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As a counter-counter-point that gets rarely discussed on HN, VCs aren't taking as much of the pie as people think. In a 2-founder, 4-engineer company, it would
by khazhoux 3y ago
As a counter-counter-point that gets rarely discussed on HN, VCs aren't taking as much of the pie as people think. In a 2-founder, 4-engineer company, it wouldn't be unusual to have equity be roughly:
20% investors
70% founders
2-3% employees (1% emp1, 1% emp2, 0.5% emp3, 0.25% emp4)
7% for future employees before next funding round
- seanhunter 3y agoThis is not a fair comparison because you are not taking into account liquidation preferences. Those investors don't have the same class of equity as everyone else. That doesn't matter in the case of lights out success but it matters a great deal in many other scenarios.
- khazhoux 3y agoSure. My point was that most employees think that VCs take 80+%, and especially the first few employees usually have no idea just how little equity they have compared to the founders.
- killerstorm 3y agoYou can't run a sustainable business if you take VC money. VCs need an exit.