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It is sad founders and employees are considered different groups here.

brianwawok 10y ago
Why shouldn't they be? Founders put in the initial blood sweat and tears for below market rates. Some guy hired at year 3 for market rate? Just an employee.
- JamesBarney 10y ago
  Because 95% of the time it's not market rate because the employee thinks his equity is worth something, and founders never disabuse them of this notion. And many owners pretend like the equity is some form of employee ownership. Then they never inform them of the multitude of clauses that shift all possible risk away from the company, founders, and investor onto the backs of the employees. Again I want to reiterate that all of this is great if the the company is upfront with possible employees about how the deal is structured, and that the employee is just an employee with a few lottery tickets so they might as well be working at AmaGooBookSoft for twice as much money. And upfront the owners told the employee that they definitely should not put in their blood, sweat, tears, and family time into the startup because they're not a part owner, they are "Just an employee".
  - brianwawok 10y ago
    Oh 100% agree, many startups abuse employees with fake kool aid and pretend dreams. Not just startups, trading companies do this, sure other markets do too. Talk a lot about the awesome that will happen down the road, but nothing in writing (or writing that contradicts claims). Feel bad for people that sign up for such bum deals...
- arcticbull 10y ago
  Where do you draw the line? How about employee #1? They're probably paid the same (almost zero) as the founders, over almost the same period of time, but with 1/10 of the equity. Are they employees or founders? Neither?
  - brianwawok 10y ago
    Should be a curve I guess not a line. But every situation is different. Some employee #1s make say 75% of market rate. Some make less. Some make more. It depends in each case if it is "fair". I am not sure what the word founder really means. There on day1? > 33% of the company? Not sure.

Why shouldn't they be? Founders put in the initial blood sweat and tears for below market rates. Some guy hired at year 3 for market rate? Just an employee.

JamesBarney 10y ago
Because 95% of the time it's not market rate because the employee thinks his equity is worth something, and founders never disabuse them of this notion. And many owners pretend like the equity is some form of employee ownership. Then they never inform them of the multitude of clauses that shift all possible risk away from the company, founders, and investor onto the backs of the employees. Again I want to reiterate that all of this is great if the the company is upfront with possible employees about how the deal is structured, and that the employee is just an employee with a few lottery tickets so they might as well be working at AmaGooBookSoft for twice as much money. And upfront the owners told the employee that they definitely should not put in their blood, sweat, tears, and family time into the startup because they're not a part owner, they are "Just an employee".
- brianwawok 10y ago
  Oh 100% agree, many startups abuse employees with fake kool aid and pretend dreams. Not just startups, trading companies do this, sure other markets do too. Talk a lot about the awesome that will happen down the road, but nothing in writing (or writing that contradicts claims). Feel bad for people that sign up for such bum deals...
arcticbull 10y ago
Where do you draw the line? How about employee #1? They're probably paid the same (almost zero) as the founders, over almost the same period of time, but with 1/10 of the equity. Are they employees or founders? Neither?
- brianwawok 10y ago
  Should be a curve I guess not a line. But every situation is different. Some employee #1s make say 75% of market rate. Some make less. Some make more. It depends in each case if it is "fair". I am not sure what the word founder really means. There on day1? > 33% of the company? Not sure.