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Very risky: For the average founder, the expected utility of starting a VC funded company is around -$200k. http://www.nber.org/papers/w14219 http://www.nber.o
by jpulgarin 15y ago
Very risky: For the average founder, the expected utility of starting a VC funded company is around -$200k.
http://www.nber.org/papers/w14219 http://www.nber.org/papers/w14219
- dreamdu5t 15y agoFounders aren't necessarily the ones putting up the cash. I haven't seen any statistics on the percentage of "startups" that are founder-funded, but in my personal experience the majority are not - even if the money is borrowed from family. Not considering opportunity cost, the founder isn't out $200k, the investors are. IMHO founders usually have the best position in a startup. They get paid to possibly reap the benefits of ownership, but if it fails they are out of a job like any other employee. They assume similar costs as their employees, but stand to gain much more.
- seiwyn 15y agoThe point isn't that the founder loses 200k out of his pocket, it's that the founder loses out on a potential of 200k by taking a lower salary working on the startup instead of working at a company.