I worked at a startup that tried that. Within 4 months, a good chunk of the best tech people were gone. Within 12 months they had gone under.
Maybe for an economy-wide recession where your workers have no other options. But if it's just startup risk that are making you founder, you're basically guaranteeing a death spiral. There is some chance if you make it a fixed-term paycut with a payback with interest, but you better have a real cult leader as CEO to get people onboard with something complicated instead of just getting a job at Google.
It was the beginning of covid and we were in the travel industry. It was messaged well and the executives took a bigger % paycut than everyone else, so no one was angry about it.
The best people went to FAANG (immediate comp) or one particular fintech startup (good shot at an exit).
Maybe for an economy-wide recession where your workers have no other options. But if it's just startup risk that are making you founder, you're basically guaranteeing a death spiral. There is some chance if you make it a fixed-term paycut with a payback with interest, but you better have a real cult leader as CEO to get people onboard with something complicated instead of just getting a job at Google.