The author suggests that VCs should invest more money to allow their portfolio companies to pay competitive salaries, a trend already observed in the AI sector. The current situation is seen as detrimental to startup employees, who are essentially subsidizing profits for VCs. While VCs have the advantage of diversification, startup employees do not have this luxury.
Key takeaways:
- Startup founders and early employees often make about half of what they could earn at major tech companies, which may discourage potential startups from being created.
- The founders who do proceed are typically those who have significant cash from previous startups.
- There is a misalignment between founders and investors, as founders often want to exit while investors want them to aim for a 'unicorn' exit.
- The author suggests that venture capitalists should invest more money to allow their portfolio companies to offer more competitive salaries, which is currently happening in the AI space.