4 ms·
Yes it is sort of odd that the status quo is to offer a sliding amount of equity (due to dilution). I'm not immediately sure why a fixed amount of shares, whos
by alexpetralia 8y ago
Yes it is sort of odd that the status quo is to offer a sliding amount of equity (due to dilution).
I'm not immediately sure why a fixed amount of shares, whose value simply increases over time, is not the status quo. The only trouble I can see with this is that shares are non-divisible, so you have to give out at least 1 share, even if it is priced at $10,000.
- pragmacoders 8y agoThe shares given to investors often have dilution protection and guarantees as to when the company can sell and what minimum compensation will be given to them if that happens. They also have protections such as "If the company dies, we will have first claim to any assets of the company" The reason this is not offered to employees is a combination of fear (if we're being generous) and lack of incentive (the employee often has little leverage and no legal representation to look over contracts). The end result being - if you have the capital, you have the leverage.