Amy J, RE: Startups
Great list regarding startup advantages!
How about the primary con the way I see it:
1. Put in 80 hour weeks to make a few people rich. Employees #37 and #38 get 0.11% and 0.1% respectively, make great sacrifices to family life, create dysfunctional families, typical American success story.
Non-quants can ignore this section
If your company hopefully sustains a market value of $100 million six month post IPO, above mentioned employee gets (0.1 x 0.01 x 100,000,000) = $100K. Assuming that said employees put in 20 extra hours per week compared to a regular corporate job over three years, that works out to $32 per hour which is ridiculous. (I did get a few offers like that several year ago. Whenever I presented the above analysis to the CEO, his response was something like your list.)
I think startups are a great way to make the founders rich. And maybe the first few employees. For the unfortunate rest, I question how good a deal it is.
I agree that there is great psychic reward that your detailed list alludes to but you do end up trading off very valuable leisure time for that.
I am a fervent believer in capitalism. I think the VCs do take a large risk even though some of them have gotten greedy over the last few years. I think the startup employees work extremely hard but the way the system is set up it favors the founders/management. They have too great an incentive to "sell out." Both from their VCs and from their own bank accounts.
My point being: Startups exist for a financial motive. The items on your list help the startup achieve its financial goals. But there are several disadvantages as well.
Any comments? I am asking you because I respect your opinion and not to score any points. For the same reason, if you can resist it, no psychoanalysis about me please :-)
(Assume that I am reasonably well-informed about startups. Several college mates of mine have founded successful startups, work for VC companies, are VC fund investors themselves, are startup employees from #3 to #131.) |
