But I'd say that for someone closer to middle age with a family, $200k isn't unreasonable. The idea is that you want the cofounder to focus on the company, so you remove the financial distraction. > Not everyone is cut out for the risk-taking of a co-founder role. Sure, but that's not what I'm talking about here. I'm saying that you should not expect your co-founder and their kids to live on ramen. If you want the experience they offer, you gotta pay their bills. It's not about extravagance, it's just the cost of mitigating the same risk that the 20-something cofounder faces and mitigates with their own salary. It just costs more to do it with someone who is a little further along in life.
- PragmaticPulp 5y ago
  > I think we're both making some assumptions around what GP was offered, but I would agree with you that asking for $450k as a cofounder is unreasonable. But I'd say that for someone closer to middle age with a family, $200k isn't unreasonable. The idea is that you want the cofounder to focus on the company, so you remove the financial distraction. That's basically what I said in my other comment above, right down to the same $200K number: https://news.ycombinator.com/item?id=30517360 https://news.ycombinator.com/item?id=30517360 The parent commenter responded that they don't like startups at all due to the high failure rate. Between that and the unwillingness to give up immediate compensation, I think it's likely that they just don't really want to be a startup co-founder. Nothing wrong with that, but it's not really cool to blame a startup for having expectations in line with standard startup practices (assuming they weren't offering $50K or something silly)
andrew_ 5y ago
> If someone is demanding a $450K/year base compensation as a co-founder I see no mention of numbers aside from fractions in my comment. This is truly jumping the shark in order to form an argument. > A co-founder would want to focus on equity and take something like $150K/year so the company could hire 1-2 additional engineers with the other $300K/year. This is a rather bold assertion and you're stating it with the tone of authority and general application across the entire spectrum of what makes a startup, in any sector, of any flavor. You're also applying your own personal bias as a statement on a very personal situation offered anecdotally. Both are neither fair nor wise. Startups come in a million flavors. What a person's responsibilities to their family are does not equate to not being "cut out for the risk-taking," as risks themselves are of great variety, nor does a co-founder need to focus on equity alone. I'm fortunate to have a wide network of colleagues that include co-founders that are in the game for long-term viability and stability to provide equitable income for themselves and their families, and their employees, as well as a return to investors. It's clear that your view is one through the lens of "to the moon on the back of a unicorn," where in fact there are many different long-term strategies. I personally find the unicorn startup path distasteful and disingenuous, as there's such an incredible rate of failure. Modesty and consistent, steady growth are now highly underrated. Overall your message echoes that of the proposed co-founder I mentioned in my original post, and is antithetical with my views on business and startups in general. To those who may be reading the parent above, know that there are many successful startups that don't subscribe to the same philosophy.
- PragmaticPulp 5y ago
  > I see no mention of numbers aside from fractions in my comment. This is truly jumping the shark in order to form an argument. I wasn't talking about you, I was speaking in generic terms to make an example. You didn't give us any numbers so it's useless to discuss your specific scenario. I commented above on the lack of numbers and provided more examples for different scenarios about your situation: https://news.ycombinator.com/item?id=30517360 https://news.ycombinator.com/item?id=30517360 > What a person's responsibilities to their family are does not equate to not being "cut out for the risk-taking," I think you've missed the point. Nobody here is saying that founders need to neglect their families or whatever. If the startup was trying to pay you a number so low that you couldn't make ends meet, then that's a problem with the startup. > I personally find the unicorn startup path distasteful and disingenuous, as there's such an incredible rate of failure. I think it's pretty clear that you're not a good match for startups. Like I said, there's nothing wrong with that. However, it doesn't make sense to blame the startup founder for (presumably, impossible to say without numbers) having standard startup expectations or startups for being risky in general. If you don't like startups and you value immediate compensation above all else, that's fine! Nothing wrong with that! You're just not a good match for a startup co-founder position. That said, the founder's primary compensation is in the equity. Expecting cash compensation to match big companies is a no-go for early stage founders.
Kletiom 5y ago
Something like 150k. In which world are any of your numbers realistic for a founder position? I mean we talk startups. Most startups not even get 500k in a seeding round ever

SmellTheGlove 5y ago

> If someone is demanding a $450K/year base compensation as a co-founder, they're not looking at this as a true co-founder role. A co-founder would want to focus on equity and take something like $150K/year so the company could hire 1-2 additional engineers with the other $300K/year. I think we're both making some assumptions around what GP was offered, but I would agree with you that asking for $450k as a cofounder is unreasonable. But I'd say that for someone closer to middle age with a family, $200k isn't unreasonable. The idea is that you want the cofounder to focus on the company, so you remove the financial distraction. > Not everyone is cut out for the risk-taking of a co-founder role. Sure, but that's not what I'm talking about here. I'm saying that you should not expect your co-founder and their kids to live on ramen. If you want the experience they offer, you gotta pay their bills. It's not about extravagance, it's just the cost of mitigating the same risk that the 20-something cofounder faces and mitigates with their own salary. It just costs more to do it with someone who is a little further along in life.

PragmaticPulp 5y ago
> I think we're both making some assumptions around what GP was offered, but I would agree with you that asking for $450k as a cofounder is unreasonable. But I'd say that for someone closer to middle age with a family, $200k isn't unreasonable. The idea is that you want the cofounder to focus on the company, so you remove the financial distraction. That's basically what I said in my other comment above, right down to the same $200K number: https://news.ycombinator.com/item?id=30517360 https://news.ycombinator.com/item?id=30517360 The parent commenter responded that they don't like startups at all due to the high failure rate. Between that and the unwillingness to give up immediate compensation, I think it's likely that they just don't really want to be a startup co-founder. Nothing wrong with that, but it's not really cool to blame a startup for having expectations in line with standard startup practices (assuming they weren't offering $50K or something silly)

andrew_ 5y ago

> If someone is demanding a $450K/year base compensation as a co-founder I see no mention of numbers aside from fractions in my comment. This is truly jumping the shark in order to form an argument. > A co-founder would want to focus on equity and take something like $150K/year so the company could hire 1-2 additional engineers with the other $300K/year. This is a rather bold assertion and you're stating it with the tone of authority and general application across the entire spectrum of what makes a startup, in any sector, of any flavor. You're also applying your own personal bias as a statement on a very personal situation offered anecdotally. Both are neither fair nor wise. Startups come in a million flavors. What a person's responsibilities to their family are does not equate to not being "cut out for the risk-taking," as risks themselves are of great variety, nor does a co-founder need to focus on equity alone. I'm fortunate to have a wide network of colleagues that include co-founders that are in the game for long-term viability and stability to provide equitable income for themselves and their families, and their employees, as well as a return to investors. It's clear that your view is one through the lens of "to the moon on the back of a unicorn," where in fact there are many different long-term strategies. I personally find the unicorn startup path distasteful and disingenuous, as there's such an incredible rate of failure. Modesty and consistent, steady growth are now highly underrated. Overall your message echoes that of the proposed co-founder I mentioned in my original post, and is antithetical with my views on business and startups in general. To those who may be reading the parent above, know that there are many successful startups that don't subscribe to the same philosophy.

PragmaticPulp 5y ago
> I see no mention of numbers aside from fractions in my comment. This is truly jumping the shark in order to form an argument. I wasn't talking about you, I was speaking in generic terms to make an example. You didn't give us any numbers so it's useless to discuss your specific scenario. I commented above on the lack of numbers and provided more examples for different scenarios about your situation: https://news.ycombinator.com/item?id=30517360 https://news.ycombinator.com/item?id=30517360 > What a person's responsibilities to their family are does not equate to not being "cut out for the risk-taking," I think you've missed the point. Nobody here is saying that founders need to neglect their families or whatever. If the startup was trying to pay you a number so low that you couldn't make ends meet, then that's a problem with the startup. > I personally find the unicorn startup path distasteful and disingenuous, as there's such an incredible rate of failure. I think it's pretty clear that you're not a good match for startups. Like I said, there's nothing wrong with that. However, it doesn't make sense to blame the startup founder for (presumably, impossible to say without numbers) having standard startup expectations or startups for being risky in general. If you don't like startups and you value immediate compensation above all else, that's fine! Nothing wrong with that! You're just not a good match for a startup co-founder position. That said, the founder's primary compensation is in the equity. Expecting cash compensation to match big companies is a no-go for early stage founders.

Kletiom 5y ago

Something like 150k. In which world are any of your numbers realistic for a founder position? I mean we talk startups. Most startups not even get 500k in a seeding round ever