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The expected returns from "want[ing] to go and work at companies like McKinsey, Goldman Sachs or Google" are both greater and more certain, so perhaps the indiv
by rwmj 2y ago
The expected returns from "want[ing] to go and work at companies like McKinsey, Goldman Sachs or Google" are both greater and more certain, so perhaps the individual young people are acting quite rationally in the UK?
For context I spent years in my 20s doing start ups in London, and undoubtedly would have been better off financially now if I'd worked for some soul-sucking consultancy instead. I do agree with him that raising money in the UK is quite hard.
- rpastuszak 2y ago[flagged]
- GeneralTspoon 2y agoThe expected return of working for Big 4 in your 20’s is a coke habit
- Aerbil313 2y agoI don't get it, can you explain?
- esafak 2y agoBig 4 types squander their money on vices.
- andyferris 2y agoCocaine.
- blitzar 2y agoThe expected return of working for Startups in your 20’s is a heroin habit
- dan-robertson 2y agoYeah, but I think it’s also true in the US (even more so as pay from the non-startup careers is higher). Maybe one should ask why it’s so much more common to do the irrational thing in the US than the UK.
- rwmj 2y agoCould be house prices again. You really cannot survive on ramen and hope to live anywhere close to London. I know that SF is not good either, but the US does have other cities with less of a housing crisis.
- mike_hearn 2y agoRemember you have to normalize for population size. And when we say the US we really mean one small part of it. People in the US often move to California to start their startups, they don't necessarily stick around in the part of the US they're currently in. This is largely due to the VC ecosystem there which makes "irrationality" relatively safe vs everywhere else in the world where it doesn't. Tom's article makes this crystal clear when he says: > The downside of early-stage investing is that you lose 1x your money - it’s genuinely not worth worrying much about The only potential downside is only losing all your money, what kind of stick in the mud would care about that? So anyway, we might ask why is the VC ecosystem so much stronger in California than in the UK. But a lot people don't like to think about that because the answer is so obvious: in the 70s when Silicon Valley was getting established and the flywheel of founder->startup->success->sale->VC->founder was spinning up, the UK was mired in socialist hell with rotating power outages, militant unions toppling governments, four-day working weeks and an IMF bailout. At that time making a startup was entirely pointless and a VC fund literally impossible, because the top tax rate on investment gains peaked at 98%. You could invest in startups but the deal presented by Labour was: if you lose money you lose it, if you gain money you still lose it. Thatcher and then Major beat back some of the most extreme aspects of this, and in this period the top level tax rates were systematically reduced to more normal rates. But Britain of the 1980s was still drastically more investor-hostile than the USA and there was no venture culture as a consequence. In particular the practice of granting equity in startups was not really known (notable exception: ARM, one of the few successful tech startups the UK has ever produced). Even today British governments routinely levy so-called "windfall taxes" to grab the profits from companies that are doing well, the moment they have an opportunity to do so politically. That culture gap is ultimately the major difference. The idea of a windfall tax in the USA is hard to imagine, I'm not sure it's ever happened.
- 2y ago