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There is a lot of truth to all these observations. Would have just seemed anecdotal points even just 1-2yrs ago, but I feel what GP is listing has become the normalized expectation now. On founder salaries, the days of ramen garage bootstrapping seem behind us. To be able to even live in these high cost Startup hubs cities/countries, needs higher salaries that is used to in the 90s and early 2000s. I'm not talking about crazy founder salary asks, which I have seen (pre-seed co-founders asking for $130k from their investors!), but even taking a "cut" still puts you in 80-100k range. If folks have families, it's a tough ask to go lower. Founders not cutting their personal finances to the bone, I think is fine, and I think it's a good thing the expectation is mostly gone that you have to somehow prove your commitment to investors or whoever by how broke you can go. It is quite sadistic. I think the bigger issue is startups being seen as "risk free" and that is totally a problem. Not because we want everyone to fear for their life each day the come to work, or because we want to scare people off from joining. It's because it messes up the incentive structure and misalignes people. Startups need people who have, taken all the info in, are aware of the risks, and dive in head first anyway. Because they are committed to the mission/idea, want to just do something they find cool, or even because they want to roll the dice and strike it rich...whatever the reason. This is not to exclude people with lower risk tolerance, or who _need_ to make higher cash comp to meet their commitments...that's fine, just join later on at a point where the risk meets your tolerance. It just does not work if the latter type of person joins early. To give a recent example. I was reading through one of those layoff lists that come out of folks who are looking for new roles post a company layoff event. I recognised a name. Turns out it was my former account manager at a very big (and safe) enterprise tech company we buy from. This person had moved to, at the time, a decacorn startup, had been there 7mo and was now out the door. This startup was a rocketship, and no one was really expecting anything to go wrong. But like you said, they are never "risk free", and this macro economic shock hit their trajectory and cuts were made. Unfortunately they hit this person. I don't know if they made the move to a startup with the risks in mind, or if they just saw it as a move to (probably) higher pay and a better "lifestyle". |
There was just way too much money and VCs didn’t know what to do with it.
Prime example, of course, would be the entire crypto/web3 industry.