Long-winded reply, but 3 years in the valley during the dotcom boom working at a variety of ultimately failed startups taught me:
1) The expected return of a startup does not compensate for the loss in compensation because 0.1% ownership assuming even a generous 10% chance of success times $1M (assuming a magical $1B buyout/IPO) is only $100,000 divided by the number of years worked. You wanna take a 30% haircut for those odds?
2) This equation shifts dramatically if you get one of those fancy three-letter titles and the equity that comes with it. Which is to say do not go to a startup without one. Failing that, the more of a George Carlin outlook you develop towards the three-letter title sorts blowing smoke up your keester, the better off you'll be.
3) Override number 2 for a sufficiently high consultant rate. Crossing my palms with silver cures all ills and shows that either you're an utter fool with too much money (most of the time) or you have a relatively good grasp of the costs of getting things done right.
4) Why bother with a startup in this day and age when, as the author said, you can just build something yourself without leaving your current gig? 100% equity times a 1% chance of success times ~$10M equals the same expected return without any sort of haircut whatsoever.
1) The expected return of a startup does not compensate for the loss in compensation because 0.1% ownership assuming even a generous 10% chance of success times $1M (assuming a magical $1B buyout/IPO) is only $100,000 divided by the number of years worked. You wanna take a 30% haircut for those odds?
2) This equation shifts dramatically if you get one of those fancy three-letter titles and the equity that comes with it. Which is to say do not go to a startup without one. Failing that, the more of a George Carlin outlook you develop towards the three-letter title sorts blowing smoke up your keester, the better off you'll be.
3) Override number 2 for a sufficiently high consultant rate. Crossing my palms with silver cures all ills and shows that either you're an utter fool with too much money (most of the time) or you have a relatively good grasp of the costs of getting things done right.
4) Why bother with a startup in this day and age when, as the author said, you can just build something yourself without leaving your current gig? 100% equity times a 1% chance of success times ~$10M equals the same expected return without any sort of haircut whatsoever.