Startup Equity is worthless; issue it anyways.
|BUGGER OAF||Sep 14, 2019|
Why issue Equity in a Startup?
It is essentially an option + lottery ticket in one.
There was a time when Startups were a *FAR* more appealing place to work than old stiff buttoned up places like IBM, Oracle, Microsoft, SIEBEL, INTEL, SUN Microsystems, and other dinosaur companies.
Startups offered low cash, lousy work environments, long hours but you could work on new, cutting edge geeky / nerdy fringe projects and hang out with the other geeks.
And every ONCE in a while, Startups did GREAT things and achieve OUTSTANDING outcomes. And they were able to make a difference. They made employees rich. And they changed lives.
You created an impact, worked with great people, experienced rocket ship growth in a startup, did your greatest work and built a world-class network of people in the process.
But not any more. The geeks are now the institutions.
Apple, Amazon, Facebook, Google, Netflix, and even Microsoft have re-invented themselves as cool, hip places to work and offer the brightest minds a world-class innovation atmosphere. And they have the cash to pay top dollar.
Public tech companies make it easy for you to earn stock, sell stock in a public liquid market, hold it for the future and pay taxes on gains like anyone else.
Couple this with the fact that public tech companies issue RSUs (Restricted Stock Units) — which means that the company bears the cost of the stock compensation.. Not you. This is significant for many reasons.