Last week I published You Just Raised VC? Sorry to Hear That. The response was bigger than I expected. A lot of founders messaged me with some version of the same question:
"Okay, so if the math is that bad, how do I actually play this?"
Fair question. Here's how.
I have two pieces of advice. One is easy and most founders ignore it. The other is harder but every founder who raises capital should be doing it.
1. Pay Yourself A Market-Rate Salary
I see this constantly. Founders take no salary or a tiny salary, tell themselves it's a sacrifice for the company, and convince themselves it'll all pay off when the company sells.
Re-read the math from the last post. 75% of VC-backed founders make $0 at exit. The "pay myself later when we sell" plan has a 1-in-4 chance of working at all, and even smaller odds of paying enough to make up for years of below-market wages.
You are not being noble by underpaying yourself. You are taking a bad bet on top of an already-bad bet.
How to figure out your number: Don't ask "what am I worth?" That question is impossible to answer honestly when you're the founder. Ask instead: "How much would it cost to replace me?"
That reframe makes it concrete. Look at your stage, your revenue, your role, and what you'd have to pay a CEO, CTO, or operator to do your job. There are plenty of online tools that benchmark this. If you want to go deeper, hire a compensation firm for a few thousand dollars.
The whole point: if in 10 years your VC-backed company implodes and you walk away with $0 from the exit (and statistically, you will), you should at least have:
A market-rate salary for a decade
Maxed-out 401(k) contributions
Health insurance and benefits that didn't bleed your personal savings
A normal cost of living covered without burning through credit cards
Basically, you should be in roughly the same financial position you'd be in if you'd taken a job at Amazon, Microsoft, or Google for that same decade. The startup is the upside bet on top of that. Don't sacrifice the base.
Founders who underpay themselves are essentially making two bets at once: a bet on the company AND a bet against their own financial security. Stop making the second bet.
2. Take Chips Off The Table At Every Round
This one is harder, but it's the single most important thing a founder can do to align their interests with their investors.
Every time you raise a round, sell some of your existing shares to the new investors at the round's price. This is called a secondary, and it's much more common than founders realize.
The argument against it usually sounds like: "But I want to be aligned with my investors!" That's exactly backwards. You ARE NOT aligned with your investors. Here's why.
Your VC has spread their fund across 25-50 bets. They need ONE to hit a billion-dollar outcome to make their fund work. The other 49 can go to zero and they're still fine. You don't have that luxury. You have one bet. You are that one bet. If your company doesn't hit the moonshot outcome, you have nothing.
The math is asymmetric. Your investors are diversified. You are not.
Selling some shares at each round is how you create a personal hedge against the structure of the game. Even if the company implodes at Series D, you've taken enough chips off the table to have something.
How much to take? Enough to remove existential financial pressure, but not enough to kill your motivation. A useful frame: enough to buy a house, fund your kids' education, or have 2-3 years of runway in the bank. Not yacht money. Sleep-at-night money.
Here's the counterintuitive part: this is actually good for your investors too.
I have watched it happen too many times. A founder reaches Series B, C, or D with zero personal liquidity. The first decent acquisition offer comes in, and the founder pushes hard to sell. Why? Because they've had zero liquidity for 8 years and they're exhausted. They take the $80M exit instead of holding out for the $500M outcome the investors want.
A founder with some chips off the table doesn't have that pressure. They can swing for the fences because they're not financially desperate. They can hold out for the moon.
If you're a VC and you're reading this and you're against secondaries: you're optimizing against your own returns. The founders most likely to drive a billion-dollar outcome are the ones who aren't quietly broke at Series C.
The Bottom Line
You can't change the underlying odds. 75% of VC-backed founders make $0, and that math doesn't care about you.
But you CAN structure the game so that even the $0 outcome leaves you whole. Pay yourself a real salary. Take chips off the table at every round.
Do those two things, and the worst-case scenario goes from "lost a decade and have nothing to show for it" to "ran a meaningful company, got paid like a professional, took some chips off the table, and have my swing at the fences fully funded."
That's the playable version of the game.