

Ask HN: How much equity do you give to employees? - dmytton

When working out employee share scheme, how much equity should be given to each employee? How is this best calculated in proportion to the overall available share capital, founders capital, etc.
======
sivers
From the book "How to Get Rich" - by Felix Dennis (worth about $1 billion):

"To become rich, you must be an owner, and you must try to own it all. You
must strive with every fiber of your being, while recognizing the idiocy of
your behavior, to own and retain control of as near to 100% of any company as
you can."

"Never never never hand over a single share of anything you've created or
acquired, if you can help it. Nothing. Not one share, to no one, no matter
what the reason, unless you genuinely have to."

"Ownership is the only thing that counts."

~~~
corysama
Despite his wealth, Felix Dennis is a very depressed and depressing person. In
an extensive interview that I watched, he stressed repeatedly that a major
motivating factor behind writing his book was to convince those who think they
want to imitate him that they would hate themselves if they actually went
through with it.

------
brk
Equity equation...

You should give them a vested share amount equal in proportion to the amount
of value you feel they will add to the company. This is usually a variable
range (and it varies), but something along the lines of: Every new developer
adds .25% of value to the company minimum. Higher caliber people in the same
position will add .35% of value. So your equity range, per developer, will be
.25%-.35% (in this example).

~~~
byrneseyeview
Pretty sure that your answer should adjust for whether it's employee #4 or
employee #20,004.

~~~
abstractbill
It already does. Employee #4 adds a lot more value to the company than
employee #20,004.

------
wensing
Have you seen <http://news.ycombinator.com/item?id=35015> and PG's article? I
found it helpful, YMMV.

------
nagoff
My understanding is that funders will expect to see an option pool for
employees of around 10-15%.

~~~
nolanbrown23
I concur. Employee option pools should be 10-15%. This seems to be pretty
standard, especially when taking investment money.

------
coopr
Are you giving equity in place of some portion of a "market" salary, or are
you giving equity in addition to a fair salary? This (should) make a big
difference in how you calculate how much to give.

And of course, all equity should be vested, with little or none granted up
front. Virtually no employee adds value the day they arrive, thus they should
not have any stake in the company at that point.

