My answer, originally published on Quora.

Q: Why would anyone want to be an employee and not an entrepreneur?

One of the most difficult issues I've faced as an entrepreneur is looking smart people in the face and telling them to work for my company when I honestly have a hard time understanding myself why anyone would ever want to work for anyone else.

This is a huge catch-22 in my head: you want to hire the best people, but the best people would (and should) want to run their own businesses.

As an entrepreneur, you get compensated way more, you learn way more (you learn all the parts of the business instead of just one), you're in control of hiring and firing (the boss' job is more secure than the employee's), and you tend to get all the credit (whether or not you deserve it).

It is also easier than ever to test ideas, and get some kind of business going with minimal capital/time investment. Downside is also limited as there are stronger methods now to mitigate risk (lean start-up). I can go on and on.

My Answer

I'm fascinated that most of the other answers to your question assume that the only entrepreneurial path is founding a startup, instead of freelancing or independent consulting.

I'm an entrepreneur too, but not at a startup (although I count many startups among my clients). I'm an independent software product management consultant. I get all the benefits you mentioned -- greater compensation, learn more areas of the business, control of my own destiny, less risk, etc. (Yes, LESS risk because as an independent my ability to get business depends on the results I deliver and not internal politics). I have none of the nightmares some of the other answers mention.

I very much understand your feeings. People who are truly the very best in their fields could generally go freelance, immediately win lots of clients, make much more coin, and enjoy better control of their life. If they don't want to manage or hire other people, they don't have to. They could focus on what they love and do best.

As for why more people don't do it, I am guessing it is because it never even occurs to them. So many (like most of the other answerers of this question) see only two paths: 1) employee or 2) founder of a classic Silicon Valley-style VC-funded startup. Too often, they forget that the third path even exists.