Attracting and compensating operating partners
This week, we discuss what Rick can do to give his early employees a share of the upside without giving away equity
Takeaways from this episode:
- Rick isn't at a point where he needs to figure this out right now. He thought he might need to know this so he could start courting potential employees for the future, but he can do that without knowing the details of compensation.
- Compensation is a combination of salary, benefits, equity, and other perks. One way or another, you need to put a package together that is competitive. One reason a lot of startups give stock options is because they can't afford to pay a high salary.
- Companies that aren't planning on exiting might not want to give equity because it's not worth much without an exit.
- If you want to share upside with employees without giving equity, you can offer a profit share. There are different models, and you can structure yours to align with the goals and incentives you want to provide to employees.