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Accepting an IOU as a startup employee is about the dumbest thing anyone could possibly do. You're effectively placing a bet that you'll simply get compensatio

Accepting an IOU as a startup employee is about the dumbest thing anyone could possibly do. You're effectively placing a bet that you'll simply get compensation owed on a company who obviously has money problems.

adventured 13y ago
Given the extreme failure rate of startups, the same could easily be argued for going to work for a startup to begin with. Everybody should clearly work for Microsoft instead. It's not about the dumbest thing anyone could possibly do. It's a calculated bet. Every person on earth makes them every single day. Your life choices are not theirs, so what. Millions still smoke cigarettes in the US (destroying their lungs), and drink alcohol (destroying their livers), are you going to lecture them about that being the dumbest thing they can possibly do, or do you accept that as a life choice with risks? How about risky sexual behavior? How about driving a car? Living in Chicago? Eating hamburgers? Drinking soda? It's no different in principle, they're all calculated risks, and everybody wants different things for different reasons. Personally I wouldn't default to assuming someone is doing something dumb. Seems drastically arrogant to do so without knowing their/the context.
- robryan 13y ago
  If you are paid at market or above though you aren't taking a outsized risk.
- flyinRyan 13y ago
  > the same could easily be argued for going to work for a startup to begin with. Only if you're working at below market rate for dog shit equity (i.e. stocks that will be diluted into nothing). > It's a calculated bet. In the same way that buying lottery tickets or shoving more coins into a one-armed bandit is a "calculated bet". The calculation has already been done and the house always wins. Again, we're talking about a company that is mismanaged to the point of not making payroll. This is where you're placing your "calculated bet". And what happens if you "win"? Oh, you get the money that you had already earned in any case. This is lose-"break even" scenario. Even novice gamblers should know better to throw resources after bets like that. >Millions still smoke cigarettes <snip> So you make a big long list consisting partially with stupid choices people make out of peer pressure or down right stupidity, and partially out of things people do because they get a reward and there is a low risk of downside. How do you imagine that compares? Driving a car increases my quality of life in many ways. Even though driving is one of the more risky things you can do it's still a very small risk that anything will happen to me. And by engaging in this risk I can improve my standard of living dramatically. Taking a job from people who've proven they can't make payroll with the hope that they might pay me what I'm owed is not a similar thing. >Personally I wouldn't default to assuming someone is doing something dumb. If someone is doing something dumb (like buying a lottery ticket) then that person is doing something dumb. It's pretty straightforward. That doesn't mean that person is dumb, we all do dumb things from time to time. Maybe even on a regular basis. But we should at least stick to doing dumb things that have a low risk of a major downside.
- potatolicious 13y ago
  In the current economy there is very little risk for a startup employee - if the company flounders you will land on your feet. In a poorer economy you will see people fleeing startups and going towards big companies like Microsoft precisely because the risk profile has changed.
- ProblemFactory 13y ago
  > It's a calculated bet. Certainly, and all founders take this bet when starting a company. But any reasonable bet has a potential for upside, not just making your money back. Working for deferred salary is truly a dumb decision, because even in the very best case you get paid as much as at a comparable position elsewhere. IOU's make sense only when they are many times over market rate to adjust for the risk, or if you get equity and become a founder.

adventured 13y ago

Given the extreme failure rate of startups, the same could easily be argued for going to work for a startup to begin with. Everybody should clearly work for Microsoft instead. It's not about the dumbest thing anyone could possibly do. It's a calculated bet. Every person on earth makes them every single day. Your life choices are not theirs, so what. Millions still smoke cigarettes in the US (destroying their lungs), and drink alcohol (destroying their livers), are you going to lecture them about that being the dumbest thing they can possibly do, or do you accept that as a life choice with risks? How about risky sexual behavior? How about driving a car? Living in Chicago? Eating hamburgers? Drinking soda? It's no different in principle, they're all calculated risks, and everybody wants different things for different reasons. Personally I wouldn't default to assuming someone is doing something dumb. Seems drastically arrogant to do so without knowing their/the context.

robryan 13y ago
If you are paid at market or above though you aren't taking a outsized risk.
flyinRyan 13y ago
> the same could easily be argued for going to work for a startup to begin with. Only if you're working at below market rate for dog shit equity (i.e. stocks that will be diluted into nothing). > It's a calculated bet. In the same way that buying lottery tickets or shoving more coins into a one-armed bandit is a "calculated bet". The calculation has already been done and the house always wins. Again, we're talking about a company that is mismanaged to the point of not making payroll. This is where you're placing your "calculated bet". And what happens if you "win"? Oh, you get the money that you had already earned in any case. This is lose-"break even" scenario. Even novice gamblers should know better to throw resources after bets like that. >Millions still smoke cigarettes <snip> So you make a big long list consisting partially with stupid choices people make out of peer pressure or down right stupidity, and partially out of things people do because they get a reward and there is a low risk of downside. How do you imagine that compares? Driving a car increases my quality of life in many ways. Even though driving is one of the more risky things you can do it's still a very small risk that anything will happen to me. And by engaging in this risk I can improve my standard of living dramatically. Taking a job from people who've proven they can't make payroll with the hope that they might pay me what I'm owed is not a similar thing. >Personally I wouldn't default to assuming someone is doing something dumb. If someone is doing something dumb (like buying a lottery ticket) then that person is doing something dumb. It's pretty straightforward. That doesn't mean that person is dumb, we all do dumb things from time to time. Maybe even on a regular basis. But we should at least stick to doing dumb things that have a low risk of a major downside.
potatolicious 13y ago
In the current economy there is very little risk for a startup employee - if the company flounders you will land on your feet. In a poorer economy you will see people fleeing startups and going towards big companies like Microsoft precisely because the risk profile has changed.
ProblemFactory 13y ago
> It's a calculated bet. Certainly, and all founders take this bet when starting a company. But any reasonable bet has a potential for upside, not just making your money back. Working for deferred salary is truly a dumb decision, because even in the very best case you get paid as much as at a comparable position elsewhere. IOU's make sense only when they are many times over market rate to adjust for the risk, or if you get equity and become a founder.