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Ask HN: Would you start a startup if the upside was limited?

9 points by adamzerner ↗ HN
I heard that Switzerland is voting to implement a system where CEO's could only make 12x that of the company's lowest paid employee. They would also be implementing a system where every citizen is guaranteed roughly $22k/year, regardless of employment (I might not have all the facts correct).

Regardless, my question is if you were capped at $500k/year knowing that you would have this $22k/year safety net, would you still start a startup?

EDIT: I'm trying to ask whether a moderate upside - that is roughly equivalent to making $500k/year - would be enough to motivate most people to start startups. The Switzerland thing was just what got me thinking. DH5 people!

16 comments

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jackgolding
Just run a couple of them, its not hard right?
gexla
Start-up founders don't get rich from salary, they get rich from owning the company (shares.)

Here is a list of people who have employed themselves for one dollar.

http://en.wikipedia.org/wiki/One-dollar_salary

I'm guessing that people like Warren Buffet and Mark Zuckerberg spend surprisingly little money for their day to day living expenses. You don't see these guys driving around super cars, sporting a lot of bling, rolling with an entourage and building the largest mansions they can afford.

adamzerner
I'm trying to ask something along the lines of "if the upside was capped at $500k/year". So you could consider that equity, salary, perks etc.

I'm trying to ask whether or not that type of moderate upside would be enough for most people to start startups.

zsstor
Exactly. Given this system, there might actually be more incentive to create startups, as earning potential from a traditional job is limited.
adamzerner
Really? How many traditional jobs make over $500k/year?
lacker
It seems like once you have a lot of money locked up in equity you'll be able to evade this salary limit by recategorizing your income as investment earnings or some such. So, in practice I doubt this law will be effective.
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moox
To me a startup isn't about the money, but introducing my idea to the world. The idea of satisfying a need is enough.

That being said, the money is still a great incentive since you're taking a huge financial and personal risk, but you can still live pretty damn well with $500k/year.

cprncus
Oh, if I have to, OK. [pouts while a billion people hope for clean water tomorrow]
PeterisP
Switzerland isn't planning to limit 'upside' in any way, as simply owning [part of] a rapidly growing company is something completely different from compensation like getting stock options that you didn't have before.

The 'cap', in essence, would refer only to hired managers.

adamzerner
The Switzerland example was just what got me thinking, not the focus of the question.

I was thinking about redistribution of wealth. There's all these founders making billions of dollars. What if instead they only made a couple million, and we gave the rest of it to poor people? Would they still have started their startups?

PeterisP
The founders probably would have started them anyway if other things would be the same - but they wouldn't be the same.

In particular, the whole concept of venture capital wouldn't work, so lack of funding would've prevened the start of most current startups as it happened.

accomplice
Absolutely!

If it means helping to define and grow the culture I can do my best work in. To work with people I admire and trust(and may even be around for the next thing).. that's better than most jobs anywhere and incentive enough to be honest. It just so happens I also love designing great products, but designing great places to work can be just as fulfilling.

OafTobark
Doesn't affect me. I don't do what I do purely because of money and $500k/yr is still quite a cap relative to any job I would want to do. Even at a fraction of that, I still would rather work on something I care about. The only exception is if I care about the job I would be working.