[ig1]

They can't compete. They'll never be able to compete on the money front.

If you're a senior C++ lead dev working in the front office of an Investment Bank you can make 250k-500k/year.

If you join a startup as an early employee and get 1% equity , assuming a 10% chance of exit after three years, the company would need to have a $1 billion dollar exit for the risk-reward equation to break-even.

There are a lot of ex-finance developers in the startup world, but overwhelming they're there as founders, as that's the only way they'll get enough equity for it to be worthwhile.

[johnrob]

Your risk reward equation doesn't account for preferences. There are a lot of folks out there that would be turned off by a 0% chance of a big exit, which is what 250-500K/year is. Every startup offers a tiny chance of fame and fortune that a normal salaried position lacks.

[ig1]

Even if you want a chance of a big exit, it makes more financial sense to just put 20% of your salary into angel investments every year.

Sure there are other factors at play such as lifestyle, corporate culture, etc. But when it comes down to hard money startups can't compete with investment banks.

[burningion]

Just out of curiosity, where can I get more info on risk-reward equations?