> You're saying you don't think so which obviously means it's a "worse" deal for investors.
I did not say that. Experience is worth a lot, I suspect [1]. What I said was that needing a higher salary makes it a worse deal than not needing it. I think that was pretty clear. In fact, the next set of words after that snippet you quoted was:
> ; like you said, there are people your age (and presumably experience level) with war chests or breadwinning spouses
I was submitting that the choice between a 20-something with low salary requirements and an experienced hand with high salary requirements is a false one; i.e. the replacement ramen candidate may have equal experience. Lots of people are older and don't need salaries, and that's who you're competing with for limited investor resources. I know plenty of those people; it sounds like you do too. There's no law that says older people have to make more money.
And there's a very good reason why an experienced entrepreneur who can afford it should take less salary; their company is more likely to succeed because those leftover resources can be applied to the company. It even shows up in the data! So that certainly explains a bias against salary needs.
> what's happening is that they are being required to take on even more opportunity cost.
A separate point, but no investor cares how much opportunity cost you're taking on because it doesn't make the deal any better. There's no fairness rule at play here. Having a higher salary at your current job may improve your bargaining position [2] for a deal the investor already wants to pursue, but a) giving yourself a better bargaining position does mean the deal is worse for the investor, and b) it sounds like you're complaining that it doesn't improve your bargaining position, which sounds...good for the investor, no?
Best to stop think of your salary needs as some justified thing that flows naturally from your position of experience and should be somehow baked into the entrepreneurship process as a given, and start thinking of it as a exogenous negative you have to overcome with that experience and wisdom, not mention skill and hard work. Otherwise you end mispositioning your arguments like that.
[1] But don't know. I will say it's not some crazily hard calculation; for example, the analysis that came up with "The lower the CEO salary, the more likely it is to succeed." could simply adjust for prior experience (i.e Is this negative correlation because of stupidly overpaid 23-year-olds or are people being paid according to their demands and that isn't working out? Or maybe experience doesn't matter at all?). Then we'd know. So in a sense I agree that's an important question for investors to figure out ("How do I weigh the negatives of salary versus the positives of experience?"), just not the one I was addressing.
I did not say that. Experience is worth a lot, I suspect [1]. What I said was that needing a higher salary makes it a worse deal than not needing it. I think that was pretty clear. In fact, the next set of words after that snippet you quoted was:
> ; like you said, there are people your age (and presumably experience level) with war chests or breadwinning spouses
I was submitting that the choice between a 20-something with low salary requirements and an experienced hand with high salary requirements is a false one; i.e. the replacement ramen candidate may have equal experience. Lots of people are older and don't need salaries, and that's who you're competing with for limited investor resources. I know plenty of those people; it sounds like you do too. There's no law that says older people have to make more money.
And there's a very good reason why an experienced entrepreneur who can afford it should take less salary; their company is more likely to succeed because those leftover resources can be applied to the company. It even shows up in the data! So that certainly explains a bias against salary needs.
> what's happening is that they are being required to take on even more opportunity cost.
A separate point, but no investor cares how much opportunity cost you're taking on because it doesn't make the deal any better. There's no fairness rule at play here. Having a higher salary at your current job may improve your bargaining position [2] for a deal the investor already wants to pursue, but a) giving yourself a better bargaining position does mean the deal is worse for the investor, and b) it sounds like you're complaining that it doesn't improve your bargaining position, which sounds...good for the investor, no?
Best to stop think of your salary needs as some justified thing that flows naturally from your position of experience and should be somehow baked into the entrepreneurship process as a given, and start thinking of it as a exogenous negative you have to overcome with that experience and wisdom, not mention skill and hard work. Otherwise you end mispositioning your arguments like that.
[1] But don't know. I will say it's not some crazily hard calculation; for example, the analysis that came up with "The lower the CEO salary, the more likely it is to succeed." could simply adjust for prior experience (i.e Is this negative correlation because of stupidly overpaid 23-year-olds or are people being paid according to their demands and that isn't working out? Or maybe experience doesn't matter at all?). Then we'd know. So in a sense I agree that's an important question for investors to figure out ("How do I weigh the negatives of salary versus the positives of experience?"), just not the one I was addressing.
[2] http://en.wikipedia.org/wiki/Best_alternative_to_a_negotiate...