4 ms·
The other aspect that's not factored in here is that often founders can spend years in search mode, living on savings or some early stage pre-seed VC, with zero
by 8f2ab37a-ed6c 2y ago
The other aspect that's not factored in here is that often founders can spend years in search mode, living on savings or some early stage pre-seed VC, with zero guarantee of success or ever even finding something to work on.
Took you 5 years to get to a concept that finally justified
hiring someone to help you grow it? Equity is the only form of compensation you have for all that work, and it might still be worth $0 another 5 years later. In the meantime the ICs are getting paid, are getting benefits, are having a life beyond the company.
The rewards have to be deeply asymmetric for this system to work, otherwise nobody in their right mind would even consider it.
- blizkreeg 2y agoThe asymmetric reward is the _company_ having a liquidity event thereby enriching the founder, NOT a funding round enriching the founder.
- 8f2ab37a-ed6c 2y agoAt least in my personal experience of doing this, you're often many years of living on savings and are in a bunch of debt and being able to get some cash from a funding event really helps with relieving the stress of barely making ends meet. Investors expect you to stay hungry for as long as possible, so even your salary is complete garbage, and the funding secondary is an absolute life saver that lets you sleep a little bit better at night after many years of dipping into the piggy bank.