> Founders might get a wage to avoid personal financial stress
How do you make a living as a founder if you don't get a wage? Is that really a norm?
> but then also need skin in the game, typically by investing personally
And also this. Does it assume that you will invest your savings or what exactly?
The majority of successful founders are already wealthy. Those who aren't, have a pretty high chance of going personally bankrupt in the process
Until the startup has investors that agree to pay the founders a wage (to reduce personal financial stress so they can concentrate on the company) - or the startup is profitable - it's vital that your savings don't run out...
I understand the part where you invest your time and money to build the PoC but I can't imagine running a startup with VC-backed investment without paying out myself a wage. That seems crazy to me if true.
If you've got an independently weathly founder then both parties typically prefer equity only.
Traditional seed investors may not agree anything beyond minimum wage. It depends though.
It entirely depends on your personality and circumstances, it's certainly not for everyone.
In very very very few cases, sure. Also, the wealth isn't the only or at least not the biggest motivator for many people trying to build their startups. But I get it - my money my rules disguised under show me how motivated you are to carry this through.
I'm just saying there's two sides to the coin, that's all.
I think there's a very genuine element of 'show me how motivated you are' you also cannot expect to get a normal standard rate company salary when you own most of the equity and aren't profitable. I think it's reasonable on balance.
That makes me wonder what is the profile of a startup founder who agrees to an infinitely larger amount of complexity and stress for ~4x less income? The ones that got lucky so they don't care or don't have much loose or what. Crazy.
In markets where capital is more scarce, people may want to avoid giving up more equity.