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paulddraper parent
My bank account says otherwise, but it depends.
ikiris
So do all the lottery winners. It doesn't really change how a lottery works, or the likely financial result.
mgraczyk
What fraction of lottery participants win, vs startup employees? It's rare and there is luck, but the quantities matter. You are much more likely to make money from a startup and it's much more under your control as an employee
reillyse
That’s an interesting thought experiment actually.

If you think about the amount of money given up as a startup employee you will definitely get some winnings.

For example, say as a startup employee you are earning/being compensated 80,000 a year in equity. If you bought $80,000 of lottery ticket’s each year how much would you win. Depends on the lottery but most lottery’s have a rough payout of approximately 50-70%. Let’s say it’s 50%. So you would expect to receive back $40,000 per year.

Do half of all startups equity turn into cash, I think not. So probably more likely to make money from the lottery.

mgraczyk
You are confusing expected value with probability of "winning".

The purpose is to trade EV for a small probability of high payout. It's less extreme than the big ticket lotteries but more extreme than a scratcher. If that's not for you, don't do it

Also your last point is either obviously not true (if you're talking about big lottery winnings) or trivially true (if you're talking about $1000 scratcher prizes). More people made life changing money from a single company (Facebook) than all California lottery winners combined across all time

reillyse
I think you are confusing how lotteries work, most lotteries have additional prizes not just the big grand prize. There are a range of prizes.
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paulddraper OP
Less than half of startups have exits…

But most startup people don’t work at most startups.

reillyse
I've worked at startups that have had exits and the employees got zilch. I think even in the startups with exits the probability of an employee having their equity turn into cash money is very low (also I doubt 50% of startups have exits - I hear a number of 10% more often and even that seems high, I'd imagine 10% of YC startups have an exit and they are the most likely to succeed so I imagine when you add in all the other startups that percentage gets far far lower).
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paulddraper OP
Of course.

Also…the lottery and startups work very differently.

coleca
Yes, the lottery has rules and governance. It's a much safer bet. Startups can decide to devalue their employees' shares. I'd venture that the odds are at least stated on the back of the ticket with the lottery. Employees of privately held startups are often sold a dream of future riches that rarely happens. Even where there is an exit, often even founding employees get taken for a ride.

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