It is nuts. I am hearing employees say they aren't going to pay their taxes anymore. They aren't going to pay their mortgages anymore. Having good credit doesn't help you anymore...
Really? I can't agree, but I lack the time to argue. Maybe a follow up post later this week. Until then - I table this post... :)
I agree completely. Any investor who knowingly funds a company with a CEO who can't live on the salary the company provides should be fired by his Limited Partners. Investors should NEVER hire a CEO at a rate below his personal burn rate - it is simply asking for trouble.
Of course it is a thought experiment, but worth some thought. It is a little too late for me to debate the subject tonight. With regard to 'paying companies' I was referring to 'paying companies' as described by Paul's post - i.e. he uses paying as equivalent to investing. All three paragraph posts MUST be over simplifications - you are arguing the wrong point. Cities like Dallas spend billions on stadiums and 'bridges to no where', but we rarely invest in entrepreneurs. That is the point of Paul's post - and my repost. The method and mechanism is certainly up for debate.
Collin County is relatively small with only has 696,383 residents generating $167,637,953 per year in revenue. Compared to Dallas with 2,366,511 residents generating $369,687,063 per year in revenue. The tech industry along 75 was mainly Nortel and the companies that supported Nortel. Nortel's reorganization is blowing away much of the county's tax base. I am VERY bullish on Dallas. Of course I am biased! :)
I don't know the whole story, but I do know Mitch Fox was recruited by the investors. They must have agreed to pay his rather larger salary - so I guess the investors got what they paid for. For all I know Mitch is highly qualified and worth $500,000, but as I suggested in a previous post - sometimes you are too qualified for your own startup...
Agreed. My point exactly. Check out the updated details in the post (Owen Thomas has the real scoop).
I guess that was my point... :)
I think you are missing my point. If your business needs four employees to fulfill a specific set of duties that are worth (in the open market) $50,000 per year each you should hire the appropriate people to fill the positions. Many entrepreneurs want an investor to fund their business at a level to replace the income the entrepreneur is able to earn in his or her profession. What if you can earn $100,000 per year as an engineer and your three other co-founders can do the same. If the four of you took jobs at your startup and expected to be paid $100,000 each the business would likely fail. It makes no sense for you and your partners to work at your company - instead keep your $100,000 jobs and hire the lower paid employees - eventually you will make money.
Good point. I guess I overstated their lack of experience. Readers, please note: all members have experience as 'passengers of automobiles'.
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Invention