Equity should be distributed carefully to incentivize employees and ensure strong ownership of the company.

• 💰
  00:00

  Early employees should get more equity than those joining later.
• 🤔
  00:37

  Two reasons exist for this.
• 💰
  00:40

  Startups should set aside 10-20% of their equity to incentivize employees, with earlier employees receiving more equity than later ones.
• 💰
  01:30

  Equity pool should be between 10-20%, which will quickly be used to hire people.
• 🤔
  01:48

  Before distributing equity, consider how many people you need to bring in, who they are, and how much equity you will use to compensate them.
• 💰
  02:22

  An engineer typically receives between 0.5-3% equity in a Silicon Valley startup.
• 🤔
  02:40

  Considerations for setting a range include cost, quality, and availability.
• 💰
  02:45

  Consider employee preference when compensating with salary or equity to ensure strong ownership of the company and increase chances of success.

  • Equity can be used as a tool to increase the chances of a startup's success, but consider the employee's preference for salary or equity when compensating them.
  • Ensure early employees have strong ownership of the company to ensure success.