I think it’s entirely reasonable for a founder to take money off the table.
The founder possibly walks away from a 6-7 figure opportunity cost working for a big corporate or FAANG. In return they take zero salary.
All of the money that begins to come in is then used to pay employees.
Maybe they raise some funds and pay themselves a below market salary for years.
A few years later they are over $1 million in opportunity cost and still owning a lottery ticket.
By this time they are a bit older, have a family, want to buy a house etc.
They are also massively wedded to the project for as long as it takes, so strapped in for the long haul.
The founder should be able de-risk at the next funding round and not continuing to roll it all for the benefit of VCs.
The same is probably true of early employees, but a lot of the factors above are dialled down. They didn’t work for zero, salary wasn’t under market by such a degree and they haven’t had such a high opportunity cost.
In what world 6-7 figures at FAANG is something a founder is actually "walking away" from?
First of all, it assumes everyone wants to work for those companies and assumes all founders could get such high paying jobs with a snap of the finger.
The founder possibly walks away from a 6-7 figure opportunity cost working for a big corporate or FAANG. In return they take zero salary.
All of the money that begins to come in is then used to pay employees.
Maybe they raise some funds and pay themselves a below market salary for years.
A few years later they are over $1 million in opportunity cost and still owning a lottery ticket.
By this time they are a bit older, have a family, want to buy a house etc.
They are also massively wedded to the project for as long as it takes, so strapped in for the long haul.
The founder should be able de-risk at the next funding round and not continuing to roll it all for the benefit of VCs.
The same is probably true of early employees, but a lot of the factors above are dialled down. They didn’t work for zero, salary wasn’t under market by such a degree and they haven’t had such a high opportunity cost.