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I've never understood the subtle negative attitude towards the fact that founders get most of the equity. It's like everything else in the world from investing
by SurfScore 13y ago
I've never understood the subtle negative attitude towards the fact that founders get most of the equity. It's like everything else in the world from investing to gambling (some would say they're the same). The higher the risk, the higher the reward. If you're getting a salary you simply aren't taking that much risk.
This isn't to say early employees shouldn't be compensated fairly, they should. But you can't just be in it for the money. Being an early-stage employee is great for your personal development and puts you on a fast track to a C-level position should the company survive. You simply won't get that at BigCo.
- sliverstorm 13y agoSo founders don't pay themselves a salary?
- bkanber 13y agoMy co-founder and I only just started paying ourselves this year, and we've been paying our employees good wages ever since they started, last year. So yes, some founders will forego a salary (like us). Others won't. We pay ourselves when the company can afford to pay us, but we always pay our employees first.
- tkone 13y agoYou're a crazy man. I've not gotten paid before because we had no money, but that didn't stop our founder from vacationing in France. (Different startup than this last one).
- codex 13y agoUsually they do. The founder that forgoes a salary is a myth.
- SurfScore 13y agoYou're right they do, but the concept of "market value" salary is laughable until after Series A at least.
- sliverstorm 13y agoIf you're getting a salary you simply aren't taking that much risk. You can't argue that employees get a salary and thus don't deserve as much reward, but simultaneously argue that even though founders get a salary, because it is below market rate they deserve more reward. Both parties are getting paid below market rate.
- SurfScore 13y agoI was referring to the pre-seed/angel stage. A lot of founders bootstrap, max out credit cards, etc to pay for startups in the very early stages
- trustfundbaby 13y ago> I've never understood the subtle negative attitude towards the fact that founders get most of the equity I think its because in some of these cases the founder(s) persuade people to work for them at below market salaries by selling them a dream that seems to involve said employees "being in it together" with them, when the equity distribution says anything but. I think if a startup is paying market rate or above, then the employees have no reason to feel like when the company sells or goes public that they should make out like bandits too.