[state_less]

One reason you don't see founders is that, it is so brutal. The odds are stacked against you. Even if I buy lotto tickets with a positive expected return, the variance can make it untennable/unworkable. One would hope the VC comes in and smooths this situation out some, so that more people participate. You're going to have a lot of brilliant people going down dead ends on no fault of their own, why not cushion the blow? Give entrepreneurs, yep give, the money to them to make their product. Let them own >51% of the company. Offer to pay them fully in their own shares or some split between the fund shares and their own company to cushion the blow. If I'm starting a company, I'd take my own shares mostly but I'm not arrogant/foolhardy enough to put my chances of success equal or greater than a whole pool of my peers. I'd bet some of us will be successful, I just don't know who.

To answer another response on this thread about taxes, if it were in fact market value, I'd sell the shares like any other share and pay the taxes owed.

Note: I know there are issues surrounding the number of private owners a company is permitted and other regulations. I'd simply invite a corporate lawyer to take a stab at it. Maybe a large holding corporation that would be public and issue shares to you related to your stake in startup sub corp(s) (akin to paychex, trinet, etc...)

[warcher]

More and more I find myself reasoning about competitive advantage and stuff like that-- whenever I put up with something really unpleasant, I think "Hey, how many of my competitors did I just shake off?"

If everybody got funded, I think the market would just devalue ownership of a company, since, with the barriers to entry knocked down, it wouldn't mean as much. Think about the erosion of the market value on a college education over the years.