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Founders: Would you agree that team should own a part of a company?
If this is a common practice for you. Could you share how are currently achieving this?
- nthngtshr 4y agoStock Options?
- 54bg45b45b 4y agoStock Options != key equity ownership. Neither does employee equity, because the key word there is "key". If you get hired at Amazon, you get stock options after your vest is done. This does not mean you have any real impact at all on company decisions. The idea of employees owning the company is Marxism 101. No fucking way any founders in this economic system will be for it
- bobolino123 4y agoNope and this is a big reason to avoid someone else's startup.
- steponlego 4y agoSome companies have this model, others don't. The key is the word "should," it totally depends on what the owners want. One of the nice things about America is that it's very easy to start a company. Intel started when "team" left Fairchild.
- dieselgate 4y agoCooperative business models do exist but it does not seem common at all for VC backed startups.
- ultrarunner 4y agoOwnership can mean many things, including monetary ownership, passive stock, or part ownership in strategic direction. To the latter point, every team I've worked on that had a shared strategic vision was more productive, had higher morale, and was overall a more satisfying experience. I'm not sure anyone can quantify should in terms of compensation, but ownership of purpose and direction seems to fit.
- acgourley 4y agoExactly. I think people want to be treated like owners more than they want an obtuse legal status of being an owner. In other words, a seat at the table when strategic objectives are being defined is what will make them act like owners, not a RSPA document.
- HWR_14 4y agoI think people join startups for a chance at getting fuck you money, and offering "a seat at the table" but no equity is a non-starter.
- JohnFen 4y agoIt all depends on the people. I know lots of people who prefer working for startups not because they're looking to get rich, but because the startup is doing something new that particularly excites them. And in my statups, I want that group of people, and actively don't want the ones who are just looking for a big payday.
- paxys 4y agoYou need to explain the question further. Should employees have some equity in the company? Of course. That’s the single biggest driving force behind the growth of the tech sector over the last few decades. It’s pretty hard for employees - especially at startups - to be fully bought in if they are getting a paycheck and nothing else. Should every tech company be some kind of cooperative? That’s a harder one to answer, but this model hasn’t really been proven in the real world so until that happens it’s safe to say no, that won’t work.
- quickthrower2 4y agoIf I have a 1% stake in the company via an option and there are lots of ways you can get screwed out of making any money from it, then I am not going to act much different to an employee without it. If the founder becomes mega rich, I might if lucky get a paid off apartment in 15 year’s time.
- deleted 4y ago[deleted]
- pphysch 4y agoPerhaps you are interested in the "Mittelstand" model? It is hard to execute in America though, our business culture doesn't really align with it in recent decades. But that is probably changing. https://en.wikipedia.org/wiki/Mittelstand https://en.wikipedia.org/wiki/Mittelstand
- gumby 4y agoI heard Germany recently legalized stock options. Is this true?
- JohnFen 4y agoI don't think there's a blanket answer to this. In some cases, I could see some measure of employee ownership being a good thing. In others, I could see the opposite. In my ventures, I've never done that sort of this because the complexity of it is a headache I could do without, and I've not seen a good argument for why it would benefit my companies or employees enough to be worth the cost. But that's very dependent on the particular venture, I think. I could see it penciling out very differently in other situations.
- gumby 4y agoI assume you mean giving employees equity in the company, and early stage employees meaningful amounts. I have always done this and cannot imagine not doing so.
- nashashmi 4y agoFew people are that committed to a company to be real owners.
- aristofun 4y agoIf a team created the company then why don’t they own it already? If a team didn’t create it, then why should they own over the team that actually created it? It here == whole company or any substantial part of it.
- vivegi 4y agoShares in the company are about control. Founder teams (ie., founder/co-founders) should decide early on about how much control each cofounder is going to retain through their ownership -- this is anyway part of forming the founding team based on the skills and capital they bring to the table. When it comes to expanding the team with key employees outside of the founding team, giving them equity share is a decision that the founding team needs to make. A policy decision could be x% of the shares will be dedicated to key employees equity participation. Also, key employees doesn't have to be all employees. You can segment this by role, service duration etc., For eg: an entry level role may not be eligible, but may become eligible after x months of service in the company. There are opposing philosophies to the above. But most use some form of probation period to make employees eligible for participation. Edit: Also, typically the equity is granted through options vesting. So, it is part of deferred compensation over a vesting period that runs over several years. It is also tied to differentiated performance-based pay.
- seattle_spring 4y agoDo you mean actual ownership via stock? If so then I can speak for all founders: NO. I say this based on the absolutely shit percentage of stock with terrible terms that are offered to all employees.
- alxmng 4y agoI've always wondered, could dollars be matched to equity? Imagine a company with three employees earning $100, $200, and $300 per year. Each year the company issues them 100, 200, and 300 shares. Has anyone done this?
- bruce511 4y agoYour question will get lots of different answers, because you've phrased it in an ambiguous way, with no context. This suggests to me, that in your specific case, the answer is no. For example, "company" could mean private or public. It could be 5 people or 150000 people. "own" can refer to control, responsibilities, legislation, profit share, product direction, market fit, investment of cash, and more. "team" might be everyone from the lead who's been there from the beginning, to the receptionist hired last week. Or some subset. Context matters. The goal of ownership matters. Each context is different so there's no blanket answer. Hence my answer to your (incomplete) answer is no. I post this reply, not to be a dick, but to point out that your question needs a lot more thought and clarity. From that I infer (perhaps incorrectly) that you are the team-member in this context, not an existing owner. I think you have a valid, specific, question in there somewhere, but you need to narrow it down a bit. And perhaps also figure out if team ownership will actually solve the problem you are trying to solve.
- iamflimflam1 4y agoThe workers should own the means of production?
- danieka 4y agoYou have nothing to lose but your chains. But seriously, it's an interesting question and I got some interesting answers when I asked something similar last week. https://news.ycombinator.com/item?id=34945428 https://news.ycombinator.com/item?id=34945428
- uptownfunk 4y agoNo, RSU has largely become a an accounting scheme to inflate adjusted EBITDA.