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If your senior developer has something horrible happen to him* , and you then immediately cut him loose because he's of no use to you any more, what happens to your product? You're a startup, so you're unlikely to have huge amounts of redundancy to cover for them when they refuse to train their replacement or answer support questions about your complicated 6 month time-critical project from their dying, dysentery-stricken family members' bedside.

Also, taking that sort of hard-nosed attitude will make the other developers on your team more wary, which will result in higher salaries, more turnover and (if you're a real idiot) no new staff, since word gets around. Ultimately you depend on your staff, so if you play hardball you're likely to reap the 'benefits' further down the track when you need them.

* - this was your original point, not some "meditation trip to Tibet"

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