Sometimes they aren't rich. Sometimes they're allowed to sell some stock during later funding rounds. Investors realized that when founders have to make all-or

Sometimes they aren't rich. Sometimes they're allowed to sell some stock during later funding rounds. Investors realized that when founders have to make all-or-nothing decisions, they're likely to sell for lower but certain amounts, but letting founders sell a small percentage of their equity for millions means the founders are more likely to try to get the company to be worth billions. Sometimes they can take out loans against their equity. Now they have millions in cash, and can go buy homes and cars and stuff. I'm not sure what happens if the startup goes under though!