NUMBER OF THE DAY
How Joining a Startup Hurts Your Earning Potential, by the Numbers
A study finds that employees at small startups face a significant long-term earnings gap against their counterparts at established companies
17%: That’s how much less employees who joined early-stage startups earned in a decade compared to those who had joined established companies.
This entrepreneurial wet blanket comes courtesy of a Danish study, whose authors tracked the earnings of startup workers in Denmark from 1992 to 2012 (which the authors assert holds true for other high-income countries like the U.S.). Despite the allure of stock options, the researchers found taking boring nine-to-five cubicle jobs actually ended up being more profitable in the long run than joining a scrappy new venture, particularly at startups with fewer than 50 employees. Not only did the roles pay less, but workers at startups — which have a higher risk of failing — also experienced more periods of unemployment.
Amazingly, these same trends didn’t hold true for startup founders, who earned more in the long run than their peers who never became entrepreneurs.
So the next time a founder tries to hire you for their team, you may want to consider asking them to join yours instead.
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