Because they only want other middle/upper class founders like themselves.
Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
71–75 of 75 posts
Re: Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
#72Startups are unproven ideas. MAANG companies are proven businesses. Lots of people would say "Yes! I shall pretend to work on establishing a viable business if you throw scads of money at me!" And not ever really develop a viable business. Founders get rich by having equity. Some of them get stinking rich. It's basically a form of betting that incentivizes actually succeeding at finding a viable business model. That'…
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Re: Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
#73That’s not how it works.
People who start companies don’t find any satisfaction making 500k tc. They want 1 billion tc.
I was making a good ton of money working at a unicorn that IPOd but then it’s like okay that’s boring. I came in a few rounds before IPO what must the founder feel like (they’re billionaires lol) What would it be like to have 100 million or more, maybe a billion?
Worst case scenario I get a job and pull in 500k tc plus
Re: Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
#74As a 2-times founder, one VC funded and one bootstrapped I think there is a fundamental difference of the world view of a founder and a cash-optimizing employee you're missing. Startups are just businesses. Business owners value money, but they also value independence and freedom to do what they want to do. The "don't tell me what to do" gene is highly correlated with them. The only resource you can't buy is your tim…
I concur. If you are -asking- this question, then VC startup isn't for you.
If you are asking this question, then bootstrapping really isn't for you.
That's OK. There are these 3 very different employment models for a reason. They appeal to different people. Neither is better than the others.
While the original question is about immediate financial reward, that's only one part of the equation. Other parts include risk, control, secureness, impact, potential etc.
Ultimately the path for you depends on your personal value to each attribute. For the best possible returns, at lowest risk, go be an employee. For most control, good potential, mid-risk, bootstrap. For high risk, massive potential (but most likely implosion) go VC. All
Re: Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
#75Startup founders often decide their own salaries. With a limited capital, it makes sense to invest it into hiring the best talent and doing the best marketing, paying yourself a minimum viable amount to survive. If the startup works out, there is a big payout in the end. Paying yourself less, you increase the likelihood of everything working out.
Also, as an intangible benefit, having less cushy life puts you in a more aggressive mindset which is important.