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Originally Posted by wet work
If we're starting a biz and I have the loot but need other people to make it happen--are those people/labor not sharing some of the risk by devoting their time/energy?
As with any worker who takes a job with a start up, they risk the job not being there in a year, but they also may not be around in a year, if they find a better job, and their wage compensates them for their time and risk. Of course, if you giving someone with an otherwise common skill set an and equal equity stake, they probably gonna think they hit the jackpot and stay around. I think it's great you want to share equal upside with your employees and give them equal say in how you run the business. Consequently, increasing your risk, lowering your return, and lowering your control. The ROI has to be better than it would normally need to be to make your investment of capital worth it, as opposed to investing that capital into some other option that has less risk, and better upside.
Say you are a poker player, and you provide the bankroll, and bring on a few coaches...are you going to give them an equal share of your winnings?
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Do you think it's better to pay xx/hr period, pay+some %stake or higher% stake no upfront? Having a stake in the outcome is a pretty good motivator ime. It's not being stolen from to chop out those %s--it's smart. And it exists all over the place in various forms already.
If you need someone with unique skills, it might be wise to offer an equity stake.
Last edited by itshotinvegas; 08-11-2020 at 03:29 PM.