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0 pointsWJW4y ago0 comments

Isn't that exactly what "risk" means in this context? Sometimes you get very rich (see the early google/microsoft employees), usually you get nothing or almost nothing. If you don't want to play the lottery there is nobody forcing you to work at startups.

0 comments

michaelt4y ago

If you were promised 0.1% of the company and the company ends up worth $0, that's just the risk of taking equity.

If you were promised 0.1% of the company then some financial shenanigans with 'dilution' or 'liquidation preferences' mean the company gets acquired for $200,000,000 and you don't see any of it, then you got taken for a fool.

WJWOP4y ago

Yes, if you don't know the rules of the game you will often lose because you did not see some (legal) move coming. Investing is the biggest game in the world and big boy rules apply. People who are unable or unwilling to learn how options and startup equity work should not take payment in equity, because they will get cleaned out as predictably as a drunk guy at a poker table.

lumost4y ago

At the end of the day, any business partner can choose to screw you. VCs/Investors have additional protection by way of retained legal council, clawback clauses and occasionally debt based positions and liquidity preferences.

An employee will simply never have access to that, the fact that it's been normalized for founders/investors to actively attempt to confuse and fool employees will simply drive skilled employees out of startups.