7 ms·

I know you're just trolling, but I'll comment anyway, because it's important to set the record straight. The vast majority of founders are not spoiled rich kid

I know you're just trolling, but I'll comment anyway, because it's important to set the record straight. The vast majority of founders are not spoiled rich kids playing with daddy's money. The vast majority of founders take a massive risk when they go all in on a startup. Before getting funding, most bootstrap for years, neglecting family, friends, vacation, working 14 hour days, all for a business idea they believe in. The equity a founder gets is small compensation for giving up years of his life. Even after raising money, a founder will continue to live on subsistence wages, giving up the opportunity cost of a cushy 6 figure job. In pretty much every venture backed startup, the founders are some of the lowest paid employees at the company. Most of the funded startup founders I know make less than $50K, which is a big improvement from the minimum wage salary they paid themselves in the first two years of the startup. When your startup falls, there's not some kind of cushy EIR gig waiting for you at the friendly VC. Unless you're a tech celebrity, you're lucky to get an entry level PM job at a Google or Facebook. Source: Dozens of founders I know who raised money and failed. Your portrayal of all founders and investors as some kind of scheming robber barons is insulting and incredibly demeaning to every single entrepreneur on this forum. Guess what: founders are regular programmers, just like you. And they deserve every last bit of equity they get.

tptacek 13y ago
This EIR thing† is one of the weirder beliefs he has about the startup market. I know hundreds of people involved with startups and many tens of founders, and I have never even heard of someone in my social network getting an EIR position. The reality of EIR positions seems to be that they're places that VC firms park executives that they're almost willing to fund "on spec". That is: people who have already made them a shitload of money. I cannot find a way to give a shit about some VC firm paying a 50 year old former CEO to wait around for the next social cat picture startup to helm. † He didn't say it here, but use the search box below to look for the phase "EIR sinecure"
- michaelochurch 13y ago
  That is: people who have already made them a shitload of money. Also: people they owe favors, kids of Senators whose votes they need to sway, and people they did embarrassing stuff with in MBA school who are now getting the EIR job as a form of hush fee. The whole world runs on extortion, influence peddling, and favor trading. That's thousands of years old and hasn't changed much. But technology was supposed to be different and maybe, at some point a long-ass time ago, it was.
  - tptacek 13y ago
    You write comments like this and I worry about your mental health. Not because I think EIR positions are fairly allocated among deserving people, but because you've clearly fixated on something as petty and irrelevant as EIR positions at venture capital firms. What in the world could possibly matter less to young entrepreneurs than EIR positions? And yet here you are with stories about EIRs used to hush up things that happened at business school or bribing Senators. You've taken the time to actually tell yourself stories about them. About EIRs. The most boring feature of a VC firm. The guy they bring into the room to screen you when you're not compelling enough to get a meeting with an associate. If I'd been offered an EIR position at a VC firm, I'd worry about what I'd done wrong, shortly after checking my hairline and hair color to make sure I hadn't suddenly gone grey and bald.
    - michaelochurch 13y ago
      About EIRs. The most boring feature of a VC firm. [...] If I'd been offered an EIR position at a VC firm, I'd worry about what I'd done wrong See, you're doing the right thing here. You're ridiculing the welfare-for-rich-people system out there, just as I am. That's a first step. First, you use ridicule and attack prestige; after prestige falls (and mild embarrassment does that job) you hammer away at legitimacy underneath. Then, the corrupt edifice falls away and you can build something new. High real estate prices and low occupational autonomy are the surest sign of congestion. It means the wrong people are winning and it's up to the rising generation to fix the world.
      - 13y ago
michaelochurch 13y ago
The vast majority of founders are not spoiled rich kids playing with daddy's money. The vast majority of founders take a massive risk when they go all in on a startup. "The vast majority of founders" never take VC and aren't even working in a space that VCs will fund. I'm not talking about lifestyle businesses, which actually involve a lot of risk and sweat, I agree with you. When your startup falls, there's not some kind of cushy EIR gig waiting for you at the friendly VC. If you're VC-funded, there is. If you never get funding in the first place, then what you say is correct, there's no guarantee of anything. By the way, the fact that it's unfair I don't believe to be worth complaint. My problem is that we've ended up supporting a game that actually increases and perpetuates inequality by making pre-selected rich kids look like they earned it. In fact, the real respect goes to the risk-taking, unfundable, silent majority founders you described.
- tptacek 13y ago
  I was funded in 1999, at 2013 A-round levels. No EIR position awaited the failure of that company. Again: I don't even know anyone who's ever been offered an EIR position, and I know a fair number of people, many of whom have been funded, some of them by huge name VCs. So, why don't we do it this way: why don't you name a couple people who've been recipients of "EIR sinecures"?
  - yuhong 13y ago
    Note the "in 1999". michaelochurch can you comment on when it started?
    - deleted 13y ago
      [deleted]
    - danielweber 13y ago
      Over the past decade I've had the, um, interesting experience of watching a number of start-ups fail, VC-funded or not, sometimes competitors to 'tptacek's companies. I've never seen an EIR landing. I'm not even sure there are enough EIR spots available. Maybe lightning will strike and your name becomes recognizable on the front-page of the business section and then people throw results and funding at you in a self-fulfilling prophecy because they want to be on your good side. But I've also seen a lot of people team up with these famous folks only to massively regret it. It's definitely not the most efficient graft-free super-meritocracy ever, and there's a lot of luck even once you get past that, but I just don't see it.
mjn 13y ago
The vast majority of founders are not spoiled rich kids playing with daddy's money. I can believe most aren't rich, in the grew-up-in-a-mansion sense. But it'd be interesting if there were some hard numbers on it. What is the distribution of socioeconomic backgrounds of founders who raise VC? I've got some anecdotes myself (mostly suggesting solidly upper-middle-class), but data would be more enlightening.

tptacek 13y ago

This EIR thing† is one of the weirder beliefs he has about the startup market. I know hundreds of people involved with startups and many tens of founders, and I have never even heard of someone in my social network getting an EIR position. The reality of EIR positions seems to be that they're places that VC firms park executives that they're almost willing to fund "on spec". That is: people who have already made them a shitload of money. I cannot find a way to give a shit about some VC firm paying a 50 year old former CEO to wait around for the next social cat picture startup to helm. † He didn't say it here, but use the search box below to look for the phase "EIR sinecure"

michaelochurch 13y ago
That is: people who have already made them a shitload of money. Also: people they owe favors, kids of Senators whose votes they need to sway, and people they did embarrassing stuff with in MBA school who are now getting the EIR job as a form of hush fee. The whole world runs on extortion, influence peddling, and favor trading. That's thousands of years old and hasn't changed much. But technology was supposed to be different and maybe, at some point a long-ass time ago, it was.
- tptacek 13y ago
  You write comments like this and I worry about your mental health. Not because I think EIR positions are fairly allocated among deserving people, but because you've clearly fixated on something as petty and irrelevant as EIR positions at venture capital firms. What in the world could possibly matter less to young entrepreneurs than EIR positions? And yet here you are with stories about EIRs used to hush up things that happened at business school or bribing Senators. You've taken the time to actually tell yourself stories about them. About EIRs. The most boring feature of a VC firm. The guy they bring into the room to screen you when you're not compelling enough to get a meeting with an associate. If I'd been offered an EIR position at a VC firm, I'd worry about what I'd done wrong, shortly after checking my hairline and hair color to make sure I hadn't suddenly gone grey and bald.
  - michaelochurch 13y ago
    About EIRs. The most boring feature of a VC firm. [...] If I'd been offered an EIR position at a VC firm, I'd worry about what I'd done wrong See, you're doing the right thing here. You're ridiculing the welfare-for-rich-people system out there, just as I am. That's a first step. First, you use ridicule and attack prestige; after prestige falls (and mild embarrassment does that job) you hammer away at legitimacy underneath. Then, the corrupt edifice falls away and you can build something new. High real estate prices and low occupational autonomy are the surest sign of congestion. It means the wrong people are winning and it's up to the rising generation to fix the world.
    - 13y ago

michaelochurch 13y ago

The vast majority of founders are not spoiled rich kids playing with daddy's money. The vast majority of founders take a massive risk when they go all in on a startup. "The vast majority of founders" never take VC and aren't even working in a space that VCs will fund. I'm not talking about lifestyle businesses, which actually involve a lot of risk and sweat, I agree with you. When your startup falls, there's not some kind of cushy EIR gig waiting for you at the friendly VC. If you're VC-funded, there is. If you never get funding in the first place, then what you say is correct, there's no guarantee of anything. By the way, the fact that it's unfair I don't believe to be worth complaint. My problem is that we've ended up supporting a game that actually increases and perpetuates inequality by making pre-selected rich kids look like they earned it. In fact, the real respect goes to the risk-taking, unfundable, silent majority founders you described.

tptacek 13y ago
I was funded in 1999, at 2013 A-round levels. No EIR position awaited the failure of that company. Again: I don't even know anyone who's ever been offered an EIR position, and I know a fair number of people, many of whom have been funded, some of them by huge name VCs. So, why don't we do it this way: why don't you name a couple people who've been recipients of "EIR sinecures"?
- yuhong 13y ago
  Note the "in 1999". michaelochurch can you comment on when it started?
  - deleted 13y ago
    [deleted]
  - danielweber 13y ago
    Over the past decade I've had the, um, interesting experience of watching a number of start-ups fail, VC-funded or not, sometimes competitors to 'tptacek's companies. I've never seen an EIR landing. I'm not even sure there are enough EIR spots available. Maybe lightning will strike and your name becomes recognizable on the front-page of the business section and then people throw results and funding at you in a self-fulfilling prophecy because they want to be on your good side. But I've also seen a lot of people team up with these famous folks only to massively regret it. It's definitely not the most efficient graft-free super-meritocracy ever, and there's a lot of luck even once you get past that, but I just don't see it.

mjn 13y ago

The vast majority of founders are not spoiled rich kids playing with daddy's money. I can believe most aren't rich, in the grew-up-in-a-mansion sense. But it'd be interesting if there were some hard numbers on it. What is the distribution of socioeconomic backgrounds of founders who raise VC? I've got some anecdotes myself (mostly suggesting solidly upper-middle-class), but data would be more enlightening.