[n72]

I'm curious what you would recommend to the me of five years ago (this sounds like a challenge, but it really isn't — I'm genuinely interested in your take.)

I started with three other guys on day 1 of a startup. They had money to put into the startup from a previous venture. I didn't but took 50% pay cut to lengthen the runway, as it were. After 9 months the company was almost out of money. I worked for free for 3 months after which we got the product off the ground. (They paid themselves during this time from the little money the company had left.) Two years later we had a very successful exit. For the fact that I worked at 50% paycut and worked for free, I demanded equity. Had I taken an IOU I would have missed out on a significant payday. The money which I didn't take from the company was just as important as they money they put in: without either one we would never have had time to release the product.

[tptacek]

If the upside of investing 50% of your pay was significant, the upside from your allocation as a cofounder should have been far more significant in a successful exit. To me, the delta between a paid off IOU and a return on equity purchased with a pay cut sounds like cheap insurance. But I don't know enough about your situation to say.

Reasonable people can disagree; I'm invested only in the idea of giving 50/50+IOU its fullest, fairest hearing.