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CMV: All employees should be given equity in the company they work for.
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I believe that all companies, no matter the size, should provide each of their employees with some percentage of equity, scaling with your role - the more senior you are, the more equity you receive.
In return for what?
I start a company. I own it outright. I put all profits back in. Now I hire four employees (a basic bookkeeper, an asst., a gopher, someone else) and I have to dilute my ownership and not only pay them but give them equity?
Even if it's 1% -- I have 10 employees, they own 10% of my company, and any fundraising I do I'm offering less and diluting my share more.
Also, do they have this in perpetuity? The 22-year-old who worked as a jr. assistant for 3 months before they went back to school owns 1% in my company and the person I hire to replace them ALSO gets 1%??
What happens if I need 50 employees bc my company is, say, a bakery so I need bakers, floor workers, bookkeeper, etc., truck driver, cleaner, delivery people. Suddenly upon opening I only own 50%?
You don’t have to provide 1% which is a pretty large amount, you could provide 0.1%, or lower. It will just be another competitive edge in recruiting, and employees will go where they feel most valued.
It will just be another competitive edge in recruiting, and employees will go where they feel most valued.
And, as I said in another comment, if Company A offers $59,500 + worthless equity; and Company B offers $60,000, Company B has the competitive edge in recruiting.
You don’t have to provide 1% which is a pretty large amount, you could provide 0.1%, or lower. It will just be another competitive edge in recruiting, and employees will go where they feel most valued.
Same problem applies, just at lower levels.
And then it'll be a race to the bottom where someone desperate and clueless offers 5% and then they go out of business, so you have 5% of nothing, but then....