I would have to agree. For all the belly-aching about Wall Street in NYC's tech community, you're guaranteed a significant income for a number of years.
For this equality to hold:
E(Wall Street hacker's earnings) == E(startup founder's earnings)
you need an extremely high payoff, since
E(startup founder's earnings) == P(startup success) * payoff of startup.
and we know the probability of success at a startup is low.
Everyone on HN needs to be honest with themselves: this kind of high payoff almost never happens, in aggregate. And I haven't even included a risk premium, which would make the required payoff higher!
If wealth capture is a main concern, you're better off building a nest egg at a hedge fund or large corporation for 10 years. If you want to start a startup, do it for the culture and technological freedom. From a statistical view, however, a startup is not the optimal way to become rich.
EDIT: mynegation reminded me of risk-adjusted returns. Thanks!
The risk adjusted returns of a venture-capital funded startup for a a founder with assets < 100k and non-entrepreneurial opportunities of > 100k is about negative 100-200k. In other words, you'd pay money to not be a venture-capital funded startup founder in that scenario.
For this equality to hold:
you need an extremely high payoff, since and we know the probability of success at a startup is low.Everyone on HN needs to be honest with themselves: this kind of high payoff almost never happens, in aggregate. And I haven't even included a risk premium, which would make the required payoff higher!
If wealth capture is a main concern, you're better off building a nest egg at a hedge fund or large corporation for 10 years. If you want to start a startup, do it for the culture and technological freedom. From a statistical view, however, a startup is not the optimal way to become rich.
EDIT: mynegation reminded me of risk-adjusted returns. Thanks!