3 ms·
The author doesn't provide any reason why this should be done. I'm going to assume it's some sort of ideological and moral (under some ethical frameworks that a
by friedman23 7y ago
The author doesn't provide any reason why this should be done. I'm going to assume it's some sort of ideological and moral (under some ethical frameworks that are not widely used) justification.
The employee shortage that currently exists has not reached the point where people could make demands like this.
>Say you’re a solo founder. You’ve worked full-time on your company for a year (4 quarters). You hire your first full-time employee after 1 year (4 quarters). After their first 3 months (1 quarter), you own 83% (5 quarters / (5 quarters + 1 quarter)) of the company, and the employee owns 16% (1 quarter / (5 quarters + 1 quarter)).
This completely ignores risk. let's say I've launched a startup on my own and after 1 year of work I am now hiring employee number 1. Presumably if I'm hiring anyone I've found some product market fit. So why does employee number 1, who is presumably earning a salary (something that the founder was not doing) and is joining a startup that is somewhat proven, deserve an amount of equity proportional to the time they have spent in the company?
It also ignores the motivation for many to start their own business. The obvious one is to be rich, another is for control and independence. Why would someone seeking these things give up such a large amount of equity?
If you want 16% equity in a company that you have not founded on your own, you need to either have been part of the team from the start (when the idea was not proven, and thus have taken the same risk as the founders) or you need to bring something that is transformational for the company to the table (sales, management, connections, technical knowledge).
- sokoloff 7y agoThe only way employee #1 gets hired under such a system is if they can increase the value of the company by more than 20% in 3 months. That's unlikely to be the case (barring a company that is on the brink of failing).