Got pulled into an interesting debate on LinkedIn - are early stage employees are stupid to accept lower salaries in exchange of 1-5% equity which is most probably worth ZERO. 1/n
I won't call it stupid, but irrational. Early employees often work just as hard as founders, but neither get high equity nor market salaries. 2/n
So why do they do it? The same reason why founders start their startups - they get no salary, put in their own hard earned cash, make personal sacrifices and risk their career. Sure, they get more equity, but given the abysmal success %, they know it's probably worth ZERO.
Here's the fact. Founders and early employees don't do it for money - but a chance to make an impact AND learn big in the process. Without this apparent "foolishness" we won't have an Apple or a Google today.
Being an early employee is not such a raw deal, if you join the right startup. You take high risk, but it also accelerates your career. Later stage employees only get 5-10% of the exposure that an early stage employee gets.
Finally, the timing of joining a startup may decide whether you are called a "founder" or an "early employee". But startups should keep assessing individual contributions and not be afraid to change titles/salaries/equities accordingly. We are committed to do this @CutshortHQ .
