<story><title>Are founders really 1000x more valuable than their employees?</title><url>http://venturehacks.com/articles/employees-founders</url></story><parent_chain><item><author>jasonmcalacanis</author><text>This isn&apos;t about who is more valuable, this about who took the &lt;i&gt;risk&lt;/i&gt;.&lt;p&gt;Employees take little or no risk in 99% of cases. You are not taking a risk making 75% of your max pay at Google/Facebook/Zynga/Twitter by going to a startup. You are taking a 25% haircut to be part of something new/small/etc.&lt;p&gt;However, starting something from scratch, incorporating and putting your reputation on the line is a major risk. If you are the creator you carry the lifetime risk/reward of your startup.&lt;p&gt;The founder(s) of Friendster, PointCast and Webvan will always be remembered a certain way. As will the founders of Twitter, Groupon, Yahoo and Google.&lt;p&gt;The employees that come after them do not carry this personal risk/reward issue. They can always say &quot;I joined Freindster and it was a great learning experience.&quot;&lt;p&gt;The founder of Friendster will have to explain for all time why they were first and failed so horribly. How they missed the opportunity to be MySpace, LinkedIn or Facebook.&lt;p&gt;That&apos;s the real difference in my mind: personal reputation risk.</text></item></parent_chain><comment><author>gamble</author><text>I really question this idea that (YC-style) startup founders are taking on more risk than employees. Few founders have a significant amount of personal capital invested in the business. If the startup fails, they&apos;re not out of much more than a job. In fact, early employees are in a far more precarious situation, since they&apos;re much more likely to lose their job than the founders. And if the company does go down, the founders have a much better entry on their resume than someone who took a job at a small company that no one has ever heard of.&lt;p&gt;At least in America, there is so little stigma associated with a failed startup that I don&apos;t see the reputation aspect of your argument. Short of flat-out malfeasance, a failed entrepreneur is far &lt;i&gt;more&lt;/i&gt; fundable than someone who has never started a company.</text></comment>
<story><title>Are founders really 1000x more valuable than their employees?</title><url>http://venturehacks.com/articles/employees-founders</url></story><parent_chain><item><author>jasonmcalacanis</author><text>This isn&apos;t about who is more valuable, this about who took the &lt;i&gt;risk&lt;/i&gt;.&lt;p&gt;Employees take little or no risk in 99% of cases. You are not taking a risk making 75% of your max pay at Google/Facebook/Zynga/Twitter by going to a startup. You are taking a 25% haircut to be part of something new/small/etc.&lt;p&gt;However, starting something from scratch, incorporating and putting your reputation on the line is a major risk. If you are the creator you carry the lifetime risk/reward of your startup.&lt;p&gt;The founder(s) of Friendster, PointCast and Webvan will always be remembered a certain way. As will the founders of Twitter, Groupon, Yahoo and Google.&lt;p&gt;The employees that come after them do not carry this personal risk/reward issue. They can always say &quot;I joined Freindster and it was a great learning experience.&quot;&lt;p&gt;The founder of Friendster will have to explain for all time why they were first and failed so horribly. How they missed the opportunity to be MySpace, LinkedIn or Facebook.&lt;p&gt;That&apos;s the real difference in my mind: personal reputation risk.</text></item></parent_chain><comment><author>mattmanser</author><text>This seems a weak argument, it&apos;s only applicable once you&apos;ve actually got a reputation to protect. The vast majority of founders aren&apos;t celebrities.&lt;p&gt;Given that many entrepreneurs just keep failing and then trying again and again and again it doesn&apos;t make much sense to me at all. There is no risk. Maybe it will be embarrassing if Malhalo fails, but I&apos;m sure that won&apos;t stop you trying again.&lt;p&gt;Personally I think there&apos;s no good reason, founders aren&apos;t actually worth much more than the employees, it&apos;s just the way capitalism works. To the victor goes the spoils. Hence the occasional Marx being thrown into the mix to try and keep the worst excesses in check (overall I think capitalism&apos;s been a greater good for humanity). I think we&apos;re due a Marx soon if the earnings divide keeps growing as it is.&lt;p&gt;Don&apos;t try and rationalize it, it&apos;s just natural greed. But it has benefits too, all those jobs that wouldn&apos;t have existed.</text></comment>