[sethammons]

I land on the idea that the percent is not as important as the raw value if the company hits the targets. 1%? 5%? Of what? If the company plans to get to a $1B valuation, that is different than a company that wants to exit at ~$10M. And since we all know that equity is usually worthless anyway, I think the real way that smaller companies should compete for talent is with other perks. More time off, less days per week, more control over the product's direction, better perks, etc. Oh, and better liquidation preferences that favor employees at the same level as investors because employees _are_ investors if they are taking a pay cut.

[dang]

Of those, it seems to me that more time off and less days per week are mostly out-of-scope for seed-stage startups—it's just too hard for them to survive even when people are working full time and focusing hard. More control over the product's direction (relative to BigCos and large teams) seems already to be part of the startup deal, no? As for better perks, I don't know what you have in mind, but the ones that come to my mind are just fiddling with the margins, and I know a lot of cynical HN users who would argue that's why companies offer "perks" in the first place.

This bit, however:

better liquidation preferences that favor employees at the same level as investors because employees _are_ investors if they are taking a pay cut

seems serious and fair to me, and perhaps something that startups could actually do to stand out. I don't know how doable that is vs. what barriers there might be to it, but I'll ask.

[munk-a]

It also seems fair to relate the discussion of the appeal of a lack of share dilution mentioned earlier - If the view is that you're actually building this product with others then it can be assumed you're constantly contributing to the immediate and long term value - given that stance upward creeping granted value (as direct ownership or options to buy) is similarly logical, the proportional contribution you're making to a company will vary over the length of the company, initially the founder that's brought the actual business proposal to the table will be the main driver - but as you realize that proposal and put forth infrastructure (technical or best practices) the value being brought out of that proposal is shifting toward the engineering side - it's only late in the game once explosive growth has begun (maybe near the 50 employee mark?) that the power of your voice and the weight of your decisions will start appreciably shrinking... I think for the early growth period most additional employees are more further reducing the founder's share in the value created rather than other employees...

This is all intensely vague and general but it's an interesting line you started down with the balance of investment vs. employee contributions, risk and compensation.

[snowmaker]

I think the idea of startups offering perks as a way to compete with big companies is a good one. Being more flexible on how employees work and offering things most big companies don't (fully remote, for example), is one of the things startups can uniquely offer.

The thing about fiddling with liquidation preferences is that it's very hard to change and will have minimal impact on the bottom line for employees. Liquidation preferences only matter in the case of companies that fail, where they might make the difference between making $0 and making a tiny bit of money. Employees will make virtually all of their money on the companies that are successful.