[poof131]

Definitely agree that the iron law needs to be relaxed. You can give special voting rights to founders stock to make sure they maintain control of the company, but currently the risk/reward ratio between founders and early employees is way out of whack. Glad to hear investors are keen on this since I think it should make startups stronger.

Equity is a key component of modern compensation with better tax implications and more upside.[1] The “built in the garage” myth needs to die and doesn’t justify 100-1000x payouts when early employees are taking a significant risk too in opportunity cost. The main issue currently is information asymmetry as most early employees don’t see the cap table, don’t realize how much others own, don't understand how little risk most founders take, and don't know how much they are truly giving up in total comp from more established companies.

[1] https://medium.com/the-wtf-economy/what-paul-graham-is-missi...

[tptacek]

I wonder, if you do the math on equity compensation versus compensation in the job market as a whole, if returns from equity aren't just a tiny, insignificant sliver of overall compensation that we happen to take seriously because of availability bias.

Either way, I do not believe it to be a "key component" of "modern compensation". Tech companies can pay strong salaries just like other companies. They choose not to. That could change, and I think should.

[rabidrat]

Relaxing that 'iron law' would be a significant blow against capitalism itself. That's what Occupy* wants, and not what VCs want. But VCs write the rules and there's no real pressure to write them differently.