

how much stock (options) should I give to new employees/partners - cornos

I have a startup company that is fully privately funded. I am now in the process of involving more (technical) people. I want them to take risk (and reward) so that they will get heavily involved en get enthousiastic. Can you give me some pointers (to documentation) on what I should think of (how to come up with a reasonable offer, do's and don'ts etcetera).
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dgabriel
Having had several jobs where stock options were a motivator, I have a little
advice to offer:

Stock options are not a replacement for a competitive salary, unless the
technical people are given substantial ownership. So, for example, 1% of a
company that could realistically reach a valuation of 2 million dollars is not
enough. The risk is only worth it if the payoff will make up for and exceed
any salary trade offs.

Be clear and realistic about the numbers. Don't exaggerate, please please
please.

Options can make good bonuses, but only if the company is perceived as doing
well. If your employees don't feel connected to the company, they'll scoff and
become actively de-motivated.

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dkokelley
<http://paulgraham.com/equity.html>

What PG writes here is a pretty good explanation of how equity should work and
he even gives an example of a situation where a hypothetical startup wants to
hire a good hacker and trade equity for him.

