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Comment by CapitalistCartr | Hacker News Reader

This is an excellent example of why startups are dominated by the young, single, affluent. They have nearly nothing to lose. The rest of us do.

"If the company goes poof, we are individually liable for the debts," Wayne explained. "Jobs and Wozniak didn't have two nickels to rub together. I had a house, and a bank account, and a car… I was reachable!"

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It seems that the average age of startup founders is actually 40 according to this article: http://www.entrepreneur.com/article/235357

I can see why, by then you get some financial stability and kids get older, a good amount of experience etc...

It seems like a different environment now. The debt here sounds like a bank loan or something along those lines where they expected to get paid back in cash. These days, it's more likely to be a VC investment or a Kickstarter or something else where there's no debt created and the people giving the money are just buying some sort of share in the company's potential success.

It is better, but it's difficult to guarantee that the company will never go through a stage where a personally-guaranteed overdraft is the best option. At least in the UK these are usually jointly and severally repayable by the founders. At that point I'd far rather be the founder in my early 20s with nothing but debt than the one with the house who is going to end up homeless.

I wonder if back then was better than it is now.

The whole VC thing seems to lead to a whole lot of pump and dump schemes. It, and going public, seem to lead to a whole lot of short term thinking.

Having nothing to lose means being not affluent. Wayne quit because he had resources that Jobs+Woz didn't.

Just goes to reinforce an old truth -- that people are never as greedy as when they're defending what they currently have.

Was not Apple incorporated as a limited liability company which limits your losses?

I don't know the specifics, but it may not have been officially incorporated yet.

Very often lenders will refuse to issue loans to the LLC, instead requiring company officers to take loans out in their name so a lender can be made whole in the event of default.

It's very common with "Close companies" (companies that are owned and run by a small number of people) that banks require the directors/owners to act as a personal guarantor on company loans.

Without that, it would be quite legal for the directors to take a whopping loan, pay themselves a whopping salary/bonus, then have the company go bankrupt without recourse to the bank. Rinse, repeat, profit.

You're talking about PE firms, right?

Rinse, repeat, profit.

That "repeat" part is where this plan goes off the rails. You can fool your creditors once, but then the word gets around.

Unless you're Trump.

that is the whole reason he walked away from the company. Jobs refused to fill out all the paperwork to form a corporation. They were running the company as a partnership which left all the members liable for everything the business did. It was not just the bank loans that were the worry. It was the contracts they were signing, if they failed to deliver the owners could personally have been sued for breach of contract

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