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Founders: Would you agree that team should own a part of a company?

news.ycombinator.com

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Re: Founders: Would you agree that team should own a part of a company?

#11

Post by JohnFen »

I don't think there's a blanket answer to this. In some cases, I could see some measure of employee ownership being a good thing. In others, I could see the opposite.

In my ventures, I've never done that sort of this because the complexity of it is a headache I could do without, and I've not seen a good argument for why it would benefit my companies or employees enough to be worth the cost. But that's very dependent on the particular venture, I think. I could see it penciling out very differently in other situations.

Re: Founders: Would you agree that team should own a part of a company?

#12

Post by quickthrower2 »

paxys wrote: post #8

You need to explain the question further. Should employees have some equity in the company? Of course. That’s the single biggest driving force behind the growth of the tech sector over the last few decades. It’s pretty hard for employees - especially at startups - to be fully bought in if they are getting a paycheck and nothing else. Should every tech company be some kind of cooperative? That’s a harder one to answer…

If I have a 1% stake in the company via an option and there are lots of ways you can get screwed out of making any money from it, then I am not going to act much different to an employee without it. If the founder becomes mega rich, I might if lucky get a paid off apartment in 15 year’s time.

Re: Founders: Would you agree that team should own a part of a company?

#13

Post by gumby »

pphysch wrote: post #9

Perhaps you are interested in the "Mittelstand" model? It is hard to execute in America though, our business culture doesn't really align with it in recent decades. But that is probably changing. https://en.wikipedia.org/wiki/Mittelstand

I heard Germany recently legalized stock options. Is this true?

Re: Founders: Would you agree that team should own a part of a company?

#15

Post by HWR_14 »

acgourley wrote: post #10
ultrarunner wrote: post #7

Ownership can mean many things, including monetary ownership, passive stock, or part ownership in strategic direction. To the latter point, every team I've worked on that had a shared strategic vision was more productive, had higher morale, and was overall a more satisfying experience. I'm not sure anyone can quantify should in terms of compensation, but ownership of purpose and direction seems to fit.

Exactly. I think people want to be treated like owners more than they want an obtuse legal status of being an owner. In other words, a seat at the table when strategic objectives are being defined is what will make them act like owners, not a RSPA document.

I think people join startups for a chance at getting fuck you money, and offering "a seat at the table" but no equity is a non-starter.

Re: Founders: Would you agree that team should own a part of a company?

#16

Post by [deleted] »

quickthrower2 wrote: post #12
paxys wrote: post #8

You need to explain the question further. Should employees have some equity in the company? Of course. That’s the single biggest driving force behind the growth of the tech sector over the last few decades. It’s pretty hard for employees - especially at startups - to be fully bought in if they are getting a paycheck and nothing else. Should every tech company be some kind of cooperative? That’s a harder one to answer…

If I have a 1% stake in the company via an option and there are lots of ways you can get screwed out of making any money from it, then I am not going to act much different to an employee without it. If the founder becomes mega rich, I might if lucky get a paid off apartment in 15 year’s time.

[deleted]

Re: Founders: Would you agree that team should own a part of a company?

#17

Post by JohnFen »

HWR_14 wrote: post #15
acgourley wrote: post #10

Earlier quoted context omitted.

Exactly. I think people want to be treated like owners more than they want an obtuse legal status of being an owner. In other words, a seat at the table when strategic objectives are being defined is what will make them act like owners, not a RSPA document.

I think people join startups for a chance at getting fuck you money, and offering "a seat at the table" but no equity is a non-starter.

It all depends on the people. I know lots of people who prefer working for startups not because they're looking to get rich, but because the startup is doing something new that particularly excites them.

And in my statups, I want that group of people, and actively don't want the ones who are just looking for a big payday.

Re: Founders: Would you agree that team should own a part of a company?

#19

Post by jvalencia »

JohnFen wrote: post #17
HWR_14 wrote: post #15

Earlier quoted context omitted.

I think people join startups for a chance at getting fuck you money, and offering "a seat at the table" but no equity is a non-starter.

It all depends on the people. I know lots of people who prefer working for startups not because they're looking to get rich, but because the startup is doing something new that particularly excites them. And in my statups, I want that group of people, and actively don't want the ones who are just looking for a big payday.

Early day startups generally have high risk, the options are the high yield to compensate for that risk

Re: Founders: Would you agree that team should own a part of a company?

#20

Post by JohnFen »

jvalencia wrote: post #19
JohnFen wrote: post #17

Earlier quoted context omitted.

It all depends on the people. I know lots of people who prefer working for startups not because they're looking to get rich, but because the startup is doing something new that particularly excites them. And in my statups, I want that group of people, and actively don't want the ones who are just looking for a big payday.

Early day startups generally have high risk, the options are the high yield to compensate for that risk

Right, but that's a bit different intent than looking to get rich.
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