I'm still making up my mind on how to think about these issues. I tend to oscillate between "fraud" and "well, that's what the market will bear".
Everything you've mentioned applies only post a few rounds of mega-million funding.
If you're pre-funding, then you're taking a humble salary - if any salary at all.
So clearly, there's some kind of moral hazard post successful funding. That seems more or less unequivocal and it's somewhat gross but I'm not sure what should be done about it other than vitriolic twitter comments whenever people talk about meritocracies and how inequality isn't a big deal because you too can learn how to code.
The current way of thinking about it is golden handcuffs align vc and founder incentives re: exit timing. Which is why Snapchat turned down $3 billion; the founders were provided with fuck you money and were under no pressure to flip before they've extracted maximum value.
REGARDING RISK AS A WHOLE,
It's not clear to me that founders of VC backed companies - from the founder's perspective, and in this job market - actually incur any exposure to risk above and beyond opportunity cost.
Saying that you quit your job to slum it out for six months building a start up is a pretty good resume polisher, no? Doubly so if you actually investment and treble if you got acquired or otherwise exited.
The way I see it your worst case scenario is suffering reputational penalties by pissing off important investors when/if you a) run out of money or b) try to exit early from your commitment.
This is not to say that VCs should have higher equity portions or that all that hard work and sleeplessness should go unrewarded, but more that equity arrangements are like so because that's what everyone negotiated, and not because of some intrinsic "deservedness".
Everything you've mentioned applies only post a few rounds of mega-million funding.
If you're pre-funding, then you're taking a humble salary - if any salary at all.
So clearly, there's some kind of moral hazard post successful funding. That seems more or less unequivocal and it's somewhat gross but I'm not sure what should be done about it other than vitriolic twitter comments whenever people talk about meritocracies and how inequality isn't a big deal because you too can learn how to code.
The current way of thinking about it is golden handcuffs align vc and founder incentives re: exit timing. Which is why Snapchat turned down $3 billion; the founders were provided with fuck you money and were under no pressure to flip before they've extracted maximum value.
REGARDING RISK AS A WHOLE,
It's not clear to me that founders of VC backed companies - from the founder's perspective, and in this job market - actually incur any exposure to risk above and beyond opportunity cost.
Saying that you quit your job to slum it out for six months building a start up is a pretty good resume polisher, no? Doubly so if you actually investment and treble if you got acquired or otherwise exited.
The way I see it your worst case scenario is suffering reputational penalties by pissing off important investors when/if you a) run out of money or b) try to exit early from your commitment.
This is not to say that VCs should have higher equity portions or that all that hard work and sleeplessness should go unrewarded, but more that equity arrangements are like so because that's what everyone negotiated, and not because of some intrinsic "deservedness".