I didn’t choose entrepreneurship to get rich–if I wanted to do that, I could simply have stayed at my first employer D. E. Shaw & Co. (David Shaw recently sold a 20% stake in the company to Lehman Brothers for $3 billion, and most of my former colleagues are multi-millionaires by now). I’m an entrepreneur because I enjoy it. Although it is my contention that without at least the slim chance of getting rich, I couldn’t justify it. Entrepreneurial wages and payoffs may be worse than Wall Street, but we’re not talking NGO-level compensation here.

However, by working at a startup at a young age, if you’re ambitious and a self-starter, you can assume responsibilites that might take years to reach in a large organization. There is an opportunity of current income by working for a startup, not to mention generally increased stress levels – so it’s not for the faint of heart.

The real gem is the risk/rush of starting your own business and the joy of making it worth — now that’s where wealth comes from — independence.

That’s a very good and detailed explanation. I had a bunch of friends from Excite who went to eBay in 2000 and all did really well when eBay got its “second wind” as a public company.

In web 1.0, it felt like everyone at all levels of startups was getting rich. In reality, it was mostly only founders, investors and senior officers that became wealthy as a result of most startup exits, even at the crazy web 1.0 valuations. Lower-level employees only got “retire now” rich at startups that became major companies with market caps or acquisition values >$5B (and whose founders/senior officers became near or actual billionaires).

VCs and founders do well when companies go public; I’d argue that employees only get rich when companies continue to grow at a torrid pace for *years* after they are public. Big tech companies that grew to tens of billions in market cap over time are the best examples: Microsoft, Cisco, Amazon, Google, eBay, Microsoft, Intel, Oracle, etc. Save for the internet bubble and Google, most of these companies took >10 years to scale those heights.

If you really want to get rich quick, found a hedge fund and outrun mean reversion for as long as you can. Also, as Warren Buffet has said, if you build up a business over a period of years and sell it, you’re not any richer than you were before–you now just have assets in the form of bonds and stocks of companies you don’t know as well as the one you just sold.

I totally agree with what you said. I wrote the post because I was perplexed that someone would see the current crop of web 2.0 companies as a way to get rich quick.