> Employees that are paid common stock didn't put any money.
> It is like playing a lottery, but only with opportunity cost.
So, they did put in money. It's "opportunity cost" money as opposed to literal cash, but logically it's still value being invested in the company (the company has $X more in the bank because the employee was willing to take a $X pay cut).
Compared to VCs, engineers are making a lot more of an investment in terms of % of their potential value for a less favorable return.
I think VCs get better terms because A) they control an amount of capital that's rarer and have more leverage, B) they do this professionally and are better at negotiating things. But probably mostly A?
> It is like playing a lottery, but only with opportunity cost.
So, they did put in money. It's "opportunity cost" money as opposed to literal cash, but logically it's still value being invested in the company (the company has $X more in the bank because the employee was willing to take a $X pay cut).
Compared to VCs, engineers are making a lot more of an investment in terms of % of their potential value for a less favorable return.
I think VCs get better terms because A) they control an amount of capital that's rarer and have more leverage, B) they do this professionally and are better at negotiating things. But probably mostly A?