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I'm actually interested in this

"cannon fodder lining up on his doorstep willing to eat Ramen and gleefully line the coffers of his investor’s portfolios"

characterization, which I've read a good twenty times now. How does this make sense, when generally speaking, if an investor gets rich, it means the company succeeded, and thus the founders get rich too?

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The situation is not very rosy. Wasserman did a great longitudinal study of startups, and in a chapter about exits and rewards, he says that in 75% of cases founders don't get a financial reward for their years of hard work. The reason being that VCs structure their ownership such that only huge exists reward everybody, and in smaller exits VCs will get their payoff first.

Also, not to speak for the author, but the "cannon fodder" is not just the founders, but also people who are joining startups as employees, with the idea that they will trade years of below market pay and years of unpaid overtime for a shot at the moon. The startup ecosystem wouldn't be able to exist without a steady supply of them.

I didn't know that. Thanks.

Sure thing. And for anyone else who is interested in this topic, Wasserman's "The Founder's Dilemmas" is a fantastic study of the issues of money and control in VC-funded startups. (EDIT: fixed title)

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