Yes, a founder gets compensated significantly more than early employees. Massive shocker. If those early employees were talented enough, they’d be founders getting compensated.
I don’t know when this dramatic shift happened to Americans to believe building a successful company is mostly luck, but it’s depressing.
Shame on you, HN.
To say that’s a naive and inaccurate view of the world would be an understatement.
Whoever wants to do the first 3-6 months (or 3-6 years) without a paycheck while figuring out the problem, solution and funding gets to be the founder.
If employees were lowballed underpaid, screwed out of vested shares etc that’s different but of course the person that decides to make the company owns most of it and gets the biggest payout when it sells.
The market doesn't care about your fragile ego or low self-esteem.
Seriously, what is your point here, besides acting like a jerk? I mean, I totally agree with you, but that's why I think this thread is important. It should be a lesson to potential startup employees about how extremely lopsided the risk/return considerations are, that most equity deals are complete shit at startups, and that you should usually demand more equity if you have any negotiating power.
Indeed, the purpose of threads like this should be to convince startup employees as a whole that they're getting screwed on equity so they should demand more.
I suspect you're also one of those people who says employees should just have negotiated better salaries but also fires them for discussing salaries.
Because it's true? Studies (Gompers, et. al. (2009)) indicate that a second time entrepreneur has a 30% chance of success versus a 20% for a first time one. So there's some skill in it but it mostly comes down to luck.
edit: And if you're arguing skill then clearly the skill of the early employees matter tremendously and not just the skill of the founder. So why do you think it's wrong for those employees to get more stake?
That clearly shows a vast improvement in skill. A luck doesn't improve over time. If it was "mostly" luck they would get roughly the same outcomes the second time.
And to your last point, who is saying it’s wrong for employees to get more stake? Of course it’s not wrong, but as an employee you have to negotiate that. People can’t just magically get what they feel they deserve because it would add up to way over 100%. Remember, the company exists because of the founder, doesn’t matter how much you think you contribute, because at the end of the day the company does not exist without them. If you can convince them to give you more then you should, and if you can’t you are free to start your own company. I do not see what is so unfair about this situation and I say that as instrumental #1 employee who got less than 1% for a 9-year effort building a moderately successful company. You don’t get what you deserve in life, you get what you negotiate.
The two aren't mutually exclusive.
Startup outcomes are mostly luck, led by people who (have to?) believe that they aren't.
And negotiation require knowledge. This thread is about being told to not discuss that knowledge publicly and to not acknowledge the real life implications of certain equity splits.
As I said in another comment, this is like saying employees should have negotiated better salaries and then firing them for discussing salaries.
