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In the companies I've seen that are funded by the founder directly, the founder winds up with an unhealthy (actually, toxic) personalization of the company. It quite literally belongs to him, and he treats the employees accordingly.

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that's a function of Silicon Valley personalities and the narcissism. When normal people run such a company we call that a family business

Silicon Valley certainly doesn't have a monopoly on those traits. I've known some seriously psychotic family businesses too.

I have unfortunately experienced exactly what you describe.

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