FANG: low variance + moderate reward
vs
ENTREPRENEUR: high variance + high reward
The Kelly Criterion can probably be applied here on how much to "invest" in each opportunity. Ultimately it matters how often these opportunities come up.
Because if it's expected value, I doubt "entrepreneur" is high reward compared to FANGs "moderate reward".
EV = Probability * Outcome
Probability is very low of an IPO outcome - but EV is probably still higher than FANG work.
Total market value of unicorns ~$2T (~600 unicorns). So average unicorn valuation ~3.3B USD.
Let's say you're the founder and your [ultimately diluted] share of the company is 10%. You have a 10Y runway. Your EV in startup case is 330M (10% of 3.3B) * 1% chance of success = $3.3M or $330K USD per year. This is only counting the extreme (unicorn cases) and will obviously vary with equity percentages.
https://news.crunchbase.com/news/private-unicorn-board-now-a...
$3.3m in NW is 100% beatable in FANG.
It's a tricky problem in the general case because the skills that would allow you to capture a high compensation in FAANG probably correlate with the skills that would lead to a successful startup (not perfectly, but somewhat), so the better your options in FAANG the better your potential outcome via startup (with much higher variance).
Suppose, 10^-9 odds of a startup making 10 billion. Let's assume the other terms are negligible.
E_startup = ... + 10^-9 * 10^11 = 100$ E_faang = 10^-1 * 10^5 + 10-2 * 10^6 + ... >= 10^4
Intuitively those numbers feel wrong. theres 7bn people on this planet - and only a very tiny proportion might become tech entrepreneurs. So I think your "1 in a billion" chance of being successful is a bit high. Also, who said $10bn was successful? It is just 1 outcome of many...