[BitGeek]

Because they hire too many people. The more people you hire, the less you get done per unit people. With development, the more people you hire the less you get done period.

Virtually every startup that raises more than $100k is wasting half the money its spending. Most of them don't even realize it.

I love the comment by the guy who said "founders aren't willign to forgoe the $100k job they had" LOL. If your founders wouldn't rather have equity than a salary, then your startup isn't getting their bet... and they have the inside info.

The more money you take, the less equity you have. Thus, if you believe in your idea, you don't want to take any money....logically.

But the reality these days-- especially in "Silicon Valley" where the reality distortion field sets in-- is most startups are just built to flip- they want the big vc money the big burn rate and the quick exit to an acquirer... they aren't started by people who want ot build a business.

This is why SF is not a good place to build a company and why you shouldn't listen to the "spend lots of money" advice you tend to get (eg: you need a lawyer you need lots of employees, you need office space, you need to buy servers, etc.)

[aswanson]

If your founders wouldn't rather have equity than a salary, then your startup isn't getting their bet... and they have the inside info.

What a way to put it. Genius.

[flashgordon]

oh you are right about the "if you founders wouldnt rather have equity than a salary ...".. absolutely... but I am not sure if its the choice is simple. If you have to feed a family then equity wont pay for it... But yeah sure, a team that is driven by equity rather than money does indicate a good idea (or a very stupid team!)...