Seth's Blog: Advice on equity • Hacker News Board

Re: Seth's Blog: Advice on equity

#41

Post by jbarciauskas » Thu, Mar 19, 2009, 7:12 PM UTC

abstractbill wrote: post #14

ivankirigin wrote: post #12

This doesn't sound like vesting, but a list of milestones to reach before granting the stock. That is a horrible idea.

Any list of milestones you draw up when you start a company is likely to contain things you mistakenly thought would be important, and omit things that turned out to actually be important. Doesn't sound very workable to me, agreed.

This is why I find corporate HR "goal-setting" to be such nonsense. You set a bunch of goals, but then you have real work that needs to get done, that is probably completely different from what you thought it would be. At the end of the quarter/half/year, you look back at your goals and say wow, I didn't accomplish any of that! But you were still productive, in completely unexpected ways. The future is funny like that.

Re: Seth's Blog: Advice on equity

#42

Post by tptacek » Thu, Mar 19, 2009, 7:16 PM UTC

run4yourlives wrote: post #40

tptacek wrote: post #39

Earlier quoted context omitted.

Because people who try to "solve" this issue up front always get it wrong, because there isn't enough information to make decisions like this.

Which is why I'm suggesting to split equally and get on with it as an alternative. (Admittedly this is going further than my experience allows)

I'm not saying Godin is right, only that you're ignoring his argument.

Re: Seth's Blog: Advice on equity

#43

Post by mrtron » Thu, Mar 19, 2009, 7:18 PM UTC

tptacek wrote: post #33

mrtron wrote: post #17

Earlier quoted context omitted.

It does sound like a bees nest of problems. I much prefer just splitting 50/50 and having both founders kick as much ass as possible. This does force you to be able to rely on your cofounder, but that is probably is a good idea (and unavoidable) anyways.

The bigger problem than unfairness is that if you split 50/50 between two founders, you're screwed when you want to bring a third person in to do partner-level work.

That would be a tough situation, with no great solution.

Am I wrong in thinking you either bring in people from then on as employees?

I can't picture bringing on a 3rd and giving them a full founder stake down the road, and the middle ground is very tough.

Re: Seth's Blog: Advice on equity

#44

Post by brk » Thu, Mar 19, 2009, 7:27 PM UTC

mrtron wrote: post #17

ivankirigin wrote: post #12

This doesn't sound like vesting, but a list of milestones to reach before granting the stock. That is a horrible idea.

It does sound like a bees nest of problems. I much prefer just splitting 50/50 and having both founders kick as much ass as possible. This does force you to be able to rely on your cofounder, but that is probably is a good idea (and unavoidable) anyways.

You mention that you "prefer" this. IMO, this can never work, but I'm curious how/where it's worked successfully for you that you prefer it.

What if you realize that you need to add more executive-level people or even just regular employees to the company, or raise money?

Re: Seth's Blog: Advice on equity

#45

Post by tptacek » Thu, Mar 19, 2009, 7:27 PM UTC

mrtron wrote: post #43

tptacek wrote: post #33

Earlier quoted context omitted.

The bigger problem than unfairness is that if you split 50/50 between two founders, you're screwed when you want to bring a third person in to do partner-level work.

That would be a tough situation, with no great solution. Am I wrong in thinking you either bring in people from then on as employees? I can't picture bringing on a 3rd and giving them a full founder stake down the road, and the middle ground is very tough.

Not allowing yourself to bring in key contributors in the future is an awfully big handicap to accept.

Allocating equity from a large pool, vesting and granting to the original founders as time goes on, and leaving a lot of headroom for future contributors seems like the right play.

Re: Seth's Blog: Advice on equity

#46

Post by mrtron » Thu, Mar 19, 2009, 10:12 PM UTC

tptacek wrote: post #45

mrtron wrote: post #43

Earlier quoted context omitted.

That would be a tough situation, with no great solution. Am I wrong in thinking you either bring in people from then on as employees? I can't picture bringing on a 3rd and giving them a full founder stake down the road, and the middle ground is very tough.

Not allowing yourself to bring in key contributors in the future is an awfully big handicap to accept. Allocating equity from a large pool, vesting and granting to the original founders as time goes on, and leaving a lot of headroom for future contributors seems like the right play.

If I am giving someone equity from an equity pool - I wouldn't consider them a founder. But that may just be semantics. Bringing in another founder down the road could work - it would just be a non-trivial decision to make regarding the split. Which slightly differs from what I originally, but I didn't mean to say I would completely rule that possibility out.

I definitely agree if you want to get and retain good people, having headroom in your equity pool is important.

Re: Seth's Blog: Advice on equity

#47

Post by mrtron » Thu, Mar 19, 2009, 10:16 PM UTC

brk wrote: post #44

mrtron wrote: post #17

Earlier quoted context omitted.

It does sound like a bees nest of problems. I much prefer just splitting 50/50 and having both founders kick as much ass as possible. This does force you to be able to rely on your cofounder, but that is probably is a good idea (and unavoidable) anyways.

You mention that you "prefer" this. IMO, this can never work, but I'm curious how/where it's worked successfully for you that you prefer it. What if you realize that you need to add more executive-level people or even just regular employees to the company, or raise money?

I was referring to the founder split in the company. Providing an employee option pool or raising funds would equally dilute the founders.