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Seems like a solid plan to address issues with disparity in compensation / upside between different tiers of employees. It spreads the reward but still allows
by poof131 11y ago
Seems like a solid plan to address issues with disparity in compensation / upside between different tiers of employees. It spreads the reward but still allows the founders to maintain larger ownership chunks, which is the important part. Since equity is such a critical part of compensation [1], I’d love to see this implemented more, but I have a feeling it will mostly get lip service with people hiding behind “this is the standard.” Founders shouldn’t accept the “it’s standard” argument from VCs when negotiating terms, and employees shouldn’t accept the same argument from founders. You can’t have your circular logic and eat it too. Standards change and just because something is a standard doesn’t justify it’s existence. Slavery was pretty standard for awhile and I’m glad we got rid of that one.
[1] https://medium.com/the-wtf-economy/in-his-essay-on-income-inequality-paul-graham-credited-me-for-pre-publication-feedback-ff8a0b295a1b#.okgzweqp6 https://medium.com/the-wtf-economy/in-his-essay-on-income-in...
- kzhahou 11y agoHow difficult would it be for a startup to create two stock classes, where one has outsized voting rights? Then the monetary value could be spread more evenly to non-founders (i.e., not a 50-to-1 ratio between founders and employee #1), while the founder and investors maintain voting power.
- poof131 11y agoI believe it’s very possible, just not standard. A number of companies have adopted such measures to great effect for the founders to maintain power over investors [1], but not many have used similar legal tools in reverse to help spread the upside with earlier employees as suggested in the first comment. Perhaps the standard should be for founders to get ‘super-voting’ shares and use some of the power to distribute better upside distribution. Sell it in both directions, longer term stability and more employee alignment. [1] http://www.businessinsider.com/googles-co-founders-are-going-to-sell-44-billion-worth-of-shares-2015-2 http://www.businessinsider.com/googles-co-founders-are-going...