[freefaler]

As a 2-times founder, one VC funded and one bootstrapped I think there is a fundamental difference of the world view of a founder and a cash-optimizing employee you're missing.

Startups are just businesses. Business owners value money, but they also value independence and freedom to do what they want to do. The "don't tell me what to do" gene is highly correlated with them. The only resource you can't buy is your time and investing it into your ideas brings a lot of meaning into the daily slog. Also if you have your own company, you decide the rules and people you surround yourself with. If you spend 1/3 of your life working, this is a non-trivial contributor of your quality of life.

This is the first reason. Founders really hate working for other people.

Regarding salaries, the more cash you burn, the less time you have to understand the market and create the product. Salaries are expenses and you need to be very stingy until you get to profitability.

This is the second reason.

And something I've seen in the "startup" crowd. From the VC marketing bullhshit they assume that the "only" way to create a company is "to create the next billion dollar company". It's the game of the VC's, grow and sell. Yes, 3% of Facebook can be worth more than 40% of 5 Million ARR company, but if you multiply it by the chance of creating the next Facebook you'll see that it's riskier and you loose too much control and the first reason you're doing your own thing.

In summary, if you're thinking about short term salaries it's best not to try to do a startup, better find a good paying job and invest in an index fund. This will be safer and on average yield better.

[bruce511]

I concur. If you are -asking- this question, then VC startup isn't for you.

If you are asking this question, then bootstrapping really isn't for you.

That's OK. There are these 3 very different employment models for a reason. They appeal to different people. Neither is better than the others.

While the original question is about immediate financial reward, that's only one part of the equation. Other parts include risk, control, secureness, impact, potential etc.

Ultimately the path for you depends on your personal value to each attribute. For the best possible returns, at lowest risk, go be an employee. For most control, good potential, mid-risk, bootstrap. For high risk, massive potential (but most likely implosion) go VC. All

[alephnerd]

> From the VC marketing bullhshit they assume that the "only" way to create a company is "to create the next billion dollar company"

We don't (or at least we shouldn't).

The issue is as a VC you have LPs who are very demanding about returns. VC represents a minority of their total capital outlay, but they put money in VC in order to get outsized returns.

If I'm the Ontario Provincial Pension and I gave a VC US$200M, I expect to make way more money from the VC fund than I would have investing in the stock market, or bonds, or gold, or to a PE/IB/Hedge Fund.

VC is just another financial instrument that is a part of diversified portfolios.

If I had to use stereotypes, if PEs are alcoholic coke heads, VCs are kombucha swilling stoners and trippers.

[salomonk_mur]

If you are the Ontario Provisional Pension, you expect to make roughly the same in every category you invest in, since every higher return option comes with higher risk.

It's the cornerstone of investing. You diversify to hedge risk, not to increase total yield.