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

  • 💰
    Early employees should get more equity than those joining later.
  • 🤔
    Two reasons exist for this.
  • 💰
    Startups should set aside 10-20% of their equity to incentivize employees, with earlier employees receiving more equity than later ones.
  • 💰
    Equity pool should be between 10-20%, which will quickly be used to hire people.
  • 🤔
    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.
  • 💰
    An engineer typically receives between 0.5-3% equity in a Silicon Valley startup.
  • 🤔
    Considerations for setting a range include cost, quality, and availability.
  • 💰
    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.
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