I’m not sure I understand. Being laid off is absolutely a downside to flopping, and “unfortunate” is, in my mind, fairly synonymous with “downside”, I’m not understanding your objection.

Nor do I understand how owing money back to an employer is a realistic scenario. I’ve never heard of that happening. Maybe it happens in weird indie or friend group startups for various reasons. Are you suggesting this happens with any real frequency to employees at established companies?

No but that’s the difference between being an employee and being an entrepreneur.

I’m totally getting the feeling you have an interesting story to share, perhaps about a startup exploding in the bad way? I’ll stick around if so! I’ve had one myself that was a roller coaster, but at least didn’t end with people owing personal money.