Including equity in your compensation package is an invaluable lever when it comes to bringing onboard talented team members.
Being invested in a company’s growth, being owners of a stake in the company is possibly one of the most relevant reasons people give when asked why they are joining an early stage business. Owning a part of the company and knowing its success can result in a significant financial gain on a personal level is a powerful incentive.
But how much of the company each employee should own, is a harder question to answer. Factors that dictate this allocation may include experience, timing, contribution, valuation, role, industry - the list goes on.
What is certain, is there is no definitive model to follow. But what we can do is look at what are the steps to build the right model - for your company.
We’ve compiled this handy guide with practical tips to build an equity allocation framework.