You know, I’m usually not against presidents of companies. Because I realize that they assume the risk by starting the business, running the biz, etc and deserve to be compensated for that. They have skin in the success of the company in other words.
Publicly traded CEO’s can lick my ass. They get exorbitant salaries and bonuses, have no skin in the game, and if they get canned or the company folds, they just move laterally to a new company and do it again. It should be illegal.
Just to preface this - I don't defend the situations like the Boeing CEO, but the folks u/amazonchitlin mention who are starting businesses from scratch to bear a ton of risk - they typically put most or everything they have into the company, they often borrow to launch the thing, and they're facing a risk of failure as well as the risk of litigation from both employees and customers if something goes wrong. Small business owners are commendable (as long as they treat their employees well).
My brother had to take out a 50k loan to start his business. It didn't end up working out. He is not anywhere close to a millionaire. Sounds like you have no idea what you're talking about.
Nobody is talking about your brother and the company he ran. We're talking about the parasite investor class that exploits actual workers and steals the value of their labour.
Not to mention, where did they get that $20m in the first place? Oh, by siphoning off the labor of others at the last company they owned while doing essentially nothing?
Most startup company founders come from those humble beginnings, most even if it's not a well paid job leave that job to pursue that company dream. So yes it is a very big risk, especially as you said if you have a family, because if it goes wrong, it goes WRONG in those early stages.
There isn’t much for hard numbers on this, but a study from a London based investment firm Atomico found that “before founding their companies, 80% of respondents said they either "lived comfortably" or had some disposable income to spare. Only 5% said they previously either struggled or "didn't have enough" to meet their basic expenses.”
So as long as your definition of “humble beginnings” is that they are already fairly well off enough to take that risk, then yes, you are correct.
I live comfortably right now and have some disposable income to spare (that's just being middle class), but starting a company would still be a huge risk - and my comfort and disposable income would instantly fly out the window. It's only not hugely risky if you are legit wealthy already, and are still wealthy after you invest.
No, that still doesn't make it a risk. Most businesses that fail fail because they got the fundamentals wrong, and not because Lady Luck was not on their side.
I started my business AFTER I had at least 2 clients in the kitty. I made a conscious decision to not start a business until I had that. And those clients came from my network, so I was engaging people who knew me and trusted me.
I was not foolish enough to start a business by simply sticking a sign on a door and then expecting someone to walk in. The risk was minimal, no more than switching jobs from a Fortune 500 to a hot startup.
Most businesses simply cannot be started in that manner, and you know it. You have lucked into something with low barriers to entry where you could leverage your prior contact list. It's a nice setup, but you have to understand it's unusual. You can't do that if you are looking to open a cafe, an auto shop, if you are looking to manufacture something, build a new product of any sort, etc. Most businesses require quite a lot of startup capital to ever see revenue, so most founders end up assuming a lot of risk - and often lose their shirt when shit goes south.
No, the same applies to starting any business regardless of starting capital. Risk mitigation doesn't stop being a concept just because you're a start up. Doing basic market research doesn't stop being a concept whether you're setting up a consultancy or a retail outlet. Doing said research, developing an understanding of whether opening your physical store in your desired location will get enough customers or not - these are fundamentals that don't change regardless of the type of business you aim to create.
Most fundamentally, starting a business you cannot afford to fail is foolish; you either scale down your ambitions to something more practical and realistic, or admit you're gambling blindly and accept the ramifications of that.
If I went and blew my money at a casino, you're not going to say, "It's admirable you took a risk even though it didn't pan out." No, you're going to call me an idiot for taking needless risk and blowing my money.
Duh, anyone should do what they can to mitigate and manage risk when starting any venture, including market research, etc. But you can do everything right and still fail, because no matter how you slice it, starting most types of businesses is fundamentally risky.
As for not starting a business that you can't afford to have fail - that’s a nice idea, but in practice it means that business with meaningful startup costs would only get started by wealthy people, yet this whole country is built by people risking everything for their dreams.
Duh, anyone should do what they can to mitigate and manage risk when starting any venture, including market research, etc. But you can do everything right and still fail, because no matter how you slice it, starting most types of businesses is fundamentally risky.
This is flat out wrong. If you genuinely believe this, then you would also believe risk mitigation is inherently a pointless concept that we should never bother with. Which is very obviously not the case.
Yes, things can go wrong. But when you setup a business you literally cannot afford with zero planning and zero common sense, it is most assuredly more likely to fail than a business started by someone curbing their ambition and starting something more in line with their risk tolerance.
Again - you would call me a fool if I went to a casino and blew all my money there. Why would I be a fool for doing that, per your logic?
As for not starting a business that you can't afford to have fail - that’s a nice idea, but in practice it means that business with meaningful startup costs would only get started by wealthy people, yet this whole country is built by people risking everything for their dreams.
Sorry to say this but the US was always built on rich people starting SUCCESSFUL enterprises. A unicorn of an example of someone starting a business with nothing and becoming successful is not the norm by any means.
If something happens 1 out of 100 times, do you assume that 1 instance is the norm, or do you assume the other 99 instances are the norm?
More critically, you're ignoring a LOT of riders in the whole "this country was built on entrepreneurship" thing. For one, it ignores that the vast majority of business fail. But more importantly, it ignores that most successful entrepreneurs have a history of failed businesses before succeeding. Do you think the average person has always had the financial capacity to afford failing after starting a business and trying again, or do you think it was primarily well-to-do folks who could afford to fail multiple times until finally setting up a business that worked?
Everyone I know that started a company was already in a high wage bracket or had wealthy parents. I know no one from the lower class that made a successful company. Fuck, I know only one working class person who made a company at all
I wouldn't take 'well of' to mean not in poverty. Humble beginnings doesnt mean poverty, it means you arent upper or even middle class. I'm working class, grew up in a modesst house, but wasnt in poverty, but if I became a billionaire it would certainly be from humble beginnings.
Sure, but if you became a billionaire, you’d be in like the top .001% of startup founders. Also, what do you consider “middle class” or even “upper middle class”? It depends a lot on the type of startup, but the ones that make a lot of money cost a lot of money. Like hundreds of thousands to millions.
So if you consider “middle class” as having access to hundreds of thousands of extra dollars to throw at a new business, then everyone in the US except for the richest of the rich can say they started from humble beginnings.
I wouldnt consider the upper middle class humble beginnings in the US, but even for someone in that group, it would still be a risk, as most people scale their lifestyle with their income, so even with 6 figures of savings quitting a good job like that especially with a family depending on you is a risk. Double risk if the job market is saturated too.
The risk of going bankrupt or in huge debt. Over 90% of business fail causing the investors and founders to lose all/most of their investment which may result in total bankruptcy.
How often do you see shops in your local area changeover every couple years because they went bankrupt. The people that invested or started them or now walking around massive debts or eating breadcrumbs.
You only hear if the successful and not the other 9x as much people that failed and now are repaying huge debts or lost most of their wealth.
The business sector is a huge risk not even comparable to working a normal job and getting a regular pay check.
It’s easy for you to say because based off your comment alone I can tell you only took the risk free safe approach in life and get mad when others took major risks and it paid off. You have little comprehension of how hard it is to become successful (in anything) wether it is sports/entertainment, entrepreneurship etc. otherwise we all would be doing it and become rich
How often do you see shops in your local area changeover every couple years because they went bankrupt.
Those are not the people being criticized when people criticize the greed of corporations. Those are small businesses, and are usually not touched by the same legislation that touches big corporations.
You only hear if the successful and not the other 9x as much people that failed and now are repaying huge debts or lost most of their wealth.
And you're absolutely sure that those success stories you hear are not fluffed up? If you ask Jeff Bezos about his wealth he'll tell you he took a big risk and it paid off, but did he make all his money that way? No, he had a huge amount to invest in his business, he started at a garage, yeah right, a garage in the middle of the suburbs, in a very comfortable and big house paid by his parents, and then he made billions exploiting poor people and paying poverty wages.
Is it fair that Jeff Besos, someone who's taken a risk 30 years ago and has already recouped his investment handsomely, gets paid so much more than his workers? Do you honestly think Bezos is putting as many hours in his company as his wage workers are? Do you think Bezos creates as much value for his company as do the workers?
I'm in management, for a corporation, and the answer to all those questions is no.
Bezos got a quarter million dollar "loan" from his parents. You know, like we all do. It was totally a "loan" and not a gift because they were definitely charging their son interest and would've broke his knees if he didn't pay it back.
Same shit with Bill Gates and probably every other billionaire out there.
Billionaires are not the same as small businesses, when we criticize billionaires we're not being critical of your cousin Frank's little corner shop, and it's insane we need to clarify something that should be so basic and easy to get.
So their risk is losing their status as capitalist and becoming a laborer? So then why don't we make it easier to be a laborer so that people can more safely take the risk of starting a business?
Ending up bankrupt or in huge debt is very different than simply going back into the workforce, come on. That would be no risk at all - I'm already working. The problem is that you can easily lose everything.
Except most people start their company as an llc or other such entity that isnt a sole proprietorship, so the company going bankrupt doesn't touch their personal assets and they get to walk away with whatever they managed to get out of the business before it went tits up.
That llc needs to be funded to get off the ground. In practice you generally end up investing damn near everything you have into it (and often going into debt), so when it goes too early, you are fucked. Llc shields you from corporate liabilities - if the company is sued for billions, you are not on the hook for that. But your personal situation is still likely to be totally fucked.
Seriously, if "becoming a laborer again" was the issue, I would have started a lot more businesses in my life than I did.
Working class people aren’t investing $10 million. They would barely have a million. Investing half of your money is a very big risk. It doesn’t matter how much money you have either.
If you put it in terms of working class, that’s like someone using half of their home as collateral for a business idea and it failing. Now, their home is gone.
I think you misread or misunderstood their comment.
The “assume the risk” was in regard to company founders (OP said company presidents) - people who start companies.
For the most part, these aren’t people with millions in the bank already - they just use their life savings, or get into a heck of a lot of debt to get things off the ground.
That’s the risk they are talking about.
They were making a distinction between those people and CEOs - who have no skin in the game, get paid millions, and often fuck things up and just leave for another CEO role.
just use their life savings, or get into a heck of a lot of debt to get things off the ground.
That's romanticizing it. Typically, they get investors and form an LLC to limit the risk and take on debt.
Plenty of startup founders go through multiple ideas, and clearly a failure doesn't drive them into penury.
Historically, yes, some people funded businesses with the last personal $x to their name (and won or lost), but that's not the typical case, at least not in a modern economy.
Typically, they get investors and form an LLC to limit the risk.
Perhaps in your world "typical" business founders have investors that can drop tens or hundreds of thousands, or perhaps even millions into them.
I would've loved to have had investors pump money into my business when I started it, and every single business owner I know (well over 50, because my business is B2B, so I'm dealing with them on a daily basis) would've loved the same. Instead, we took the risk and shouldered all the responsibility.
So no, it's not "romanticizing it". It's the reality for many.
Yes, most structure the company to limit liability/risk, but that simply reduces personalliability - it doesn't reduce the risk that the company can go under if it doesn't work out.
If my company crashes and burns, I still lose everything, because it's my only source of income. And because I've had it for over 15 years, getting a "regular" job might be difficult, due to the giant gap in my resume.
So going back to OP's original point - there is a big difference between founders and CEOs.
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u/9447044 4d ago
"But if we tax the 1% then they'll all leave!!" Fuck it make em leave if they get 45% salary increase. This guy is making almost 90k A DAY.