Hacker News Reader

Comment by ilrwbwrkhv | Hacker News Reader

It's crazy that Elon Musk still has 17 percent of Tesla and founders are giving away more than that just by series A.

Is it because they are not creating anything truly unique with great market pull?

I'm not an expert in this, but most startups that have tried to recruit me in series A/B have such small ambitions (or more quantitatively, TAM) that I can understand why investors want higher stakes. If your TAM and desired market capture implies revenue of less than like $500 million the company is never going to IPO, just for example.

Side note, as a potential employee (and a different kind of investor) that's the determining factor in whether or not the equity vs paycut gamble makes sense.

> If your TAM and desired market capture implies revenue of less than like $500 million the company is never going to IPO, just for example.

The vast majority of tech companies that IPO have revenues of (much) less than $500M.

Musk bought his shares at series A.

It is because they aren't self-funding in the way that an ex-Paypal billionaire can. Elon Musk started Tesla with enough money to be a VC himself, but put it in to his own companies.

Normal SWEs can follow this example by saving up and being willing to work for a big discount if it's their own company they're working on. That's not going to let you start a car company but for a website it might be enough.

> Elon Musk started Tesla with enough money to be a VC himself, but put it in to his own companies.

Didn't he _not_ start Tesla, though? I thought he bought his way in, and negotiated cofounder status?

Reply on news.ycombinator.com