A big factor in entrepreneurship that is undervalued is desperation. When you have a cushy tech job to fall back on, you simply won't try as hard as when you have no safety net. Right now it feels like it's okay to fail and you're only really risking the opportunity cost of a higher salary. "Forced entrepreneurs" risk great personal consequences because they have no other options. I'm not sure if this is a good or bad thing for society.
This isn’t really true and should not motivate us to value desperation. Survivorship bias prevents us from hearing the voices of those who chose the final solution to desperation.
I think the OP is just making an observation not a value statement consider his last bit is he doesn't know whether or not its a good thing. I also think this kinda doesn't follow because during down turns higher ups also commit suicide at much higher rates because they are likely to fall from much higher up. If you are already poor continuing to be poor while terrible isn't really a change in your perceived state
Yeah, I was trying to make more of an observation as opposed to a value judgement. I do think it's important to recognize the role of desperation because it's a powerful but negative motivator. It's really a mixed bag. Kind of like how are biggest scientific achievements have all been funded by the military in an attempt to more efficiently kill each other. I'm not sure what the balance should be.
I think we should ask which particular humans are desperate and which are curious.
Thousands of scientists and engineers would not have been motivated to work on ballistic rocketry and guidance systems if they had not been curious to learn about the moon and outer space.
Congress would never have spent 4% of the 1966 US federal budget on the Apollo program[1] if it had not been desperate to tell allies and enemies about our ability to land a payload in Leningrad.
It seems like the desperation is the more powerful motivator but carries significant side effects. I wonder if it's possible to motivate people in meaningful ways with only carrot and no stick.
NASA inspired millions of children in the 60s and 70s to go into science yet real progress in space technology seems to have only picked up recently. Similarly with nuclear technology, it took 12 years to get from nukes could exist to 15KT yields to 50MT yields but we still don't have fusion and fission reactor designs haven't changed that much in decades despite significant problems.
Sometimes I feel like people are change adverse and won't just change things to improve them. People only really change things when there's a significant threat of them getting worse. Reality is surely more complicated and nuanced but I think it will mark a significant change in our evolution when we improve things because we know they can be better instead of racing to avoid a disaster.
Or perhaps the person "burning the midnight oil" will come up with an innovation that will save even more lives, and which is only possible by a single person putting in the mental effort.
I don't have a strong opinion on this issue, IMO it's too complicated and subjective to feel confident in any particular stance. There's no question in my mind that entrepreneurs taking larger personal risks are more motivated to make things work, but whether that translates to a net positive or not? Who knows?
It can lead to chronic stress. Chronic stress can kill in the worst case. I think Elon Musk is a good public example of what (chronic) stress can do despite being financially successful.
It's definitely way more stressful but it's a balance. I think having too little stress can be just as unhealthy as too much stress. Some amount of stress is necessary to feel engaged and important in the activities you work on. You can work at a big company and feel completely unnecessary to the world. As a founder, finding the balance is extremely difficult but a very rewarding journey if you can sustain it. There's a certain zen about finding peace and focus in a chaotic situation.
> "Forced entrepreneurs" risk great personal consequences because they have no other options.
Anyone capable of starting a tech company has the skills and motivation required to get a reasonably well paying tech job.
And that's more or less what most of them do when their startups fail. I see a lot of resumes from people listing themselves as CEO or CTO of a tech startup that barely registers in a Google search.
I know at least one recruiter who makes a habit of calling up people at Crunchbase companies with <10 employees and letting them know to reach out if they're ever thinking about going back to the job market. Turns out, a lot of them are ready to go back to regular jobs after realizing that startup life isn't as glamorous as it sounds.
Back then when, lacking formal education in this field, I was unable to get anything better than unpaid traineeships. Since I needed income those were no viable option, plus I was demonstratively far beyond that skill level and felt I was being taken advantage of to an unfair degree.
If I wanted to stay in this field, my only option was to start my own business which I ended up doing. Things worked out quite well.
> Anyone capable of starting a tech company has the skills and motivation required to get a reasonably well paying tech job.
I find that way too simplistic and too blankety even for a blanket statement.
Not everyone works in tech. I know some "forced entrepreneurs" that failed big. They were "forced" in the sense that the country in which they were living was just not able to provide them a decent job.
They may have the skills, but not the attitude. I've met several entrepreneurs who simply can't work for someone else due to their own personality traits.
Very true. I dunno what OP is on about saying they’re interchangeable.
In a similar boat now after having had a taste of entrepreneurship but running out of runway. I used to be a model tech worker but now being back at a regular job just seems so... pointless, even though it pays well
Strategizing and executing at the business level is so much more fun than back and forth discussion about how to best fit something into a large existing codebase and making sure your PRs are small enough... but it’s hard to get employment doing that kind of work with a SW engineer’s resume
Yeah. It's probably way more mentally engaging - stress of getting product out and upcoming sales and the emotional rollercoaster of wins and losses. More importantly is the rate at which I met people and talked shop. Talked to customers, potential partners, talked to anyone who would listen really.
These days, sitting at the office listening to Katie go on about her weekend and Micheal go on about Apex legends or as you mention... but it's missing that weight or sense of purpose.
In my country though, putting former startup founder @ 28 years old makes you un-hireable.
In practice it's rare that someone simultaneously can't work for someone else yet can work for some combination of customers, investors, and employees. Running a business is rarely about working in isolation, taking orders from no one, and letting the money roll in.
Many of them can work for someone else, but it would be incredibly difficult. Imagine being founding engineer at a small startup that fails, then joining a large company and having to deal with tons of bureaucracy, slow processes, and red tape. Sure, you can "do" it. You can do the work. You can follow the processes. The money is nice. But it's frustrating.
Have you been both an entrepreneur and an employee (after having been an entrepreneur)? I have. I'm pretty sure the skillsets for each are completely different.
Absolutely. I was a well paid manager in a travel company. Then Covid hit... In hindsight I am glad I got the chance to become an entrepreneur. I am not sure if I would have had the guts to make the jump without the f:ing pandemic.
I was a reasonably paid developer / manager in 2008 and couldn’t find a job as hiring was frozen. Unemployment wasn’t going to cover the mortgage so I was in a sense forced into entrepreneurship despite being a previously attractive hire for multiple companies.
I had to work 2x as hard to make the same salary on my own the first year, but after that the rewards became easier as the company grew.
I doubt I would have had the courage or interest in leaving a comfortable salaried position for entrepreneurship if I wasn’t forced into it. Turned out to be a life changing lay off for me though in a good way.
The issue is that GP points to this as a significant factor:
> "Forced entrepreneurs" risk great personal consequences because they have no other options.
This is just ground reality for many entrepreneurs (immigrant families opening new restaurants, for example) and does not serve as much of a differentiating factor. Based on the study in the OP, the differentiating factor is more likely to be some difference in risk tolerance by way of savings (since these were high earners after all), some difference in skill (since these were high earners after all), or some difference in opinion of self (since these were high earners after all) which kept them from giving up and just taking a minimum wage unskilled labor gig somewhere.
It's not interesting that people turned to entrepreneurship after being laid off. It's interesting that people who were laid off from cushier jobs were able to start businesses more successfully.
I think the term "forced" implies to me that the other options were worse at least. High earners can become low earners very quickly like real estate agents in 2008. These people have a larger bank roll and wider network then suddenly find themselves without a way to sustain their existing lifestyle. Similarly, the dot com bust gave many previously high paid programmers a lot of free time and few options to maintain their income.
A lot lot lot of start up founders have some type of exit (life changing but not retiring type money) then go work as an engineer at FANG+. It's always interesting talking to them because most of the time they thought about leaving during their time running the start up but stuck around for one reason or another. Sometimes because they didnt have time to interview elsewhere.
As a bootstrapped founder who went through such an exit, but not planning on going back to a big tech company, I had temptations of going back for at least a couple years. My primary motivation was the fear of suffering personal consequences for completely running of our money. Now that I've exited and have plenty of time to start the next thing, I can't ever see myself going back to a big company. There's something addicting about entrepreneurship.
To me, it just feels so much more real than working at a big company. At a big company, I felt like I just tried to make my boss happy and I had a very limited toolset to do such. As an entrepreneur, it's very connected to delivering value to other people who won't give you the time of day if you don't. It's difficult to explain but it feels way more real than a job.
Amen. Plus the high of getting a new sale or getting good direct feedback from your customers
Also love how customers don’t give a ** about who you are, just how good your product is. Very different from typical employment where there’s a constant undercurrent of posturing and your person/personality is always front and center to your performance, as much as people don’t wanna admit it
As somewhat of a forced entrepreneur myself, I disagree. Didn't finish high-school and have never held down a job for more than a few months, but don't feel at risk of 'great personal consequences'. If the market changes and my current ventures go to shit, I will just develop a new product much like an employed person would find a new job.
I think the difference is the paper focuses on previously high income earners. When people earn a high income, they tend to get mortgages, dependencies, and expensive habits. When you have all of that, it's tough to take it away without it feeling like a great loss.
When Covid hit, I quit my cushy job to create a video game. It was awesome, and given the time and resources I am confident it would have sold a few thousand copies.
But c'mon, I quit my job to get away from working for a living for a year. I put in 4-6 hours a day in earnest, but it was pretty obvious from the beginning that I wasn't gonna finish and coding the game was just an opportunity to be more creative than I am as a manager.
No way would I have ever entertained this idea without knowing I could walk back in to a high-paid job a month after starting to look, which I did.
If you’re a desperate entrepreneur in B2B, just a heads up that there are a lot of predators out there trying to cheat you into cheap/free work. It’s like a special kind of land shark that can smell your desperation.
The willingness to walk away is a game changer in sales (and other things in life).
That's why FED should stop the money printing press and let the chips fall where they may.
I've been for a long time waiting for that crisis to pop up and I go back to my community to try something new, not as an employee but as an employer.
Many other software devs shared common concerns with me, like that it isn't worth to drop the ball now that salaries are sky high.
I think a recession would definitely annoy people, but like when it rains, it would clean up a lot of things. Too many zombie companies going on, big tech getting so much money as it seems the only thing that will stick around post-crisis.
We need to shed the tears before there is progress. Can't keep holding this thing on forever.
> I think a recession would definitely annoy people, but like when it rains, it would clean up a lot of things. Too many zombie companies going on, big tech getting so much money as it seems the only thing that will stick around post-crisis.
Poverty can only be really fixed by tackling poverty. In a country where discussing universal healthcare and basic needs coverage is a considered extreme leftist ideas. I am not impressed that people are worried about recession and the life of the poor.
Sure, in a recession, Elon Musk might get poorer, but it isn't the same kind of poverty that affects the poor.
If US wants to tackle it properly, first solve the initial issues. It is possible to have a recession where poor people aren't the ones most affected, it's all a matter of approving policies, laws and really looking after the poor.
A recession where some rich people that took more risk than they should and get punished isn't bad. What is bad is workers depending so much on their employers to survive. Well, in the US that would get tagged as communism.
This is a poor characterization of the issues in the US.
(a) We have universal healthcare for those without income: Medicaid.
(b) We have universal healthcare for those over 65: Medicare.
(c) Discussing healthcare reform is not considered "far left," there is significant debate about how to do this and how to pay for it across the spectrum. So far relatively left politicians have gotten the most airtime about this, but it is discussed broadly.
Your note reads as snarky and condescending, and then you signed it "Best regards from Germany," which just confirms this is a drive-by European comment.
When it comes to countries that aren't your own, my recommendation would be to ask questions and seek to understand rather than to casually cast judgment.
As a final note, please consider that the US is not analogous to Germany. California is analogous to Germany. The US is analogous to the EU. From my reading of international news, it appears that it's more difficult to work out things at the EU-level than it is at the level of an individual nation. That's useful to keep in mind when attempting to make comparisons between the two regions.
> (a) We have universal healthcare for those without income: Medicaid.
> (b) We have universal healthcare for those over 65: Medicare.
In varying ways, both of these programs have large gaps and do not achieve "universal" coverage for the groups they claim to be for.
For instance, when it comes to Medicaid, there is a lack of actual, physical access to care facilities for those without transportation options or a lack of ability to take sick time at work. Many rural areas have severe doctor shortages. There are many others.
> (c) Discussing healthcare reform is not considered "far left," there is significant debate about how to do this and how to pay for it across the spectrum. So far relatively left politicians have gotten the most airtime about this, but it is discussed broadly.
US pays more than most European countries do for healthcare on almost any comparable measure, per-capita, adjusted for life expectancy / outcomes, and many others. Switching to a multi-payer system with basically a variant of a public option, ironically similar to what Germany and a few other European countries have, seems like a pragmatic short-term choice. Unfortunately this isn't a popular solution on either side of the aisle.
> please consider that the US is not analogous to Germany. California is analogous to Germany.
That statement is not true at all.
I give you that California has about half of Germanys population, but it is not a country. California is a State. Germany is a country and the membership in a political union like the EU does not make it a state.
The population is not a match, but States in the US are by design far more autonomous than "provinces" in other countries. When the original 13 states formed the US they thought of it much in the same terms that member states of the EU think of themselves today - not an identical arrangement, but very similar in spirit.
California (and the other US States) have their own labor laws, their own environmental standards, their own transportation and energy departments, their own distinct safety net programs, even their own militaries! (aka the "national" guard)!
Further, the Federal Government is specifically limited via the 10th Amendment to only those powers which are enumerated to it. By default, legal power is held by the states, not the federal government. This is very unusual.
Every "country" has a different mix of systems and different degrees of local autonomy, but US States are at the very high end of local authority while the federal government is at the low end. Thus, comparing some European nation to the US Federal Government is often misleading as it implies that the US federal government even has the power to do things that a European nation can do, which is frequently not the case, or else is greatly complicated by needing state participation and approval.
Germany is a Federal Republic and so is the USA. Germany has states as well.
I grant you that they are different forms of federal republic, but the point that California is not a country stays the same.
I don't care what kind of power the federal government of the United States has or doesn't have. That is a problem for the US to figure out for themselves.
I don't think that when people compare European nations to the US that they are speaking about the US federal government specifically or imply anything about the power of the US federal government. What is more likely is that they are asking why the people of the USA have not archived what people of other countries take for granted. The fact that this would have to be archived via state or federal government is a detail at best.
If you want to enact political change then the legal structure of the government is most definitely not a “detail at best.” Consider gun rights, for example. Due to the Second Amendment, every level of the US government is greatly limited in its ability to enact gun control. To change this requires not a mere majority vote in congress, nor even a supermajority in the senate, but a constitutional amendment which much clear both houses of congress AND be ratified by 3/4 of the states!
These details matter, and they are important specifically when talking about public policy matters and trying to advocate for change.
Back to my original point, there is nothing stopping any US state from adopting universal healthcare, but it’s not clear if the federal government even could if it wanted to (see Medicare expansion and how many states have chosen not to opt in!). Thus if you want to make comparisons to the “things that Europeans take for granted,” it is often more productive to look at what individual US states do and can do, rather than obsess over the federal government. Trivializing that is just a road to getting nothing done.
From his argumentation it is clear that he lacks geography knowledge at all. Beginning with this, it is hard to discuss.
Geography isn't even consistently taught in the US. Americans don't seem to care about it, they are busy eating their donuts and sipping their mountain dews, despite having a huge GDP and $ per capita... a declining age expectancy that matches third world countries.
That "universal healthcare" existing in the US doesn't work and for many Americans that rely upon it is hell. The whole system is extremely inefficient and expensive. Go read on that and you'll see it is a concept so wrong that even third world countries have better health care than the US.
No, the US isn't analogous to the EU. You don't live in the only federalist country in the world.
Your comment can only make me believe you have had a horrible geography education, my only advice is to try to fix it. Learn about the political systems that exist in the world, the countries, their GDPs and peculiarities about their land. Otherwise it is pointless to discuss.
> (a) We have universal healthcare for those without income: Medicaid.
There are tens of millions of people who are eligible for Medicaid under the ACA, but they live in states that never expanded Medicaid under the ACA so they can't sign up for it.
Also, if someone makes more than $12k to $17k a year as an individual in a state that expanded Medicaid, they're no longer eligible for Medicaid.
Yes, which is why I only claimed that we do have care for people without income. re: states not opting in, I couldn’t agree more, hence my emphasis on State-level action being more important than federal when discussing US domestic policies.
Germany...a country with one of the highest levels of wealth inequality in the world (roughly equal to the US). With median net household wealth below Greece, and one of the highest proportion of billionaires in the world. Endemic corporate corruption, low competition, non-existent regulation, weak unions...people in glass houses.
Also, the US has one of the largest public healthcare systems in the world. Comparisons are slightly complicated but, as a % of GDP, it is roughly the same size as Germany (on a tax base a fraction of the size). The only nation in Europe that actually has a larger public health sector than the US is Sweden.
Work is the only way to lift people out of poverty. Germany is a self-evident example of this: the economy revolves around large corporations who are heavily protected by competition from govt. I would bet on the competitive American model that can renew itself every time over the corporatist model that protects wealthy industrialists in exchange for meagre handouts to the poors. The US tax system is a great example of the potential of redistribution (particularly, property taxes...an area of notable weakness in Germany).
Google for the IMF and Germany inequality. They have written several reports on this because German inequality is the main source of financial stability globally (in addition to the Netherlands, this was China a few years ago but China has modified their position).
IMF has a very american centric view and if you understand what it has been doing to the world, mainly third world countries, you would really question all its authority on anything.
Come to Germany and see if it is really unequal with your eyes. :-)
> I've been for a long time waiting for that crisis to pop up and I go back to my community to try something new, not as an employee but as an employer.
If anything, the current environment makes it more attractive to start a company, not less. Investment money is cheap and plentiful. Businesses and customers have plenty of money to spend on your products. Risk tolerance is high, so customers are less afraid to take a chance on your unproven business.
And if all else fails, you can walk right back into a hot job market and pick up where you left off.
All of those traits are reversed in an economic crisis. The idea that a crisis spurs people to take entrepreneurial risk or fosters entrepreneurial success is backwards. Now is just about the optimal time to start a software business, if there ever was one.
Yuuup. Nothing like being homeless, hungry, and broke to focus the mind into "hunger," unlike Ivy Leaguers' dabbling into staplers as a service or Juicero.
It's a few years since I've been in academia, but is it normal these days for papers to receive five years of updates? Or to be five years old and still "forthcoming"?
I don't know what happened in this particular case, but it's fairly common for articles in higher ranked business journals to spend several years in the working draft -> revision -> acceptance pipeline.
Unless you work for a great company as a software engineer, you can make/keep significantly more money as your own company.
The past few years have punished W-2 wages even more when compared to non-W-2 earners or people who partial incomes from W-2.
PPP Loans, SEP-IRAs, QBI deduction, plus plenty of other random deductions as well that are no where near the sketchy deductions that certain people take such as hair/makeup.
Like many things, this doesn't apply only to software engineers but any job that you can easily contract out or do plenty of remote work.
The current US tax structure encourages entrepreneurship. At the same time it seems to make it slightly scary/challenging with tons of ridiculous paper work, especially if you move across state lines. Oh & paying taxes is a pain. If someone wanted a huge unicorn type business idea, making it super easy to handle all this garbage would be nice. Most places are either to expensive for a single or tiny business, or don't offer enough help. Huge opportunity with an expanding niche & no one is doing it really well.
Be careful with this advice since it does not apply generally or all the time for most people. Being self-employed can have a significant financial upside, but it also has significant costs and risks. I switched to 1099 work several years ago and in comparison to what I could be bringing home in total compensation with a big tech company, I make anywhere from 0.75 to 1.5 times as much. The situation is similar for friends who made the same switch - some years it's substantially better, some years it's worse, on average you trade different kinds of stress for a little bit more money.
It's important to keep in mind that running a business, even one where you're the only employee, is a pain in the ass in America (and especially in California). In addition to all the compensation things you don't get through an employer (health insurance, 401k matching, subsidized meals, paid vacation days, etc.) you also have added overhead in self employment tax, professional insurance, compliance/service fees, etc. And then you have the added headache of a small mountain of paperwork, both to get started and at tax time every year, in addition to having to keep your accounting straight and sometimes having to chase down payments. Also keep in mind that the line items you listed have caveats. QBI phases out at certain income levels and for certain professions (I get $0 from it), PPP is a one-time deal, IRAs are not equivalent to getting free matching money from an employer 401k, etc.
As others in here have mentioned, you also have to maintain your client pipeline and even then there's no guarantee things will work out. For example, last year when the pandemic started my primary client paid the early termination fee, cut my contract 4 months short, and left me to twiddle my thumbs while my W2 friends happily plugged away at their normal jobs with no income interruption. That's the kind of risk you take and over time it absolutely will impact your total earnings. In general, self-employment is most definitely not for everyone - I usually only recommend it for a limited subset of people.
Having now started / run 3 different small businesses in the US in 3 different states, I would say the paperwork and tax compliance is the second biggest headache of doing business here. Sales tax is especially annoying. But the #1 biggest headache is providing healthcare (not mandatory for small businesses, but you need it if you want to be able to hire anyone).
I would love to see significant reform to simplify taxation for small businesses, but more than that I would love for the US to have a simple, high quality universal healthcare program so that I didn't need to worry about healthcare provision as part of my company.
> Unless you work for a great company as a software engineer, you can make/keep significantly more money as your own company.
This comes at the expense of time and energy. Running a "company" will involve a lot of other things beyond software engineering. Like stocks, there's also no guarantee you will beat the market (the market being the best salary you can get).
The most time and energy efficient way to make money with little risk is still to take a standard software engineering job, don't take on unnecessary responsibilities, and just work remote to eliminate commute (you don't get paid for commute time but because you still have to do it you have to account for it as part of your work hours, which can vastly reduce your true hourly rate).
If you have one or two solid long term clients, the running a company is minimal once you're setup. You pay yourself a salary, do a few quarterly state tax items & a monthly payment to the IRS.
It's usually the initial setup that is the biggest pain & if you ever make any changes like wanting to move states or addresses. This is where I think a service would be really beneficial. At the same time, the amount of time/revenue lost to this is less than the amount gained by tax benefits. I mean every company made 5 months of salary plus benefits per employee from the PPP loan over the past 2 years. That alone was huge.
From personal experience, it sounds like "the best salary you can get" requires hunting for decent opportunities, studying for tons of ridiculous interview questions, networking with employees at the company to get a leg up & of course taking a ton of interviews. Plenty of time/energy goes into that as well. Of course you can counter argue that getting clients takes plenty of time energy. So it maybe comes down to each person's own unique situation and which opportunity is best for them. I've found that doing great work, gets your name out there & marketing is not required. Learning to say "no" to jobs tends to be required more than marketing.
Don't forget health insurance and errors & omissions insurance.
Finding clients takes about the same effort as preparing for job interviews except you have to constantly be looking for clients.
It's not easy finding and managing multiple long term clients, and even then you need about 3 or 4 to ensure one doesn't hold too much leverage over you.
In the end, it's a wash, if starting a company was two or three times better than a salaried job it might be worth it, but as it stands it's barely 1.2x better than a salaried job.
If you want more money it's best to just do a salaried full time job and then do some work occasionally on the side or develop other passive income streams.
> If you have one or two solid long term clients, the running a company is minimal once you're setup.
In many countries, big consultancies lobby governments to treat such business as disguised employment. Here in the UK from this year, you may likely be caught by these new rules and have to pay employer and employee tax on the entire revenue - which essentially means you pay more tax than an employee, you don't have any employment rights and you still have business running costs that you cannot claim any tax relief from.
Sure but, anecdotally, the only people I know who have "beat the market" are either healthcare professionals or small business owners. The successful entrepreneur has a much, much higher ceiling than almost every other occupation. Sure, a cushy software job will be reliable and probably be very lucrative but those do have an eventual cap that doesn't exist when self-employed.
This report seems to reinforce a notion that I've had for quite some time: The latest tech entrepreneur hype cycle is churning out very enthusiastic, hopeful/jr. entrepreneurs who have nearly nothing to offer in terms of vision, product, service, technical ability, etc.
Being an "entrepreneur" is a means to and end, not and end in and of itself.
> firms founded by forced entrepreneurs are more likely to survive, innovate, and receive venture-backing
Actually this result surprises me.
The survivorship bias I was expecting was that upper middle class and upper class people got opportunities to try ideas over and over again because their funding never ran dry. And therefore we get to hear misleading stories about entrepreneurs starting from their garage, but turns out the garage was at a home in Atherton, the most expensive zip code deep in Silicon Valley.
It's interesting that "venture backing" is considered as something normal, a success even. Being approved by your rich overlords.
Workers have to pay huge tax, whereas corporations don't. So workers are less able to amass capital and because of that they are forced to share their business with VC.
If you were a rich VC owner, surely you would lobby politicians to ensure entrepreneurs are dependent on you.
I think this is sickening. Corporate feudalism?
This is a pretty zero-sum way to look at VC/investment/startups. In reality, GPs have to hustle to get LPs to invest in their fund. Then, they're able to take that money and create a portfolio out of it by investing in big opportunities. They really only want to invest in businesses that can exceed a $1B valuation (sometimes $10B these days). The very best VCs have a track record of identifying $1B+ opportunities and helping those companies get there.
As a founder, if your business doesn't fit that mold you probably shouldn't raise from VCs. There are angels out there with a higher risk tolerance who write fewer checks and are more interested in contributing directly to a company's success outside of capital.
The idea that workers are diluted by the VCs is usually bogus. In an upside scenario, everyone wins. In a neutral exit scenario, the employees get to keep their wages, the investors get their money paid out first (if there's any left) and the founders/employees get hosed. In a downside scenario, everyone loses, except employees still get to keep their wages earned.
It seems like you're conflating wage workers vs VC vs founder. Each of these roles has a wildly different risk profile when it comes to a startup.
vc's job: find and invest in companies that will make large amounts of money. if they are good at their jobs, these companies will make them large amounts of money and in so doing employ a large pool of workers.
if what I just wrote is true, then I can see how others might use vc-backed companies as a proxy for broad economic gains
Some people view any trade where the other side wins to any degree as exploitative. Regardless of whether they gain themselves. It is an interesting thought pattern.
These days you are unable to climb the class ladder as an employee. Any income that you could have saved is being eaten by progressive tax (that is being used to subsidise low wages among other things - big corporations avoid paying tax and pay low wages that other workers have to bump out of their pay).
Only way to escape working class and poverty is starting a business.
This also is becoming more difficult as big corporation lobby for more regulation and for increase of barriers to entry for new players.
Big corporations need smart people as wage slaves, not as competitors.
This is something that is not being looked enough into, mainly because politicians have no incentive to do it.
It is easier for them to accept donations from rich friends and source votes by promising more social programs and more subsidies for target voter salaries.
Anecdotally, what happened to the entrepreneurs in your networks when this thing hit? In my network, most of them seem to have used the skilled remote work boom to get regular jobs until this has all passed.
