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> All of this after 7 to 10 years of working 80+ hours week, no social life, loosing family, sacrificing health, taking less than $100k/year salary

If you are taking less than $100k/year salary for 7 to 10 years while also absolutely no-lifing then that’s on you.

It’s true that early on you prob take ramen salary, but that’s for one or two years. You can prob scale to 200k by year 3 if your thing is viable. No-lifing when your startup is in year 5 is just a personal choice. If by year 5 you aren’t on a path of unicorn then prob it’s time to evaluate if it’s worth so much sacrifice or if you should run it as a lifestyle business (or just go do something else).

If the product isn't making enough money to pay people by year 5 you're not a startup founder you're just unemployed with a side project.

> I think the OP should work on his company for more than 4 months and have more than 10 employees for at least a year to truly understand what it is to be a founder.

Have you been an employee in a startup? Because in my experience it has a lot of the downs of the founder, but none of the ups.

So start your own company then.

Maybe I should, so that I could abuse from the employees and then explain how I deserve to get rich if MY startup succeeds but my employees don't (because it is MY startup, you see? I don't need them).

Good luck with this! Let us know how it goes.

Founders have leverage, because they started the company. If you don't like it, start your own and don't join someone else's.

Where I come from, that's an ultra-liberal point of view. "Instead of saying that Elon Musk does not deserve 68b as a salary (because no human does), then maybe you should become ultra-rich yourself".

Sure. You just completely missed my point.

I mean, you could certainly start your own company, and then be more generous with your employees around these sorts of things. Sadly, you might have more trouble attracting investment, but you could probably still pull it off.

Which would not solve the problem of startups generally being a Ponzi scheme and being toxic for employees, though.

> Have you been an employee in a startup? Because in my experience it has a lot of the downs of the founder, but none of the ups.

Have you been a founder? If not, I'm not sure you fully realize what goes into the job. Everyone wants to be a founder, but nobody wants to _be_ a founder.

> I'm not sure you fully realize what goes into the job.

Can it be a lot worse than working as many hours as possible and burning out? Because startup employees do that, without the compensation the founders get.

To be fair, most startups fail, and the founders of these companies can end up with similar or worse compensation than their employees. Maybe they've volunteered to take a lower salary than their early employee. Maybe because by the time they've started hiring employees, they've been working without any salary at all, burning through their savings and credit cards for a year or more before getting any meaningful funding.

My advice would be not to do that. Set firm boundaries when you discuss the role and then enforce them. No employee will ever care as deeply about a company as its founder, and good founders understand that.

I often think about how if more people understood the median cap table life cycle from Seed to Acquisition/Shut-down/IPO, there'd be half as many VC-funded companies and twice as many bootstrapped companies every year. Thank you for sharing your experience towards that goal.

Unless you're doing some niche b2b thing where you have no personal connections (in which case, why are you doing it at all?), the differential financial returns of going with VC are often negative, if not neutral. The main diff is you can "fail up" into the investor class if you prove your worth but the business goes sideways. But even that is a dissatisfying career for most founder-type people.

To whoever needs to read this: start your own company, avoid raising money.

I think a part of the problem is that if you've chosen a market where VCs do want to invest, and you decide not to take their money, someone else is going to take it, build and grow faster than you, and out-compete you into the ground.

Sure, maybe their longer-term trajectory is unsustainable growth and disappointing surprises for founders and employees, but by that point your bootstrapped company has already shut down.

But, by all means, find a market where there's scant VC money to be found, and you can probably bootstrap for quite some time without funding. And maybe you will eventually decide to take on funding, but instead of giving 60% of your company away to get it, you only have to give away 30%. Or you decide that giving away 60% is fine, in return for 10x as much investment as you might otherwise get at an earlier stage.

I know a non-zero number of people who have gone that route, and it's worked for them. If I were to start a company, I'd aim for this model myself. But I would have to be very careful choosing my product and market.

> I think a part of the problem is that if you've chosen a market where VCs do want to invest, and you decide not to take their money, someone else is going to take it, build and grow faster than you, and out-compete you into the ground.

This is in the talking points for the VC value prop, but to be honest when you get to the bottom of all the qualifiers and explore all the examples in depth, it's a flimsy defense.

Of course you're not going to bootstrap a company with large, up-front capital requirements. That removes the risk factor "choose a market where (smart) VCs invest". It means you're fishing in $100mm up to maybe $1B markets.

Now you're left competing against the (dumb) VCs who are spinning their wheels trying to win in a market where capital doesn't actually help you grow.

That means all you have to do is survive and grow YoY – which is the default state of a sensibly-run company – until the VC-funded people give up and move on, (which they are contractually bound to do within 10 years). And even if they stick around, there are very few markets that are winner-take-all.

I think sometimes we fall prey to the mentality of thinking that things are harder than they are. The investor-funded universe completely dominates tech media, so it's perhaps not surprising. But yeah, if you think critically about each of these steps, we aren't as dependent on them as meets the eye. 100x more the case if you have good technical and business skills on your founding team.

I don't the the author is saying that founders don't deserve 400k after 7 years of hard work.

He is saying that it is sketchy that this is hidden from employees.

No. the author is not saying that.

Er... that is essentially the entire premise of the article, so I'm not sure how you can make that assertion.

To be a little more generous, the author is perhaps not saying it's sketchy, but is at least saying it's odd and unnecessary to keep this knowledge from employees.

After the Series B for my last company the three founders owned something like 45% of the outstanding shares, and when they sold took out something like 40% of the price. What were the rounds like that led to less than 10% after 3ish rounds?

I read GP as very few founders individually have double-digit ownership, not collectively.

45 divided by three is 15 is double digit.

Yes, but a single example of this doesn't make it common.

> exercising options up to 10 years are not uncommon

10 year expiration is the standard, yes, but only if you stay with the company. Most still kill your options 90 days after you quit or are laid off or fired. There's been a small but noticeable trend of companies not pulling this garbage, including the article author.

> I think the OP should work on his company for more than 4 months and have more than 10 employees

Yeah, I thought it was funny that the author seemed to be speaking so authoritatively after so little experience as a founder. I've never been a founder myself, but I would put much more weight behind the words of founders who have been doing it for years and decades.