[DoreenMichele]

Startups are unproven ideas.

MAANG companies are proven businesses.

Lots of people would say "Yes! I shall pretend to work on establishing a viable business if you throw scads of money at me!" And not ever really develop a viable business.

Founders get rich by having equity. Some of them get stinking rich.

It's basically a form of betting that incentivizes actually succeeding at finding a viable business model. That's the only way that makes sense. Otherwise you are paying people to pretend to work.

The "pretending to work" issue gets talked about a fair amount. People attend conferences because it feels like work. People rent offices and set up business bank accounts because it feels like work. Etc.

Real work involves solving a real problem and getting people to pay you for it.

That doesn't automatically happen because people call themselves "founders" and invent a business name etc.

[smfjaw]

I grew up lower middle class, which gave me a good hunger to go to college, get a degree and make some money. VCs are trying to incentivise that same mindset except by making with riches equity instead of opportunity

[zooq_ai]

Exactly. Also why startups within an organization fail at a higher rate, because there still treat it as a 9-5 job with no hunger or fear of failure.

[extr]

What exactly is the argument here? That we can't pay founders too much, or else grifters/lazy people would take over to line their pockets with VC dollars? That's basically a non-sequitur.

The issue at hand is that there is probably some correlation between a founder's opportunity cost and probability of success. Smart, driven people could be doing a lot of things with their time. Working for years on end for $200k/year for a small probability of a large exit is not practical for a lot of them. Working for $400K might be. OP's point is that as an investor, you might be better off having fewer, higher quality founders and paying them the higher opportunity costs. Would you rather fund 10 teams of monkeys or one team of ex-executives with proven experience building/scaling/etc?