
Missing: Working Class Founders - teucris
https://sifted.eu/articles/secret-founder-working-class-founders-socio-economic-diversity-startups-investors/
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mytailorisrich
'Working class' people start plenty of businesses, but maybe not many tech
businesses.

Having enough personal savings to afford to work on a project without pay for
some time does not directly relate to background unless you have never work
before and rely in mum and dad... It relates to your capacity to save, i.e.
your previous job, which in turns usually relates to you education
level/degree (which also impacts what type of business you are likely to
start).

So, again, it boils down to investing in education for all. Meritocracy, not
class background.

~~~
eesmith
This is more specifically talking about the startup scene with VCs and angel
investors.

"unless you have never work before"

What?! Consider these quotes "You’ll need two years of savings" and "I want to
see you put £500,000 from your own pocket, friends and family — and then I’d
tag along".

You think most people can manage to live for 2 years on savings?

I can, but that's because we've been saving up for years to buy a house, and
we would have to draw from that nest eggs.

And ... £500,000? Who's more likely to have friends and family which can
afford that - working class, or professional class?

I come from a working class family - farmers and machinists, a reporter; and
pastors and missionaries, who also aren't known for their wealth. I was the
first on either side of my family to be in a PhD program.

There's no way I could ever have raised £500,000. For that matter, I went to
an in-state state school because my parents couldn't even afford extra money
for a better out-of-state college that I was accepted to, even with a 50%
tuition waver.

Meritocracy my ass.

~~~
mytailorisrich
You do not _have_ to take everything you're told seriously or as being
representative.

£500k means you already have made your money, perhaps through a previous
business or a career. It's not an amount that 99% of people have in cash at
the bank, even if they are well off, even if they ask family. This is not
representative and does not inform on any debate on 'diversity'.

Now, if you do have access to that kind of money from your personal wealth or
family and friends then use it and delay getting VC money.

To live 1-2 years on savings is quite different and one can do it with £30k
(minimum wage in the UK is about £15k pa), which is an amount you can save in
a few years if you have a job in tech/well paid job in general (we're back to
your study and degree). Personally I had close to EUR100k cash savings within
5 years of graduating with an engineering master degree without help from
anyone (who couldn't help anyway).

All that being said, it is quite reasonable for an investor to want you to
have skin in the game and to ensure you can live with little to no pay for
some time.

~~~
eesmith
"have skin in the game" is code for "don't want to work with poor people."

Tell me, who has more skin in the game in the following scenario: B and C both
get into the same school. B comes from a family with two parents making
$150K/year each. C comes from a family with two parents, one making $50K/year
and the other staying at home to raise the kids.

Both get into the same school, take the same classes, and pass with the same
grades. (Set aside that B is more likely to have had test prep help, college
admissions help, etc. than C - I stipulate they are of equal merit.)

The main difference is that C graduates with $35K [1] in debt, while B has no
debt because B's parents could pay for college.

Both B and C have equally good ideas, and look for angel funding.

B can come in with $150K of F&F funding. And if the venture doesn't work out,
the family has a other money saved up. C can get $50K of F&F, but is still
$35K in debt, accruing interest, and that $50K is about all the F&F can
afford; cutting expenses to the bone. They are really hoping for C to make it
big.

The angel 'D' decides to fund each for $250,000. D's stocks alone make
$1M/year and D is angel investing partly as a hobby after taking early
retirement.

So, who has more skin in the game: 'C' who's all-in committed, 'B' who can
chalk up a failure to a learning experience, ... or 'D', who has the most
money but for which losing even $500K won't have a big impact?

I argue that the concept of "skin in the game" = "money" is a rich person's
way to prioritize money over _real_ skin-in-the game; the limited time we have
on this planet, and the chance to enjoy it.

Why would you choose 'B', who might flake out on you and lose focus or
direction because failure is not that big of a deal, instead of 'C', for whom
financial success is a much more serious matter?

[1] $35K is roughly the US average - [https://www.cnbc.com/2018/02/15/heres-
how-much-the-average-s...](https://www.cnbc.com/2018/02/15/heres-how-much-the-
average-student-loan-borrower-owes-when-they-graduate.html) \- the UK is
different, but I'm from the US so that's what I know. Given the numbers you
listed, it would have taken you about 2 years to pay off that debt, giving "B"
an extra couple of years experience over "C" in the startup scene.

[2] On a more personal note, my father had a stroke when I was 25 and in grad
school. He was on disability for the rest of his life. Once I started making
industry money, some of that money went to my parents, like to buy a car that
didn't leak oil and break down often (a family friend owned a garage so we get
free labor, which helped), and pay for new siding for their house. "B" likely
wouldn't have had to worry about needing to support family anything like "C"
would.

Meritocracy my ass.

