WTF does that mean? It means there is only upside for Entrepreneurs!
Not sure what the best title is but after looking at equity breakdowns, the founders of companies win. Yes, bring out the first 500 employees at Google, early Microsoft and other large companies. I call them edge cases. I am talking about people that are new college hires. If you graduate college here are a few basic options:
large blue chip – .001% equity, $50,000 salary. The company is proven, you take no risk and you have no upside. Enjoy going to your kids soccer practice at 5pm.
early start up – .1% equity, $65,000 if funded. The company needs to get to $1 billion just for you to make a million. Also, you have 4 years to wait for vesting. Work your ass off and your CEO (plus a few early employees) gets the pay day on exit.
your own company – 100% equity, $0 salary. Now if you believe in yourself you really don’t need to grow your company that much to make it worthwhile. Hire a few people. Shoot you still have 40%. Now you are making your money/equity work for you.
Bottom Line: It comes down to what you want to do in your life. Basically, at startups the employees are just working to make their CEO’s equity more valuable while they get a penance. I am not discounting self-fulfillment, work-life balance & some benefits of working for someone else, just strictly pointing out the financial.
Which position do you prefer, “top or bottom” ?