Is it really the best way to incentivize people to do a good job, the future possibility of a large exit, and that they'd get an additional share?
I like the idea of something being pre-determined, set from the get-go, however as you mentioned different individuals have and bring different value and have different impact in the company. Does it make sense for high impact people to get a 1 megadonk increase, along with a low impact employee?
There's another model I was hoping to be able to explore, though I don't have a lawyer nor could afford putting the resources towards writing any draft for it - which takes more of a convertible notes with a cap -- you give employees higher equity initially, so if the company doesn't do as well then those employees gain more, and that equity comes with a cap - so say it's 2.5% of the company with a $5 million cap and that employee has agreed they'd be happy with that outcome. The company exits for $1 billion which would require a lot more effort from a lot of people - save if it's some automatic viral scaling company with only a small team, e.g. WhatsApp with ~35 employees before selling to Facebook ... under this model then employees 30-35 in WhatsApp scenario could gain $100s of millions of dollars for very little time and energy invested?
I like the idea of something being pre-determined, set from the get-go, however as you mentioned different individuals have and bring different value and have different impact in the company. Does it make sense for high impact people to get a 1 megadonk increase, along with a low impact employee?
There's another model I was hoping to be able to explore, though I don't have a lawyer nor could afford putting the resources towards writing any draft for it - which takes more of a convertible notes with a cap -- you give employees higher equity initially, so if the company doesn't do as well then those employees gain more, and that equity comes with a cap - so say it's 2.5% of the company with a $5 million cap and that employee has agreed they'd be happy with that outcome. The company exits for $1 billion which would require a lot more effort from a lot of people - save if it's some automatic viral scaling company with only a small team, e.g. WhatsApp with ~35 employees before selling to Facebook ... under this model then employees 30-35 in WhatsApp scenario could gain $100s of millions of dollars for very little time and energy invested?