3. If my equity could be valuable, will it be diluted before I can get paid?
4. If not diluted will it ever be liquid?
5. If there is liquidity will I be able to participate? Or only founders/investors.
6. If employees are able to extract real dollars, will I be forced out, laid off, constructively dismissed in advance to reduce what I could take home.
All I see is a succession of methods to keep me on a treadmill chasing a carrot. Until the startup is large enough to take away the carrot.
This perception is hurting startups as a whole. Because you will not be able to convince early stage talent to work for equity. It is not enough to tell engineers 'well you should learn more about equity so you can't get ripped off so easily.'
Your funnel is so spot on it hurts. I made it all the way to number 6, and boy let me tell you, it was a shit show. People being strong armed left and right, people suddenly not showing up to work, and management offering a memo like "Larry has decided to pursue something different in his career."
my experience exactly at the company I worked at for the last 3 years (I'm somewhere else now, and enjoying it much more so far).
Management at that company began to systematically harass, exclude, and demoralize early employees (I was #4) until most of us left. I still haven't got a straight answer, but my best guess is that fear of a down-round was taking over and the founders were eager to claw back some of the equity they had tied up in option grants to early employees, so they could try to protect themselves from the consequences of the impending down round.
1. Will this company succeed?
2. Once it succeeds will my equity be valuable?
3. If my equity could be valuable, will it be diluted before I can get paid?
4. If not diluted will it ever be liquid?
5. If there is liquidity will I be able to participate? Or only founders/investors.
6. If employees are able to extract real dollars, will I be forced out, laid off, constructively dismissed in advance to reduce what I could take home.
All I see is a succession of methods to keep me on a treadmill chasing a carrot. Until the startup is large enough to take away the carrot.
This perception is hurting startups as a whole. Because you will not be able to convince early stage talent to work for equity. It is not enough to tell engineers 'well you should learn more about equity so you can't get ripped off so easily.'