Dan Luu 6/7/2017

Startup options v. cash

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This article critically examines the claim that startup compensation packages have a higher expected value than those at large tech firms. The author argues that if startup options were truly as valuable as claimed, startups could sell them to investors and pay employees in cash. It challenges the common risk-reward narrative, explaining how VCs can diversify risk while employees cannot, and explores cynical and non-cynical reasons why startups prefer paying with equity.

Startup options v. cash

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