| I don't invest in companies, but if I did, having nonstandard vesting schemes would be a no-deal red flag, at least for any team that didn't have a mile-long pedigree starting and successfully building companies. Vesting is one of the most important protections the operating team has against hiring (and foundational) mistakes, and anybody who has ever started a company knows those mistakes happen routinely. Some things to keep in mind when you feel the urge to twiddle the nods on how vesting works: * It can take 2-4 months, maybe even more for senior hires, to discover whether a new hire is going to fit with the team. * Your rational incentive for allocating ownership of the company to someone who doesn't belong on your team is zero or worse. You are helped not-at-all by the warm fuzzies a fired employee gets when they contemplate their options, but you are harmed immensely by the share of the long-term upside that those employees take from everyone who comes after them and executes well. * Equity grants are not just a proxy for future money. They're legal contracts that can drastically complicate later bizdev events. You don't want a large pool of former employees wandering around with executed options. Think of every such person as a P>0.10 risk of a lawsuit threat. * It is very hard (often virtually impossible) to claw ownership stakes back from former employees. You will, P>0.90, discover candidates later in the life of the company that you'd love to entice with an ownership stake. You will, P>0.90, have a cofounder or employee<4 that doesn't work out. At the same time, a cofounder or employee #1 that's still with the company 3-4 years later almost certainly earned their stake. Vesting balances these needs out. Don't fuck around with vesting. Do what your lawyer says, or get one to sign off on the standard four-year+1-year-cliff scheme for your state. If you want to incentivize people to stay with your company for a year, pull other levers to make that happen. Don't pull the vesting lever for something as simple as "students just out of school have shorter time horizons". |
Some percentage of them are going to flake. That happens when you take people who have spent their lives in an environment with one eval loop and place them in a new environment with differing expectations.
Of those who would flake, some of them can be made into great employees. But a bigger carrot is almost never effective at accomplishing this. The real need is generally along the lines of "effective mentorship" - which is far harder to implement than a revision to your employee benefits plan.