People way overestimate the life of founders
IIT grad here building a venture backed startup. I think 99% of folks here believe that venture backed founders are super entitled and in a much "cosier" position than employees Just sharing a few facts about our journey so far if it helps anyone improve their perspectives- 1) Paying ourselves 33% of our campus salary & 60% of what we are paying to our employees (Talking about Pure Base Salary here, not including ESOPs) 2) Insane stress - You basically have to raise money to build (esp if its deeptech because of the high fixed costs) and there are predefined metrics you have to always chase, sometimes just beyond yourselves. Your product will be copied if it's good because well, they always have more money than you. You work 7 days a week for insane hours, chasing metrics required to be "afloat" 3) 99% of venture backed startups result in 0 liquidity gain for founders. So basically in all likeliness, everything is for a net negative return compared to if we took the campus job So, when you wholeheartedly bash founders as if they are sitting On a goldmine while you are toiling for THEIR gold Treasure, just understand that more likely than not, there is not really any gold but rather an irrational hope they are clinging to Also, Yes-we pay above market to our employees (100% hike for the last one) but the truth is some startups just Can't afford it. And ironically, there is a much higher looking down on these startups with meagurely paid founders rather than giants like Tech Mahindra paying peanuts to their employees while having a 1000% salary hike for the executives. Yeah, most startups need to do better but please appreciate if someone is atleast trying to do better because trust me, it's INSANELY HARD.. The number of posts I see about Flipkart making hundreds millionaires is way too less than the ones I see about pinpointing at every single mistake early stage startups do & I just wanted to express my opinion on it Peace!
RealGenZ
Stealth
a year ago
If they can afford it, they must indeed pay fair salaries! That's the whole point I am trying to make mate, please see beyond your mindless hate
Sure. But if they can’t afford it, should they still be entitled to run a startup? I have even seen startups exploit new grads by offer unpaid internships, with the usual long hours work.
See more comments
phoebus
Stealth
a year ago
You sir, are an eloquent individual. Somebody needed to say this!
How are my standards so low that I'm easily impressed with men who articulate well 😭😭
See more comments
stupidusername
Stealth
a year ago
My questions to founders (not to you):
1 why fire people instead of founders taking salary cut which they dont?
2 is the firing only way to being profitable? If so they why hire first place? Or was it just stupid made up argument to get away from responsibilities?
3 why treat employees like shit?
4 shouldn’t be CEO fired if company couldn’t achieve the target instead of firing employees who doesn’t have that bigger role to play to achieve the target?
What ever you say 99% of founders are shit and we all know it. You may be in another 1%
Appreciate your clarification though but most of the founders are not like you
RealGenZ
Stealth
a year ago
Ok, I obviously don't have answers to all of these but here are a few thoughts
1) Founders should try to take a salary cut if they are indeed paid well which is true in certain cases I agree. But as i said, many a times it's just not sustainable given a lot of early founders take ridiculously low scenarios
2) the markets keep changing. Let me give you an example - Imagine I raised 5Mn in 2021. Now, based on the market I know I have to get to 10 MN users by 2022 so I hire a few folks in growth. Now, markets change and new metric to care about is 5Mn users but a shit tone of product improvements. So yes, most of the times it's mindless overhiring but sometime it's nor really under control
3. This is inexcusable imo. The least expectation I have from founders is being decent human beings and no decent person treats others as shit so sorry, but no defence to this
4. I mean sure, but trust me CEOs do have jobs which are little un-obvious types and rapid transition of someone else to the role might be difficult if the situation is already bad. So you do the next best option.
Also, sorry BUT I don't agree that 99% of founders are shit, i think its to play with a bad crop + external reputation - atleast 50% of the founders I have met have made a lot of monetary sacrifices + are genuinely super hard working folks just trying to make something work
Qwerty2398
Stealth
a year ago
Good one!!.. but there are some points that have been conveniently ignored -
1. Inital pay may be less. But the odds of hitting gold mine is higher than Employees cashing in on ESOPs. This complaint is nonsense, This is the equivalent of saying - when building a house and during construction the workers are paid but the owners get no rental income.
Most founders skim money thru friendly contracts given to friends and family after certain scale is reached some time even before scale is reached. Most Founders usually do not do this in their initial days, but then they realize the loop holes and game the system.
2. Insane stress is because you promise the moon to raise funds and people who pay money expect the commitments to be met. 10X that stress is transferred on employees. Founders expect that from employees because "founders take less money" than employees. Ask any founder who is bootstrapped, His stress is only till reaching profit, once there is clarity in profitability, its a smooth ride. Focus is only on increasing scale.
3. Net negative return is unlikely. If you are going to compare a startup life before it reaches critical scale against the "likely" salary you would have got if you had joined a company, then the return might be negative. If Not then NO. Founders do not go into personal negative loss unless it is bootstrapped.
Life of a founder is difficult, no questions on that. With limited resources they have to maintain a stable mindset to achieve something. But the ride is worth it, as is the money.
RealGenZ
Stealth
a year ago
Okay, some fair points and some I don't agree at all
I don't think I am saying the odds of founder hitting a gold mine are not higher than employees, I am just saying none of them has a good probability
As said previously too, if someone does shady things like fake contracts etc, they deserve to be called out & bashed. I disagree that most founders are like that. Also, I don't know what you mean about employees having 10x the stress of the founders - if you mean working less hours relatively , making more money & having the option to jump ship if things go south since it's a free market doesn't reduce some bit of that stress, I don't know then..
Anyways, this is never against employees, it's just the unreasonable depiction of founders I find sad
Qwerty2398
Stealth
a year ago
There is no unreasonable depiction. I have knepn employees who killed themselves when they lost thier jobs or due to lack of money from missed salary payments. When i hear stories about founders who struggle to repay dues, i will surely believe you.
See more comments
spidey
Stealth
a year ago
When founders ask (practically force) employees to work late in night or over the weekend, do they realise they are undertaking a contract breach with the employees, or are they just so wrapped up in their own story, that they think their company and the requirement to adhere to employment contracts are beyond them? I understand what you are trying to say, but I think you completely missed what people cry about when they bash founders. They are struggling to survive, when most of the time they have worked beyond the actual contracted time, and underpaid in generals I don’t think the context that you shared excuses any of this behaviour.
LooseGoose
Stealth
a year ago
Those employees have legs and can walk away too.
If the employees didn't take action, it's on them as much as the founders.
Pvykey
Stealth
a year ago
Exactly my point Spidey. Got reduced in my base pay around 3400-5500₹ every month just because I won't work for extra 3.5 hrs each day. Forcing me to walk out and got a reply of didn't meet their expectations when questioned
See more comments
hellotherehappy
Stealth
a year ago
Hey @RealGenZ thanks for the post. I have worked with a lot of founders and I have immense respect for all of them, including you.
On the point of wholeheartedly bashing founders, I can only say that it is a reaction to a wider phenomenon of underpaid, overworked employees venting.
7 years in the startup scene and if there's one thing I can say, it's that most of the ecosystem's problems come from thinking that a hyper romanticised Western way of working (hustle, grindset, VC returns etc.) will work for an Indian market.
If we use our work ethic to churn cheaper products that beat Western counterparts, great. If it doesn't work then we're just left with employees who have been fed western notions of wealth expecting to work in the messy reality that's India. Bangalore is a prime example of this outcome, come back from SF to get stuck in Silk board signal and wonder why you're stressed.
Even your situation and a lot of other founders like you are because we don't have a system that protects people who take risks. And we need to do it in a way that's culturally and geographically relevant. Unless that happens all of this will be directed at one another.
My job involves me working a lot with founders, and while I have come across my share of baboons' backsides and downright scammers, I quite agree with you
VacantFuel98
Student
a year ago
Seems to me like a lot of people here want founders to fail. So much hate against founders on Grapevine.
Pvykey
Stealth
a year ago
Lot of people got affected by founders who pay them mere salary and looting a lot of work from them. With nice words and done fights they manage to make them stay without the proper compensation. Now everyone knows that this is the trick they play for noobs just to extract the work. People who experience things which can't be told as the reason to leave the job during job hopping knows the pain.
You can also say the same thing like this
Pvykey
Stealth
a year ago
With nice words and gifts/ parties*
See more comments
Wagewala
Stealth
a year ago
Being a founder is not easy, yes . But it is risk you chosen, because of asymmetric upside way down the line.
For employees, base salary is fair as upside is limited . Esop hardly hits a home run
RealGenZ
Stealth
a year ago
Definitely agree and that's fair too
BrownRabbi47
Stealth
a year ago
Not sure if you get this question asked a lot, but given your experience with doing a VC-backed startup, would you do it again if you had a chance to start from scratch or you feel trapped in a sense? I've heard some folks raise once a round of $2-4M and just chase profitability after that, no more raising, no over hiring, etc. Once you get to that, you can scale independently, so why even raise?
I've recently started up with a friend and we keep hearing from folks in SF to not go after capex and ops heavy businesses, it would suck the blood and hairs out of you. VCs have become smart and know really well over the years, how to milk the founder in the best possible way. What keeps you going, and would be great if you can tell us about the "targets", what if you don't meet the targets? Would love to know your insights @RealGenZ
RealGenZ
Stealth
a year ago
I would probably still raise if I don't have decent savings pre-starting.
Simply because I won't start If I don't see a chance of building something really really huge and honestly, I think fundraise increases your probability of getting there. Again it might be more stressful as I have always pointed out, but I would have taken up my campus job if I really wanted to avoid this much stress :)
This is a much needed post. Thank you!
There are so many unhappy folks out here who want to be arm chair critic and just criticize founders for a any and every decision that is made irrespective of the outcome. Start-ups are hard, they change you as a human so much but but for all our enthusiastic friends here and on X/twitter, founders are the one swimming in money everyday and just getting their employees work 24/7.
Any reason you’re paying yourselves so little? Since it’s a funded startup, what’s stopping you from having a better salary?
VacantFuel98
Student
a year ago
Funded is very little info to say that. Deoends on the funding. And also, he's working for equity so as long as he's able to meet his needs, I don't think it makes sense to take more money out of the company. Plus he might also be putting a lot of his own expenses on the company.
Elix
Stealth
a year ago
VCs ensure founders aren't paid well till they teach Series D/E. Founder life wrt salary can be quite miserable. I started with a 90 % pay cut
See more comments
Good read and interesting perspective.But there are soo many founders out there who stop giving employees significant ESOP the moment they get to know that the equity might actually be worth something.Also founders do tend to make money too in subsequent rounds by selling part of their stake way before there are stock buybacks
And how many founders are actually building something because they really want to?
At the end of the day founders are also building to make significant wealth.
So it's only fair that employees also get into startups with a greedy mindset
Earning 60% of your employee salary is more than fair considering that the upside for founders is too much
RealGenZ
Stealth
a year ago
Thanks!
I don't think how you can stop giving ESOPs? For ex in our case we have already committed a fixed % in esops so allocating that doesn't Impact our stocks
And I 100% agree that founders getting less than employees in early stage is fair, not debating that - I was just pointing out the specifics of our case
human
Stealth
a year ago
This post feels like you are trying to justify stance for all founders because you took some founder bashing posts personally.
Everybody knows being a founder is hard and I don't think You are entitled, but there is a pretty good amount of entitled assholes out there being founders who actually just don't know the difference between a company and lala ki dukaan, just out there trying to take advantage of the less privileged.
Having said that, the things you mentioned about pay cuts and no liquidity and paying the employees more than you make are just part of the job description. It's what you signed up for. And if things work out for you, You are sitting on a goldmine.
Let me ask you one thing. Your investors fund you for a job well done or just a hearty try because building a business is hard? Do you give 100% hikes to employees who bring results or who just try hard because their jobs must be hard as well?
Please don't expect sympathy or awe from me for "Founders" just because they're giving it their all. Everybody is. If "Founders" take the responsibility to create a good workplace, they'll be held accountable when they fail.
P.S. 😅 this post got too hardcore, I don't have any personal grudge against founders. So... it's nice you said all those things ... 😂 don't take it personally
Megamind007
Stealth
a year ago
Those who rant about founders are less likely employable. I'm not surprised, if they cannot understand the system. All they can see is things affecting them personally. A**h****
RealGenZ
Stealth
a year ago
Thank You
victusd
Stealth
a year ago
Are you hiring interns ? I need a software dev or a backend dev internship and I can join immediately and start working.
RealGenZ
Stealth
a year ago
Hi, sorry - Not hiring anyone at the moment.
Kaddu
Stealth
a year ago
why don't you guys pay yourself better? who is stopping? why so much self inflicted pain?
RealGenZ
Stealth
a year ago
Noone is stopping but I don't really think it's fair to pay ourselves fancy salaries on investor money, just doesn't make too much sense to me.
