Equity for Startups

[SamJones]

Hi Guys,

Hope you can offer some thoughts. Equity is not an area I am familiar with.

I want to bring passionate people in that compliment my skills. When I bring these right people in, I want them a part of TwentySomeone (information below) for the long term through our growth.

What is the best way to offer equity? Or is it too early to have that conversation, or the wrong way of doing things?

Just some basic information if needed.
TwentySomeone provides self development experiences to equip my generation (millennials) to reach their goals and make their twenties matter. It is 4 months in, I am generating a small amount of £500-£750 a month. Also I have an associate coach that supports me with events in return for mentoring on her coaching.

Thanks.

Sam

 

[colour24]

The problem is you could be giving away an unknown future value to people who haven't yet proven themselves. Don't try to buy their loyalty. They should first try to earn yours. Perhaps reward the best after two years. This will still give the same goal for your people.
You will need good advice now though on how to put this into their terms of employment. Big can of worms possibly.

 

[DavidAshdown]

Are you looking for a business partner or a financier? I'm sure it's possibly both but you need to decide what it is you're looking to get out of either relationship.

 

[SamJones]

The problem is you could be giving away an unknown future value to people who haven't yet proven themselves. Don't try to buy their loyalty. They should first try to earn yours. Perhaps reward the best after two years. This will still give the same goal for your people.
You will need good advice now though on how to put this into their terms of employment. Big can of worms possibly.

Thanks for the advice, appreciate it!

 

[qul]

You can give them share options or restricted shares. You can set it up so that they have to earn the rights to the shares/options using targets/milestones or length of service.

A very rough example, when they first start, they have nothing, but once your monthly sales is £1k they get some rights, and then more rights for £1k increase in monthly turnover etc.

Some startups only offer sweat equity, as they can't pay any wages or very little, but offer equity instead.