

Ask HN: What would you do? - ownershipopp

If you were given the choice of having:<p>A. 10% ownership<p>or<p>B. 10% profit, increasing to 20% over the next 8 years and a clause for the same % if the company is sold.<p>What would you choose?<p>Both options would be an officer position in the company.
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mdolon
I think it depends on a few factors, namely:

\- The likelihood of the company selling (consider both near or long term) or
going public

\- The difference between 10% profit and the salary you would make with 10%
ownership

\- How likely profit is to increase compared to the likelihood of the company
selling

In other words, it totally depends on the company and the situation. A web
design company will probably never get acquired or go public, and so ownership
doesn't mean much, whereas if you're working on something that interests
Google or Facebook, the chances of acquisition (and the value of ownership)
increase exponentially. Then again, my reasoning is based purely on monetary
gain - you should probably consider the impact of ownership on the company and
your personal life/career as well.

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ownershipopp
Let me add some more information which is relevant. I have been with a company
for 6 years now out of 8 years in business. We have grown from a bootstrapped
operation running out of a garage to a company with a solid customer base and
re-occurring revenue. We have no debt and are profitable. I didn’t start the
company, only helped build it, so the owner is offering me options because of
the value I bring. I see benefits for both options. I wanted to hear some
other opinions.

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anigbrowl
In that case, own the 10%.

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zafka
I would think that option A would be far more likely to be worth more. I can
imagine that the company could increase greatly in value before turning a
profit.

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anigbrowl
Assuming there is profit or at least value to begin with: Profit sounds
better...but only if you never want to leave or cash out for a lump sum. If
you can see anything in life that os attractive beyond this company, and you
think it might be nice to have income coming in without direct effort while
you pursue this Other Thing, then take the stock. You can always vote yourself
more pay later if you own 10% of the equity.

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damoncali
I don't understand. 10% ownership implies 10% of the profit and 10% of the
sale. Why would A ever be better? All I can think of is capital gains tax.

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ownershipopp
The main thing I can think of is that if I was 10% owner, and wanted to leave
the company, it would have greater value than option B.

