[sandworm101]

>> one of the founding employees

If you were an employee, you were not a founder. A founding-employee would be someone who explicitly "invested" time/money into a company without compensation. If you are also an employee earning a wage you better have a written agreement stating what amount was "investment" and what amount was compensated wage.

[lumost]

Startups typically offer employees, particularly early employees, substantial equity compensation. If the employer is offering this compensation in bad faith, or otherwise preferring one equity holder over another without an explicit contract - then they are at the very least a crappy business partner. A founding engineer with a 2% stake could be missing out on 5-10 million of this transaction.

As an aside, most founders are paid during the entire project. It’s not hard to raise a preseed round to get yourself paid for 6-24 months to work on an idea. If a founder chose to bootstrap - that’s all fine, but let’s not pretend that the employees aren’t taking massive career risks vs “standard” employers.

[lovich]

> If the employer is offering this compensation in bad faith, or otherwise preferring one equity holder over another without an explicit contract - then they are at the very least a crappy business partner.

I don’t know about you, but every company I’ve ever worked at is a shitty business partner if that’s the metric. The standard has always been I get what we agreed to if I was lucky, and otherwise I got full “I’ve altered the deal, pray I don’t alter further” and dared you to defend your rights.

I actually have called their bluff a few times and gotten some money out of it, but it was always a year long event or more to resolution and involved risking even more money on lawyers.

[crote]

Just one slight problem: people need to eat, and food costs money.

Your startup won't succeed when its founder starves to death. It's why the founder will usually get a bunch of cash during investment rounds [0]: they can't focus on the company if they are constantly worried about cash in their personal life. Unless the founder is already independently wealthy, it is a guarantee that they'll be employed by the company and being paid a living wage. Heck, in some countries this is even legally required!

According to your logic, no successful startup will ever have a founder, as any form of pay instantly degrades them to regular employee, and any kind risk taken and below-market salary is completely irrelevant. Never mind the fact that they are taking home a minimum-wage salary while working 100 hours a week - they are earning a wage so they can't possibly be a founder.

So if this logic already breaks down for the founder, why couldn't it also break down for early employees whose compensation is mostly in stock options? How is their situation any different from the founder's?

[0]: https://www.stefantheard.com/silicon-valleys-best-kept-secre...