Founder equity · Compensation

Equity Splits vs. Cash Compensation?

rakesh balakrishnan Lead Quality Assurance Engineer | actively seeking new Test Lead position

October 20th, 2016

How do you compensate co-founders or early joined employees? This is a tough one, especially if you have no money and your startup is worth nothing or not yet on the map. This is of course, one way of showing your partners or employees how much you value them. What is the better or smarter way to compensate them? It is also interesting to look at this topic from another angle? What would you, as a co-founder or an employee agree to?
More than 65% of new companies fail because they lack funding. In this course, you’ll learn common fundraising mistakes, how to nail an elevator pitch, how to craft a killer pitch deck, where to source investments from, and all about term sheets and convertible notes.

Anonymous

October 20th, 2016

The real danger in any startup is having "key" people leave because they are not being "appreciated". I've seen a few companies just collapse because they lost a lead developer and designer after ignoring their interest.

You want to ask yourself "what would make me want to stay with this company", "what would make me happy to be working here". I've found 9 times out of 10, if you do that, you'll find a good way to compensate everyone for their efforts.

Hambirrao Patil

October 20th, 2016

Hello @Rakesh, Founders invested for long term. They don't be in hurry to get from startup. Because startup is the idea that need natured. About the employees be a specific. You must have to start to pay them may besmall compensationafter at least few months on a performance basis. Step by step as startup grow increase compensation.

If I am the co-founder certainly I will not ask compensation until observers silence. If observers speak I can ask about compensation.

If I am employee I am definitely ask for compensation.

Thank You!

Dane Madsen Organizational and Operational Strategy Consultant

October 20th, 2016

A very broad subject. Critical is that what ever you do in a "if this then that" is to document why and what the deal really is. I have had to clean up too many "handshake" deals for clients. It gets ugly. Dane Madsen Dane@DaneMadsen.com 206.900.5852 Mobile Sent from my mobile device. Forgive typographical and grammatical errors.