5 ms·

Your math is looking wrong. Because working in a startup is an investment.

gfodor 14y ago
Obviously I meant investment in the traditional sense, the deployment of capital with the expectation of yield and preservation of principal. Working for a startup is an "investment" in the figurative sense, since you are trading your time for equity instead of cash, but what I meant here was literally putting money into some asset or security to increase your wealth or income.
- dchichkov 14y ago
  What I meant is that there is no 2x2 matrix like this. You can: work for/be a founder. And you can invest. There are no 'figurative sense investments'. You can't 'invest time'. Nobody cares about your time. You can only invest money [or hours * your market rate, which is money].
  - gfodor 14y ago
    I think you are just repeating my point and misunderstood my original description. There are people who invest in and work for startups, people who invest in and work for non-startups, people who invest in startups and work for non-startups, and people who invest in non-startups and work for startups. The interplay between time and money and risk and growth with these combinations became clearer to me because of this post.
    - dchichkov 14y ago
      There are founders [owners] and investors. Fact that there are people who 'work for' startup is irrelevant to the interplay between the investment risk/return. True, one can be not-a-founder and work for startup. But this person would be just working for salary, and hopefully at market rate. So it is irrelevant to the investment risk/return equation. Now if one is not working at MARKET RATE - here we have some muddy waters. Because this person would be essentially making a monthly investment. This investment would likely go towards COMMON [not restricted] stocks, WITH vesting/cliff, with NO CAP. If this is the case, one can just assume that startup would have an angel investor doing a monthly investment on these terms. This would go into risk/return equation. Again fact that somebody is working is irrelevant to risk/return. That's why I've said that your 2x2 matrix doesn't make sense. Now, you can replace 'work for' with 'founder' and it would make sense. And by the way, if you read the original pg article, he doesn't mention people who 'work for' startups at all. He is talking about founders and VCs.
      - gfodor 14y ago
        Yeah when I said "work for" I was referring to founders or those working for significant equity.

Obviously I meant investment in the traditional sense, the deployment of capital with the expectation of yield and preservation of principal. Working for a startup is an "investment" in the figurative sense, since you are trading your time for equity instead of cash, but what I meant here was literally putting money into some asset or security to increase your wealth or income.

dchichkov 14y ago
What I meant is that there is no 2x2 matrix like this. You can: work for/be a founder. And you can invest. There are no 'figurative sense investments'. You can't 'invest time'. Nobody cares about your time. You can only invest money [or hours * your market rate, which is money].
- gfodor 14y ago
  I think you are just repeating my point and misunderstood my original description. There are people who invest in and work for startups, people who invest in and work for non-startups, people who invest in startups and work for non-startups, and people who invest in non-startups and work for startups. The interplay between time and money and risk and growth with these combinations became clearer to me because of this post.
  - dchichkov 14y ago
    There are founders [owners] and investors. Fact that there are people who 'work for' startup is irrelevant to the interplay between the investment risk/return. True, one can be not-a-founder and work for startup. But this person would be just working for salary, and hopefully at market rate. So it is irrelevant to the investment risk/return equation. Now if one is not working at MARKET RATE - here we have some muddy waters. Because this person would be essentially making a monthly investment. This investment would likely go towards COMMON [not restricted] stocks, WITH vesting/cliff, with NO CAP. If this is the case, one can just assume that startup would have an angel investor doing a monthly investment on these terms. This would go into risk/return equation. Again fact that somebody is working is irrelevant to risk/return. That's why I've said that your 2x2 matrix doesn't make sense. Now, you can replace 'work for' with 'founder' and it would make sense. And by the way, if you read the original pg article, he doesn't mention people who 'work for' startups at all. He is talking about founders and VCs.
    - gfodor 14y ago
      Yeah when I said "work for" I was referring to founders or those working for significant equity.