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Hackers with no equity in company: good or bad?

news.ycombinator.com

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Re: Hackers with no equity in company: good or bad?

#11

Post by prime0196 »

pg wrote: post #8
prime0196 wrote: post #5

Earlier quoted context omitted.

What would be the reason for "throwing" them an equity stake? Many people believe this makes a person more dedicated to the company, which is absolutely false.

Then why do you think startups have such a thing as options? Do you think everyone else is just mistaken in believing that equity matters in startups?

Equity should be given to individuals who are critical to the success of your company, individuals who are indispensable. Too many companies give equity to individuals who can be replaced once the company becomes self-sustaining. Equity shouldn't be given to "good" coders just because they contributed in the beginning. Equity should be saved for the "great/exceptional" coders that you may attract as your business grows.

Re: Hackers with no equity in company: good or bad?

#12

Post by pg »

prime0196 wrote: post #11
pg wrote: post #8

Earlier quoted context omitted.

Then why do you think startups have such a thing as options? Do you think everyone else is just mistaken in believing that equity matters in startups?

Equity should be given to individuals who are critical to the success of your company, individuals who are indispensable. Too many companies give equity to individuals who can be replaced once the company becomes self-sustaining. Equity shouldn't be given to "good" coders just because they contributed in the beginning. Equity should be saved for the "great/exceptional" coders that you may attract as your business gro…

The empirical evidence suggests startups don't work that way. All the most successful startups had great techical people from the beginning. If you don't have good technical people at the start, you never reach the point where you attract them.

Re: Hackers with no equity in company: good or bad?

#13

Post by far33d »

prime0196 wrote: post #11
pg wrote: post #8

Earlier quoted context omitted.

Then why do you think startups have such a thing as options? Do you think everyone else is just mistaken in believing that equity matters in startups?

Equity should be given to individuals who are critical to the success of your company, individuals who are indispensable. Too many companies give equity to individuals who can be replaced once the company becomes self-sustaining. Equity shouldn't be given to "good" coders just because they contributed in the beginning. Equity should be saved for the "great/exceptional" coders that you may attract as your business gro…

You don't think a founding coder is indispensable to your company? Are you saying that if this person decided, one week from launch, to quit, it wouldn't matter? If so, why have them on the team at all?

Re: Hackers with no equity in company: good or bad?

#14

Post by prime0196 »

pg wrote: post #12
prime0196 wrote: post #11

Earlier quoted context omitted.

Equity should be given to individuals who are critical to the success of your company, individuals who are indispensable. Too many companies give equity to individuals who can be replaced once the company becomes self-sustaining. Equity shouldn't be given to "good" coders just because they contributed in the beginning. Equity should be saved for the "great/exceptional" coders that you may attract as your business gro…

The empirical evidence suggests startups don't work that way. All the most successful startups had great techical people from the beginning. If you don't have good technical people at the start, you never reach the point where you attract them.

I don't dispute that. What if you have great technical people in the beginning who happen to have no equity stake? A talented developer is a talented developer (regardless of how they are compensated)...equity doesn't make them any better, does it?

Re: Hackers with no equity in company: good or bad?

#15

Post by gscott »

prime0196 wrote: post #5
rms wrote: post #4

Would it hurt to throw them a couple percent?

What would be the reason for "throwing" them an equity stake? Many people believe this makes a person more dedicated to the company, which is absolutely false.

If you are paying someone to work an 8 hour day, no problem just paying the programmer.

But if you want someone to work a practically unlimited number of hours as is most often the case then you are going to either need to pay the person to work two 8 hour shifts, hire additional programers, or give the programmer some equity in the business.

Re: Hackers with no equity in company: good or bad?

#16

Post by pg »

prime0196 wrote: post #14
pg wrote: post #12

Earlier quoted context omitted.

The empirical evidence suggests startups don't work that way. All the most successful startups had great techical people from the beginning. If you don't have good technical people at the start, you never reach the point where you attract them.

I don't dispute that. What if you have great technical people in the beginning who happen to have no equity stake? A talented developer is a talented developer (regardless of how they are compensated)...equity doesn't make them any better, does it?

If they're de facto cofounders and they have no equity, then either you're cheating them (and they don't know they should have equity) or they don't have much faith in the project (and prefer salary to equity).

Re: Hackers with no equity in company: good or bad?

#17

Post by anamax »

I trust that you're not going to complain if they quit your project for a project that does offer them equity.

FWIW, no one is indespensible in a startup; some are merely harder to replace than others. I'll bet that "original idea" guys are getting equity even though they cease to be indespensible.

Re: Hackers with no equity in company: good or bad?

#19

Post by prime0196 »

gscott wrote: post #15
prime0196 wrote: post #5

Earlier quoted context omitted.

What would be the reason for "throwing" them an equity stake? Many people believe this makes a person more dedicated to the company, which is absolutely false.

If you are paying someone to work an 8 hour day, no problem just paying the programmer. But if you want someone to work a practically unlimited number of hours as is most often the case then you are going to either need to pay the person to work two 8 hour shifts, hire additional programers, or give the programmer some equity in the business.

They are paid based on a milestone. Milestone is spec'd out and they are paid based on attaining that goal. So technically I do get unlimited hours.

Re: Hackers with no equity in company: good or bad?

#20

Post by prime0196 »

far33d wrote: post #13
prime0196 wrote: post #11

Earlier quoted context omitted.

Equity should be given to individuals who are critical to the success of your company, individuals who are indispensable. Too many companies give equity to individuals who can be replaced once the company becomes self-sustaining. Equity shouldn't be given to "good" coders just because they contributed in the beginning. Equity should be saved for the "great/exceptional" coders that you may attract as your business gro…

You don't think a founding coder is indispensable to your company? Are you saying that if this person decided, one week from launch, to quit, it wouldn't matter? If so, why have them on the team at all?

Web applications are a lot easier to develop. I think too many people are still applying methodologies that applied to more "traditional" forms of software development. If I have a good JavaScript hacker bail on me a week before launch, I don't think it would be extremely difficult to find another good JavaScript hacker.
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