by @asanwal in CB insights newsletter.

The idea that tech startup founders take a bunch of financial risk when starting up is on average pretty BS. It’s generally manufactured cuz it’s great for PR.

Let’s understand the risk.  

  1. Most are highly employable if their startup doesn’t work out
  2. The reality is that many are middle-class or better
  3. If they raise money, they’re taking a salary (even if modest) as well
  4. Many have families/spouses who bring insurance, paychecks, financial support, etc

This is not roughing it despite the stories they tell when trying to get press for their startup.

I’m not saying it’s easy, but this whole “we burned the ships. There was no turning back” narrative is kinda horse-isht.

If you dig into the background of founders who say this, more often than not, they’ve got a safety net.

Heck, a lot of them raise from friends & family so it’s clear their families have some discretionary dinero lying around. (BTW, I’m not talking about the 0.1% of people whose parents take a 2nd mortgage out to pay for their kid’s startup. That’s just dumb.)

Again, I’m not saying the startup life is easy or some folks don’t struggle significantly financially. I’m talking on average.

The problem with this “woe is me, I took all this risk” narrative besides it being false for the purposes of PR is it makes people think their success is due to them and doesn’t give credit to luck or other advantages. It’s tiresome and dangerous.

If you’re truly living hand-to-mouth, a tech startup is prob the last thing you build. You’d want a cash flow generating business. Not on-demand laundry.

BTW, tech startups are socioeconomically, a middle, upper-middle, and upper-class game. This should not come as a surprise to anyone.