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Employees are continuing to put in effort through all those rounds and spending their most valuable resource to do so - time. Why shouldn't they be compensated
by philipodonnell 9y ago
Employees are continuing to put in effort through all those rounds and spending their most valuable resource to do so - time. Why shouldn't they be compensated with equity when there is a round so they keep their same share for putting in the same amount of work?
- austenallred 9y agoThey are, it’s called vesting. You don’t get the equity in one lump sum up front, you get it over time.
- philipodonnell 9y agoNot the same. If you got new stock grants in each round and they all vested on that schedule extending farther and farther in the future, then yes, you are correct. But to say that 'you should take a reduced salary because you get this awesome stock grant that vests over four years' then for four years say 'you should stay at this lower salary as you are diluted because we are giving you stock every year' followed after four years by 'you got your stock and that's it so keep working at the lower salary and your now diluted worthless stock' is not the same at all.
- nostrademons 9y agoGood startups (and big tech companies) give employees refresh grants - if they continue to be a good performer, they get follow-on equity grants to replace the ones that have vested, and if they're a really good performer, the refresh grants are often significantly larger than the original hire grant.