Re:A Good Way to Grant Equity to Your Employees
by Tenhundfeld on Wednesday November 02, 2016 @04:26PM
(#12858911)
I'm an engineer. I'm not saying only sales people should be rewarded. I agree that is asinine.
This is what I'm saying:
If a founder builds a business over many months and then hires an employee who can take over 20% of the founder's current workload, that does not mean the employee deserves 20% of the company, IMO. It does not mean that employee is "delivering 20% of the revenue." It merely means the employee is doing 20% of the founder's current work.
Equating percent of current work to percent of equity completely disregards the risks and effort involved in building a sustainable business. Developers tend to overvalue the software assets and undervalue the business relationships and other revenue-producing activities.
Hence my question about how the OP is arriving at their figure.
This is what I'm saying: If a founder builds a business over many months and then hires an employee who can take over 20% of the founder's current workload, that does not mean the employee deserves 20% of the company, IMO. It does not mean that employee is "delivering 20% of the revenue." It merely means the employee is doing 20% of the founder's current work.
Equating percent of current work to percent of equity completely disregards the risks and effort involved in building a sustainable business. Developers tend to overvalue the software assets and undervalue the business relationships and other revenue-producing activities.
Hence my question about how the OP is arriving at their figure.