[jacquesm]

> From our perspective, it seemed like a slight vote of no confidence in the company

It is. But it is not a bad thing: founders have very little besides their shares in the company in the world. Banks won't touch them when they apply for a mortgage or a car loan. Employees have safety nets that founders have to do without. Reducing some of the risk to sleep better is actually good for the company.

That 'vote of no confidence' is always there, start-ups are risky by nature. It's perfectly ok to de-risk a bit after carrying the vast bulk of that risk after some time has passed.

> and a little unfair to us that we didn't get the chance to sell shares whereas they did.

So, found a company yourself. See what you feel like after you've been slogging for a decade or so without any net. It is always super easy to berate the position of someone else when you yourself are taken care of.

> You lose a bit of that "we're in this together" vibe that makes it organically motivating to work at a place.

You lost something that you never had in the first place. Founders, employees and investors never have exact alignment of their goals.

> Just my 2c, but consider arranging a situation where employees can sell up to a percentage of their shares as well.

Employees typically have so little stock that this makes no sense, but in the few cases where employees have a significant amount of stock it might make sense.

Also, in many companies employees do not hold their stock directly, but as options and those options may not have been exercised yet.

[lovich]

>> and a little unfair to us that we didn't get the chance to sell shares whereas they did.

>So, found a company yourself. See what you feel like after you've been slogging for a decade or so without any net. It is always super easy to berate the position of someone else when you yourself are taken care of.

>> You lose a bit of that "we're in this together" vibe that makes it organically motivating to work at a place.

>You lost something that you never had in the first place. Founders, employees and investors never have exact alignment of their goals.

Don't startup employees normally take below market wages and work crazy hours to get the company going? They're not in as deep as the founders but they are making sacrifices for the company.

It's not like they are talking about taking on more investment here and everyone's getting diluted. It's the founders giving themselves a little personal enrichment ahead of all the other agreements that the employees agreed to.

Why would you expect the employees to continue to make the sacrifices to keep the company going if you do this?

[jacquesm]

> Don't startup employees normally take below market wages and work crazy hours to get the company going? They're not in as deep as the founders but they are making sacrifices for the company.

I'm not sure if I managed to make my point coherent enough, but 'below market wages' versus being up to your neck in debt are not exactly equivalent.

Some of the founders that I know have gone so far as to sell their personal belongings in order to get the company its initial funding. So sure, early employees make sacrifices too, but those are usually not at the same level. It is 'I am making less than I could' vs 'I risk all that I have built up over the last decade or more'.

> It's not like they are talking about taking on more investment here and everyone's getting diluted.

Well, that is not necessarily mutually exclusive. You can take on more investment and take some money off the table at the same time. Usually investors frown at this early on in the life of a company but after 3-5 years it is relatively common practice.

> It's the founders giving themselves a little personal enrichment ahead of all the other agreements that the employees agreed to.

No, it is the investors ensuring that founders can concentrate on the company rather than on their personal financial issues, which is good for everybody.

As for the agreements: if employees agree to be treated different from founders then that is their choice, you do not have to accept those terms. In general I never understood why early hires feel that 0.001% of the company is a fair compensation compared to founders that got together the week before and each put up $50 for their shares, but that's a totally different issue. Once you agree to that it's a done deal. Regret is hardly ever a valid reason to review a signed contract.

> Why would you expect the employees to continue to make the sacrifices to keep the company going if you do this?

I don't expect employees to make sacrifices at all. I expect employees to run the numbers, do the best they can by themselves and to (collectively if necessary) negotiate to the best of their ability. If they are unhappy with the way the founders comport themselves they can always use their most powerful option: vote with their feet.

To me it sounds like a case of utterly misplaced jealousy: if you think that founding a company and taking on the bulk of the risk is easy then you should found a company yourself. If you are unable to run the numbers and you'd rather have a CEO that can't get a mortgage or buy transportation vs one that is 100% focused on what matters then you are acting against your own interest and the company interest through pettiness.

That all started when - as an early employee - you agreed to a deal where you are not treated the same as the founders when it comes to the stock that you hold. In my company all employees and important freelancers hold the same class stock as my own, they paid for it (no options) and if I sell they have a right to go along with each sale.

But that does not mean every company is run like that and I can afford to do this because I already have a few successes behind me. Even so, if you are going for a worse deal then I assume that that is because you saw something positive in the longer term.

[ng12]

> Employees typically have so little stock that this makes no sense

Well, yeah. If you're already comfortable with under-compensating early employees feel free to continue shirking them.

[jacquesm]

Where did you see I'm comfortable with that? Please read elsewhere in this thread about how I run my company.