Comment by al3x | Hacker News Reader

Comment by al3x | Hacker News Reader

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I'm kind of surprised that this conversation is solely about founders (well, and which Porsche to buy). There's only a few founders out there, and a lot more regular ol' employees.

Here's the thing about the scenario in this post: the founders and investors that are swinging for the fences and taking big risks probably have their nest eggs in place. But what about their employees? A modest exit could mean security for them. That exit may not cement the founder's "legacy", but it might give a few, a dozen, or even a big group of people a stable financial footing for the first time in their lives. What's more important? What has the most utility? I'm honestly not sure.

Having been an employee in that scenario and now a founder, I can see both sides. Personally, I'm glad to see more investors making sure that early employees get an opportunity to get a bit liquid if their founder bosses decide to shirk acquisition offers and spin the wheel of IPO fortune.

But, and this is important, this isn't an alternative between "exit with fat sacks of cash" vs. "exit flat broke", for either the founder or the employees. Presumably, in the "founder drives a Porsche" scenario, the startup is not in imminent danger of collapse and the employees are not subsisting on ramen. So if the founder decides not to cash out, the employees have the "stable financial footing" of having a job that, presumably, they like and are good at. On the other hand, if the buyout was a talent buyout aiming for the founders or a shutdown buyout, if the founders decide to cash out, the employees may have some $$ in hand but are back on the job market. That's not exactly the most stable of positions.

Indeed. Say you were an employee with a mere 1/10 of 1%:

$6b * 0.001 = $6m

I'd say $6m would be life-changing for most employees.

If security is something the employees are worried about, they should not have joined a start-up for whom an exit is their best chance.

Startups are volatile environments with risky financial conditions, hopefully driven by people for whom making the best impact in their chosen area is the most important thing. It should all be about the product, making the best decision for the product, championing the product.

Employees are valuable and necessary. I would never argue that employees contribute less then management in general. However, it's not a founder's place to make sure they get security via an exit... It's their place to make their product fantastic, which as a side-effect, should keep the employees employed.

If they want security, they should bet on a stable job in a stable market. It's boring, it's not as challenging... But it's safe.

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