Rich or Royal ??

Well ask anyone and they would say they want to be both rich and powerful, but in practical this is not possible always is it ?? You have to lose control if you want higher pay or profit, you have to forgo higher profit if you want all the control, so what is it that you want ???
This is a fundamental dilemma not only within entrepreneurs but one that kills many innovators and even salaried employees. The conflict between selling their ideas or patented products for royalties and starting their firms. As quoted by Noam Wasserman, a professor from HBS, " The profit motive is one of the major motivations for becoming an entrepreneur, and the one on which past entrepreneurial research has focused, going all the way back to Adam Smith, Joseph Schumpeter, Israel Kirzner, and other pillars of economics." However this is not entirely true is it?? Only later in his research did Wasserman also find the truth about the conflict between rich and royal. People do crazy things to have control over the firm, some wise decisions, some harsh, some motivating, some risky.



Having control over the firm has many disadvantages attached to it sometimes which are out of the blue. While the main hurdle would be finding angel investors who trust the vision of the entrepreneur, the others are limited resources and network. The most common problem is the direct impact of the decisions taken for the growth of the firm on the entrepreneurs pocket. He could remain royal or the king of the firm but as mentioned somewhere entrepreneurs as a whole do not make more than they could make if they were employed by others, and make significantly less than expected from a risk-return perspective.


Ofcourse such a firm would do miracles if the entrepreneur is a great visionary and could access the future market correctly. He could not only make huge personal profits but could expand the company quite faster than his peer where every decision has to be approved by majority of the equity holders who may or maynot share the same vision.



So now back to the fundamental question what is a better option?? Rich or Royal ?
Should a salaried employee consider a high paying firm or one with job satisfaction, should an innovator sell his product for royalties or start a firm of his own, should an entrepreneur continue having complete control over the company or selling control to investors ??
These questions have no correct answer because there is no wrong answer. The correct decision depends on personal vision and management of available resources vs risks involved.


Similar question arises with equity vs debt, which no one can answer. Right decision is not one taken based on current situation but one based on the future. The one which keeps the firm going strong no matter what.



Please note: I'm not a sexist, infact most of the time I'm pro-women, its just easier to write 'he' instead of 'he/she' whenever a pronoun is used for an entrepreneur :)