4 ms·
"If someone performs and earns their grant over four years, they are likely to increase the value of the company far more than the 1% or whatever you give them.
by rgarcia 13y ago
"If someone performs and earns their grant over four years, they are likely to increase the value of the company far more than the 1% or whatever you give them."
This argument seems flawed. If I think someone is going to double the value of my company, should I be comfortable giving them up to 100% equity? Put another way: percentage growth of your company from an early stage to some point in the future most often exceeds 100%.
- chime 13y agoYou need to add a factor for risk in there. If there is a 10% chance that they will double the value of your company, you can give them 5%. If there is a 100% chance that they will double the value of your company, you can give them 50% and make them a co-founder. Think in terms of marginal utility. Keep giving equity until it no longer raises your expected value.
- lincolnq 13y agoNo, the math is slightly different (sama was approximating). http://paulgraham.com/equity.html http://paulgraham.com/equity.html