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> Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity.
by hkarthik 12y ago
> Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity. Take out the middle man.
That's been tried a lot and is often referred to as "sweat equity". Most people won't go for it when there's 5 jobs across the street that will offer cold hard cash which they have obtained by getting a premium on equity with a VC.
- dropit_sphere 12y agoIf, as a founder, you don't have the capital to execute your vision, it falls on you to convince people that it will be profitable for them to trade real resources for as-yet-valueless equity. Developers will take equity if they think it's worth something. I don't understand why the natural response to "can't afford good developers" is "pay them less." Maybe the company just deserves to die. Founders' fundraising problems are...not my problem.
- sheepmullet 12y ago"That's been tried a lot and is often referred to as "sweat equity". Most people won't go for it when there's 5 jobs across the street that will offer cold hard cash which they have obtained by getting a premium on equity with a VC." How many startups offer the first few employees a reasonable amount of equity (>5%)? Most startups will offer 1% if you are lucky.