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I thought "founder liquidity" would refer to the supply and fungibility of founders. I've heard that, although ZIRP is over, there is still a large supply of capital, which implies that there's not enough good idead / founders to go around?
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> I have known zero founders who have turned down an option to take money off the table (and zero A raises that offered that to employees). Have seen companies offer this to employee's And companies that let employee's take money off the table at series A are also likely to be generous with meaningless titles; that is they will let early employee's call themselves founders.
At a Series A?!? That's insane to me. We're talking about the first priced funding round for the company, right?
It also works well for everyone involved if they're selling their shares to the investors for Series A - investors get shares for cheaper, founders get paid based around the value of those shares, more cash & runway in the bank.
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The very first startup I joined after grad school allowed all employees to cash out significant chunks of their stock in the Series A round. Also Elon famously put 200 million of his own money into Tesla and SpaceX to keep it afloat, which is the opposite of cashing out early.
...while he was getting loaned $200,000 a month for personal expenses by his billionaire buddies. https://www.cnbc.com/2017/04/27/the-crucial-decision-teslas-... Also, that may have kept tesla and spacex 'afloat' but what really saved both companies was billions upon billions of dollars in government contracts, subsidies, preferential loans, and tax breaks. Nevada alone gave nearly two billion dollars to Tesla.
> Investors and founders both tend to think that if employees knew founders were getting liquidity that that would negatively impact employee morale (it wouldn’t)
> If employees realize they are taking more risk than the founders, [...] maybe they'll start yelling: "I'M TAKING SO MUCH RISK, IT'S SO HARD TO BUILD A COMPANY, I DON'T EVEN HAVE ACCESS TO LIQUIDITY!!!". And maybe they're right.
How is "not impact morale" and giving an example of employees shouting as a possible outcome when they find out not contradict each other?
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This reminds me of how I have seen a few asks lately for roles where a company is looking for a CTO for their “AI startup”. How an “AI startup” (whatever that might actually mean) can _start up_ without a CTO is beyond me, and raises some very big red flags about what that company might be up to.
Mostly someone has a Phd and convinced people to give them money to 'change the world', then need someone who has actually built things beyond a script in a python notebook.
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This reminds me of how I have seen a few asks lately for roles where a company is looking for a CTO for their “AI startup”. How an “AI startup” (whatever that might actually mean) can _start up_ without a CTO is beyond me, and raises some very big red flags about what that company might be up to.
It’s not necessarily a red flag. Sometimes the founder/CEO is technical and decides to solo it with hired engineers until not having a real CTO is a flight risk, or until they’re too busy to be contributing code anymore, or both.
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This reminds me of how I have seen a few asks lately for roles where a company is looking for a CTO for their “AI startup”. How an “AI startup” (whatever that might actually mean) can _start up_ without a CTO is beyond me, and raises some very big red flags about what that company might be up to.
That's simple - they find a CTO. The really hard thing is marketing and closing big clients.
There are a lot of "tech businesses" that are actually using pretty pedestrian tech. What they are _actually_ doing is business model innovation with an underlying tech platform. Often, that tech platform can be commodity or relatively simple tech. There are other startup propositions, though, where the tech _is_ the thing, and if you get the tech right, then some of those other things end up being secondary (not irrelevant, of course) just not primary. This is assuming that you really have punched a hole thru the door with some amazing deep tech breakthrough, which not every company is doing, contrary to what they may claim.
There is a YouTube video [0] (which goes back to 2019) that does a pretty good job of making this point. Well, much better than I can.
To be fair to your original point: you're right that marketing and sales are hard. I'm just adding the subtlety that there are some tech businesses where the tech is _also_ hard, and perhaps even harder.
[0]: https://www.youtube.com/watch?v=C1DlZWfI6rk&ab_channel=YComb...
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That's simple - they find a CTO. The really hard thing is marketing and closing big clients.
This is true, but it also depends. There are a lot of "tech businesses" that are actually using pretty pedestrian tech. What they are _actually_ doing is business model innovation with an underlying tech platform. Often, that tech platform can be commodity or relatively simple tech. There are other startup propositions, though, where the tech _is_ the thing, and if you get the tech right, then some of those other thi…
My point is - asking "how did they do it without a CTO" is weird, they are hiring a CTO to do it, and they're bringing their business experience and funding - valuable stuff that a tech guy probably finds annoying. The number one suggestion on this forum is to sell before building and when somebody does it, users get wide eyes?
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The very first startup I joined after grad school allowed all employees to cash out significant chunks of their stock in the Series A round. Also Elon famously put 200 million of his own money into Tesla and SpaceX to keep it afloat, which is the opposite of cashing out early.
If you have 200 million "of your own money" to spare, you are no longer just a person for the purposes of this conversation, you're a walking VC fund, and you're not really risking a substantial change to your quality of life going from 250M to 50M net worth. Your living expenses are already generously compensated for by the large salary that you, the VC fund pays you, the person, out of your personal bank account, a…