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Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders vs. Early Employees To help with this discussion, let me start with a definition of "early employee." I'll get to service providers in a later post. Which means n = (i - 1)/i.

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Startup Stock Options – Why A Good Deal Has Gone Bad

Steve Blank

VC’s have just changed the ~50-year old social contract with startup employees. For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options. The investors were giving away part of their ownership of the company — not just to the founders, but to all employees.

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Should Startups Focus on Profitability or Not?

Both Sides of the Table

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. ” If you’re not profitable you’re purely a cost center to them. Cost of Goods Sold (COGS) =. Operating Costs.

Startup 418
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5 Keys To Sustaining A Positive Attitude In Your Team

Startup Professionals Musings

In my experience as an employee, up to an executive, in large companies as well as small, I’ve found that people who are consistently negative and complain are a big constraint on productivity, as well as the most difficult management problem that most business leaders face. They may really want to change.

Employee 371
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Why Uber is The Revenge of the Founders

Steve Blank

To turn your company’s stock into cash, you engaged a top-notch investment bank (Morgan Stanley, Goldman Sachs) and/or their Silicon Valley compatriots (Hambrecht & Quist, Montgomery Securities, Robertson Stephens). The founders along with all the other employees would vest their stock over 4 years (earning 1/48 a month).

Founder 281
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Venture Capital Q&A Session

Both Sides of the Table

Mark Jeffrey - Q: “Is it more traditional to do your ESOP (employee stock option plan) before or after your angel or Series A funding?&# I talked about the need to have a restricted stock plan for your earliest employees. The downside is that people need to buy their stock. This is minutes 8-11.

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The Long-Term Value of Loyalty

Both Sides of the Table

Moving on … My second post was directed at employees. If you’ve done it for a long time then I usually advise hiring managers to hire you as contractors and not full-time employees. No employees wanted to join startups – they were all looking for stable jobs. It’s a subjective topic.