Startup Equity: Synthetic Equity or Sharing Without Sharing (Part 5 of an n part series)

untitled4When you hear “equity compensation” and startups, you immediately think of stock options. More recently RSUs (restricted stock units that settle in company stock) have also been popular. But, what if you aren’t the “sharing” type? Or what if your company doesn’t have stock? LLCs are a good example. How does your business compete when it doesn’t have access to the same tools? Synthetic equity is becoming an increasingly popular answer.

Synthetic equity refers to any type of incentive plan where the value delivered to participants fluctuates based on the value of the enterprise. For corporations, the most common tools are Continue reading

Equity Compensation is a Game of H.O.R.S.E.

untitledAs kids, many of us played H.O.R.S.E. Heck most adults who touch a basketball still play the game. For those of you not in the know, H.O.R.S.E. is a competition where you call a shot and if you make it your competitor needs to make the exact same shot. If they miss, they get a letter in the word horse. If they make your shot, they get to return the process and you have to copy their next shot. This goes on until someone loses by spelling out the word H.O.R.S.E. The goal is to take difficult shots that you can make and your opponent probably can’t.

There are some entertaining videos out there if you would like to skip some of your work time today.

Equity compensation is a game that the majority of companies play like unimaginative or unskilled people play H.O.R.S.E. Rolling out a basic stock option plan to Continue reading