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Ask HN: Other than cash, how do you compensate employees in your startup?
Our company (bootstrapped) has grown very quickly in the past few months. As we contemplate our next moves, we need to decide between investing in hard assets (machinery, IP) and paying employees for project-based work related to the development of these assets. These assets will provide us with a protected competitive position in our industry. We aren't really looking for outside investors, and an exit down the road is highly unlikely, so equity compensation for employees isn't ideal. What other forms of employee compensation have founders on here used? Ideally, some sort of rolling-debt instrument would fit our needs, but everything I've read online says that's a bad idea (and possibly illegal). Does anyone have any other suggestions?
- mchannon 13y agoStock options and warrants can be useful, though if done poorly they can muddy up your prospects for later rounds of financing in case you change your mind about investors. Not ideal, but cheap. Perks like telecommuting, flexible schedules, and PTO are often very underused by companies, and they have no direct costs to your bottom line (indirect costs can be massive if done wrong). Offering better-than-industry perks like these go a long way to decrease turnover, and can be as or more effective as pay increases. Sometimes you can defer salaries, but outright bonuses give you some wiggle room in case of a future downturn. Depending on the nature of your startup (is most of it software?) you'll also get far more motivated and loyal employees per dollar spent by locating your offices outside of the startup capitals.