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The reason equity grants are so popular at startups is because they work. When employees own a physical piece of the work they are creating, and when they have
by dcurtis 18y ago
The reason equity grants are so popular at startups is because they work. When employees own a physical piece of the work they are creating, and when they have a definite vested interest in making things to the best of their ability, you (as the founder) get a good culture and hardworking people. That ends up increasing the value your own equity in the company.
Without equity grants, you have to give employees monetary incentives. Those are usually capped and generally don't have much upside. They're also almost impossible to calculate on a single-person basis. Equity has essentially an unlimited upside and its worth is easily measured.
Why don't you give your employees equity?
- mst 18y agoNo dividend. Not intended to be sold. The company is held only by the founders so we can control its progress and ensure it becomes the company we envisaged. Our employees believe in that dream. Since there's no monetary value to having equity, they don't care that they don't have any. They do, however, make more than I do. As for "well give it out anyway, they could always sell it" I refer to the point of "becomes the company we envisaged" and what happened to craigslist. I never said our model was common. I never said it was wise for the majority of companies, or even viable. But it -does- work for us.