VC capital is useful assuming it's a winner-takes-all / capital-intensive market, but many markets are not, in which case optimizing for $ raised is actually a distraction
Example: Delicious was sold to bootstrapped competitor, Pinboard for only $35K. Pinboard is still around to this day
Cost $300K total: $100K to exercise, $200K in paper gains. Looks like it will pay off bc valuation has continued to go up, but the 90-day exercise window is punishing for cashflow.
When it's worth it, it's very very worth it. Whether it's the right thing for you depends on your risk appetite and financial situation.
Some people say: go to big tech first, make $, get the brand, then take the startup risk
Reality is: longer you wait to take risks, harder it becomes. Recommend doing it sometime in your 20s if the adventure appeals to you, knowing that the big equity payout may not happen. You can improve your odds though by getting good at picking
1. Mostly through referrals / people they know / sometimes investor intros
2. Lol some are good, most probably don't make a difference
3. Easy to coach, strong work ethic, can start contributing from day 1
More importantly for you, picking the right startup is most of the battle. Make sure you research and interview them; if they don't blow you away, you're better off in a bigger tech company that pays more
If you are interested in startups, this list lets you track the portfolios of Tier 1 investors: https://topstartups.io/
You raise a great point: does it make sense for highly compensated tech talent to bet on startups with their time / labor?
Ultimately, decision depends on what you are solving for. If it's purely about $ in the hand, startups never make sense.
If it's about participating in potential massive upside, investing is a perfectly good choice.
Difference between investing vs. joining startup is that you get to build stuff from scratch and operate more like a business owner. You'll do more and learn more in a shorter period of time. This makes a ton of sense IF you like that sort of adventure. Also allows you learn on someone else's dime before you start your own business
If you're joining VC-backed startup, the outcome they'll be shooting for is $1B+ exits, and you can get 2-3% equity if you join early.... so there's that