4 ms·
Risk of employees is actually a lot higher than that of a founder. Founders have access to crucial financial information, employees do not. Thus higher risk.
by throwaway7808 12y ago
Risk of employees is actually a lot higher than that of a founder. Founders have access to crucial financial information, employees do not. Thus higher risk. Founders have all the control, employees do not. Thus higher risk. Founders can make almost arbitrary hiring/firing decisions that can affect a future (!) career of an employee. Last, but not least, employees may need a reference from their former bosses, founders don't.
- nilkn 12y agoYou forgot the obvious detail that the founder also stands to make far, far more money from an acquisition than most employees, but (if it's VC funded and not bootstrapped) is mostly insulated from any sort of real catastrophe if it fails.
- throwaway7808 12y agoYes, and that's the reward part of the risk/reward equation. I'm actually not concerned at all about the rewards, 'unfairness' or any other philosophical issues. What I don't like is that there's a myth "the founders bear most of the risk", while in fact, for VC-financed startups the opposite is probably true "the VCs and employees bear most of the risk."