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If it costs you 10% of your company to attract a top engineer, and it's not worth that much to you, you're going to make do with less than the top engineers. A
by hapless 12y ago
If it costs you 10% of your company to attract a top engineer, and it's not worth that much to you, you're going to make do with less than the top engineers. At best, you will be recruiting people not smart enough to ask important questions about equity.
Fred Wilson seems to be suggesting that founders should indeed hire second-rate candidates if it means they get to keep more of the pie. Maybe he's right.
- deleted 12y ago[deleted]
- kenjackson 12y agoIt doesn't reduce the amount available to investors. It just factors into the valuation. And then dilution happens across the board (generally). So after taking a few rounds the founders have less of the company than if they had given less to the employee. Likewise, the founder will have less of the company if they give more to the VC. The question for Fred is if an employee is $1m and your cash is worth $1m -- should they both get the same valuation with respect to equity?