New ask Hacker News story: Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
Ask HN: Why don't VCs just "suck it up" and pay founders a competitive salary?
2 by burtonator | 1 comments on Hacker News.
Most startup founders and early employees make about 1/2 of what they can working for MAANG companies. IMO this leads to the following problems: 1. Most startups that COULD exist are never actually started because the founders want to be making higher salaries working at Google/Microsoft/Meta/etc. 2. The only founders that actually move forward are ones that have a significant amount of cash in the back from previous startups. 3. The founders and investors aren't properly aligned. The founders want to exit but the investors want them to go long so that they get their unicorn exit. Now #3 is mitigated in some situations by having the founders do 'partial founder buyout' where they sell some of their equity into the next round for a few million dollars each. But this is an admission that there's a problem. It just seems like everyone would be better off if VCs would just get over it and put in more cash and allow their portfolio companies to pay more competitive salaries. I know this is happening in the AI space right now with companies paying more to pick up top talent - so they don't go to work for MAANG. This is inherently bad for startup employees and they are directly subsidizing profits for the VCs. The VCs get to diversify but the startup employees don't.
2 by burtonator | 1 comments on Hacker News.
Most startup founders and early employees make about 1/2 of what they can working for MAANG companies. IMO this leads to the following problems: 1. Most startups that COULD exist are never actually started because the founders want to be making higher salaries working at Google/Microsoft/Meta/etc. 2. The only founders that actually move forward are ones that have a significant amount of cash in the back from previous startups. 3. The founders and investors aren't properly aligned. The founders want to exit but the investors want them to go long so that they get their unicorn exit. Now #3 is mitigated in some situations by having the founders do 'partial founder buyout' where they sell some of their equity into the next round for a few million dollars each. But this is an admission that there's a problem. It just seems like everyone would be better off if VCs would just get over it and put in more cash and allow their portfolio companies to pay more competitive salaries. I know this is happening in the AI space right now with companies paying more to pick up top talent - so they don't go to work for MAANG. This is inherently bad for startup employees and they are directly subsidizing profits for the VCs. The VCs get to diversify but the startup employees don't.
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