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Equity equation... You should give them a vested share amount equal in proportion to the amount of value you feel they will add to the company. This is usuall

by brk 18y ago

Equity equation... You should give them a vested share amount equal in proportion to the amount of value you feel they will add to the company. This is usually a variable range (and it varies), but something along the lines of: Every new developer adds .25% of value to the company minimum. Higher caliber people in the same position will add .35% of value. So your equity range, per developer, will be .25%-.35% (in this example).

banned_man 18y ago
At what stage? For a pre-money or single-digit employee, 0.35% is extremely small. For a company that has 50 developers and is about to IPO, it's a lot.
- brk 18y ago
  For every stage. Give stock in compensation for calculated value add. As you move through stages/growth, the value-add of each new employee will (should!) diminish if you're doing everything else right. .35% was my example, based on rough memory of a prior startup. Your mileage may vary. Void where prohibited by law..
byrneseyeview 18y ago
Pretty sure that your answer should adjust for whether it's employee #4 or employee #20,004.
- abstractbill 18y ago
  It already does. Employee #4 adds a lot more value to the company than employee #20,004.
- far33d 18y ago
  You could make the case that this is already embedded in the equation - a great employee #4 would add way more value than an equally great employee #35, since they will have more influence over the direction, will write a higher percentage of the total code, etc.