Re:Hotshot Tech Founders Face a Dilemma: Lie Low or Live Large
by wpietri on Monday November 20, 2017 @10:18AM
(#15740445)
Yes, until the IPO for companies that are on the going-public track. Until sustained profitability for companies that intend to stay private.
> Can you really say that a company that has a valuation in the billions [...] is not considered a success warranting of the founders taking some money off the table?
I can definitely say that. Are the employees and investors getting rich at the same time? If not, then there may be pragmatic arguments for paying off founders (e.g., they will have an incentive for selling the company too soon), but I don't think there's much of a moral one. And if it happens, I think there is still zero excuse for the founders living large while the people actually doing the work and providing the capital have not received the same rewards.
> Not to mention the fact that lots of companies simply remain private always
This is just muddying the waters. This article is clearly about VC-backed companies, which are all about the exit. For truly private companies, founders get their dough when the company is in the black long enough that they start paying dividends or partner draws.
> I don't get why suddenly when it comes to tech startups and founders, the normal rules of business are suspect.
They aren't. Money-losing companies giving their founders tens or hundreds of millions of real cash dollars is not within the normal rules of business.
> Can you really say that a company that has a valuation in the billions [...] is not considered a success warranting of the founders taking some money off the table?
I can definitely say that. Are the employees and investors getting rich at the same time? If not, then there may be pragmatic arguments for paying off founders (e.g., they will have an incentive for selling the company too soon), but I don't think there's much of a moral one. And if it happens, I think there is still zero excuse for the founders living large while the people actually doing the work and providing the capital have not received the same rewards.
> Not to mention the fact that lots of companies simply remain private always
This is just muddying the waters. This article is clearly about VC-backed companies, which are all about the exit. For truly private companies, founders get their dough when the company is in the black long enough that they start paying dividends or partner draws.
> I don't get why suddenly when it comes to tech startups and founders, the normal rules of business are suspect.
They aren't. Money-losing companies giving their founders tens or hundreds of millions of real cash dollars is not within the normal rules of business.