Plus, could you add your address and when you next plan on being on vacation that would be extremely helpful. And your mother's maiden name, your 1st pet's name, your elementary school's name, and your nickname in school. This last one is just for fun really.
No way in hell this is going to be representative, of anything at all.
Well-off people who feel like bragging about their wealth are not representative of the group as a whole, nor would you know what fraction of the group they comprise. The same goes for not-so-well-off people who feel like sharing. Then there will also be posers and fakes. You just cannot extract anything meaningful from a sample of 100 of this sort of data.
Look up "voluntary response bias" in any statistics tutorial. The general lesson you'll learn: "voluntary response data is meaningless". To draw any sort of valid conclusion, you really need random sampling.
If you can't get random sampling (which is often hard when you're looking at something personally sensitive like income or net worth), the best you can do is to select your population through some means presumably uncorrelated with the quantities you're trying to measure, and then randomly sample within that. For example, if you were a bank or other financial institution, you'd have data on everyone's net worth, and you could randomly sample within the population of business owners there to draw useful statistics. There's still some sample bias (eg. perhaps the demographics of "your account holders" don't match the demographics of "all business owners"), but at least you won't get increased response rates from people with extreme values.
This, incidentally, is why major consumer Internet properties like Google and Facebook are so valuable. They have data on a large swath of humanity, selected because they own a service that virtually everyone finds helpful, and so they can run experiments within that population to draw useful conclusions about human nature.
The only cheap/practical way to do this is to sample a subgroup chosen because they can be measured. Say, YC S13 founders today, or Stanford alumns in a specific group on campus (START?) 5 years later who are in close communication.
The group will not be representative of the total population of entrepreneurs/founders, but the group will give internally high response rate and thus significance for that group. And an ACCURATE survey of Stanford alum founders will actually be more representative of overall founders than a voluntary-response set would be.
You then ALSO ask better questions. That's also bad in this survey, but not the worst part -- the voluntary response bias is.
(I want to be positive overall, though -- it is awesome that you are surveying this. I just want you to do the best job possible.)
We might as well say "So I created this random number generator and seeded from the Internet and allowed people to comment on the random numbers they put in! We even gave an incredibly high example that honestly won't skew the results at all."
When I read the example I immediately thought, man, I need to move to the bay area... Until I realised it was made up.
Woah what am I doing wrong? Incoming 5 years ago (at age 24) was 45k a year, and at 29:
$330k liquid split over checking and savings. 400k in "retirement accounts" - bearing in mind that 18k (current max 401k contribution in 2015, so this would be higher than years ago) times 8 years (assuming starting work at age 21) would be ~144K in contributions, so pretty damned good returns there...
then on top of that 8.4 Million in illiquid assets?
I seriously feel sometimes that there's things that have gone WAY over my head despite living around here for 8+ years and working in tech.
Well, it did say "example entry" — not actual entry. (Though, it could be real and just extracted for demo... it's not specified.)
Startups in and around SF generate between 500 and 1,000 new millionaires per year on average over the past 5 years. The big dump of Twitter (~1,000) and FB millionaires (~3,000?) all at once during some years skew the averages.
All the excess liquid wealth adds up after a while (and now you can't afford a one bedroom apartment unless you make over $200k per year because everybody else is so individually wealthy and practically insensitive to prices.)
You clearly didn't start a company with a $15 million exit. I'm sure all the advice/numbers here will have a MASSIVE MASSIVE amount of selection bias and probably don't apply unless you're guaranteed to be making millions.
We want the one person company all the way to the 1000 person company to fill out the info. Please, we'd love to here your story, regardless if it was a hit or not...just as long as you were or are doing it fulltime.
If you own a business with no employees (therefore not beholden to the safe harbor rules) your 401k contributions can be up to $53k (for 2015), including the $18k personal contribution and an additional $35k of profit sharing. These numbers are scaled up each year, but I can absolutely see $400k spread across 401(k) and IRAs for a successful business owner.
If you are taxed as an S-corp you can deduct 100% of your health insurance premiums, at least through 2015. The IRS is still trying to figure out how the ACA applies, so this may be different in 2016.
It's interesting to think about what that kind of money actually does for you. First and foremost, you can retire comfortably. But then, between splurging on luxuries (like an expensive home or two) and investing (particularly indulging in a personal interest, like space), it's not clear what that kind of wealth really does for you. Perhaps it is a social function of giving access to people with similar levels of wealth, and, one would hope, similar levels of talent/intelligence/wisdom. (Or maybe the world sucks and most rich people are just lucky and cunning.) Certainly it puts you in a potent position of advocacy - imagine being able to tell Glen Greenwald, "I love what you're doing so here's $5M to start a media company that supports and expands that."
I'm assuming that the founders they're looking for are already on a Series A or have a nice cushion of savings or positive cashflow? I'm making 5x lower than I previously did (thanks for reminding me!) after bootstrapping through all my savings and such.
TBH it seems like they're doing a survey to confirm a story they've already written on founder successes. That's a good, rags-to-riches story but the hard numbers is that 80% of startups will fail within 3 years and those founders will be financially burned.
No no - we have zero assumptions. We want anyone who's making a living as a founder. You can be a one man operation, 500+ employees, or anything in between.
I'd be more interested in something representative of a broader sample than just those who've "made it". The interview in the article advises "Bet on yourself instead of saving in retirement accounts", I wonder how that would change if she hadn't had a 7-figure exit?
OTOH maybe you just need to be so self-assured to the point of being delusional to succeed at this game. ;) But tautologically, not everyone can be "above average".
| Bet on yourself instead of saving in retirement accounts. You will make more money in the future, so instead of putting $100 a week in your retirement account, spend it on books or working your side project.
This type of data is subject to so many biases there is no way to make it useful (in fact I'd argue that it is actually worse than useless, it's misleading and incorrect). I'd love to be corrected on this, so if you have ideas for gathering this kind of data in a useful/non-biased way I'd love to hear it.
Really looking forward to seeing the results. Still, what a redonkulous amount of money. Must be nice to sell a business and then move right into a comfy $250k a year job.
