> You don't have to pay it back but you do give up equity.
In most cases, investors get preferred shares, and founders get common shares. In the great majority of companies, the founder will earn their wages and get nothing for their equity.
About 10%[1] of companies do okay (not unicorn amounts), and founders might earn up to some millions.
For 20% (at a guess), the company is sold but the common shares are under water so founders get zero. That is because the preferred shares have seniority (priority) and the VCs get all the proceeds from a sale (e.g. acquihire).
There is a tiny minority[2] of super-successes (<1%) where founders make huge amounts, and selection bias means you have heard a lot about these very small number of successes.
The rest of the companies went bust spending all the money, and the founder hopefully got some wages.
But yes, a founder doesn’t owe anything for loans unless they were a guarantor for company debts, or they incurred personal debts while building the business (friends & family, mortgage drawdowns, credit card etcetera).
[1] https://80000hours.org/2014/05/how-much-do-y-combinator-foun...
Edit: my comments above are about companies that take VC money. No idea what the numbers might be like for YC founders that don’t get anything more than their YC investment.
[2] http://paulgraham.com/swan.html — also has this quote relevant to the article “That's the scary thing: fundraising is not merely a useless metric, but positively misleading. We're in a business where we need to pick unpromising-looking outliers, and the huge scale of the successes means we can afford to spread our net very widely. The big winners could generate 10,000x returns. That means for each big winner we could pick a thousand companies that returned nothing and still end up 10x ahead.”