I think its a dangerous generalization. I feel its more about knowing the market rate for your employees and making sure they are compensated for what they con

I think its a dangerous generalization. I feel its more about knowing the market rate for your employees and making sure they are compensated for what they contribute. Equity is only one piece. In your example, it sounds like a pretty weak deal. However, thats not to say that the lesson to learn is to attract employees through equity. Owning equity is about risk. Employment is about security. If your really a savvy investor and think that equity in a given company is the best return on your investment, you should offer to put as much cash and man-hours into the company as you can for the greatest return. Then you are on par with the founders. For interesting reading, look at Warren Buffett's philosophy on employee and management stock options. In earlier days he attracted key management with a fair salary, a good work environment, and an absolute lock out of equity.. he figured he was the only one taking the risk.