Ask HN: What's the best way to give early employees ownership?

[neuron9]

Question: What's the best way to give early employees ownership in a private tech company?

And by best, I mean best for the employees, not the company. There's options, RSU's, straight up equity (tax issues for receiver), and probably more...

With public companies, I get the value of issuing stock, because it has liquid value. But with private companies, without a definite IPO on the horizon, I'm truly interested at what talented engineers believe is the fairest instrument to share ownership/reward.

I own a private tech company that makes $30m rev, is profitable, and has big potential. We currently have no shared ownership and I want to roll out a plan that has real value for employees, not perceived hype.

Your thoughts/feedback would help me a ton!

[jpeg_hero]

For truly early companies I would recommend getting a 409a valuation. This value will be extremely low and have the employees buy the stock outright(or with a note from the company) and have an expiring repurchase agreement for the vesting part.

The fact that you are doing $30m in rev is a big hurdle to gettin a low valuation.

What are you trying to accomplish? Are you trying to transfer value to the few people that helped you get to $30m in rev or are you looking to incentivize current employees going forward?

[cimmanom]

Have you considered profit sharing instead of equity ownership?