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Silicon Valley’s Best Kept Secret: Founder Liquidity

stefantheard.com · 1,487 words · saved by 1 readers

Ask most venture-backed founders why they get 10x more equity than employee #1, 100x more equity than employee #5, and 1000x more equity than employee #15, and you'll get the same answer: "I'M TAKING SO MUCH RISK, IT'S SO HARD TO START A COMPANY, I MADE A BIG MOVE!!!" And then you'll ask, "but why are you yelling?” The narrative of the founder's risk is a cornerstone of Silicon Valley's mythology. Founders are celebrated for leaving stable jobs and pouring their lives into an “uncertain” and “high-risk” venture. This mythos justifies the enormous equity stakes founders hold compared to early employees who take very similar risks by joining an unproven startup. However, there's a lesser-known aspect of the startup ecosystem that significantly shifts the risk landscape: founder liquidity. Being a software engineer who has a strong preference for creativity, problem-solving, and autonomy I realized during college that very big and slow companies were not for me. I joined a startup straigh

Ask most venture-backed founders why they get 10x more equity than employee #1, 100x more equity than employee #5, and 1000x more equity than employee #15, and you'll get the same answer: "I'M TAKING SO MUCH RISK, IT'S SO HARD TO START A COMPANY, I MADE A BIG MOVE!!!" And then you'll ask, "but why are you yelling?” The narrative of the founder's risk is a cornerstone of Silicon Valley's mythology. Founders are celebrated for leaving stable jobs and pouring their lives into an “uncertain” and “high-risk” venture. This mythos justifies the enormous equity stakes founders hold compared to early e

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