Startups should work to make their employees wealthy, not just their founders and investors
Earlier this week, a modest deposit appeared in my checking account, one that I honestly never expected. You see, it was for work I did from 2001 to 2003 at a startup called Linden Lab, the company behind the virtual world, Second Life. And when that company was acquired by another private party in late 2020, the shares I bought in 2004 turned into cash. The deal size was small compared to the IPO and SPAC headlines of the past few months, but I had the benefit of being an early single digit and therefore having a stock value of around 0.04 / share if I remember correctly. That low price was part of what allowed me to purchase my vested options when I left, a conundrum that departing employees often face.
Thinking about this result and jumping into a Linden Lab alumni zoom over the weekend stirred up a number of feelings. Much has changed since those years of trying to build an online community with a small group of people in the Hayes Valley. I then joined a bigger startup that got really big and then started a venture company with a close friend / former colleague. I tried to escape failure only to realize that I have to accept it. And I have achieved “Silicon Valley Middle Class” asset status.
But the real upside was that if you want to work at tech startups and find one that you’re passionate about, both (i) A + people and (ii) fair treatment in terms of compensation, including equity, are the Accept a job. Don’t overthink it. Here I also admit that we’re talking about being privileged enough to even take a job at a startup to get even a small amount of savings on equity and the structural issues that keep many people from doing them to realize results. Remember that there is an asterisk in forward reading, and make a commitment to create opportunities for others, not just yourself.
While I said before that these situations should be approached with open eyes [“Sorry Startup Employee #100, Your Equity Probably Won’t Make You Rich”] I also firmly believe that property is the key to prosperity. A career in technology is a very good road to financial stability, and share capital has been a significant contributor to that for me and many others. It’s always why I’m so excited in my venture role when I see an outcome big enough to benefit an entire team, not just executives and investors. For this reason, I also support providing your seed / A employees with at least early exercise. And extension of the practice window for employees who leave on good terms over a period of more than 60 days. And why we partner with the founders we support to make sure there is enough equity to make great hires.
FWIW, we back up this belief with our own actions. Everyone on the homebrew team receives carry in the fund. This means that in addition to salary and bonuses, Satya and I will also get profits back from the fund if they get profits back from the fund. You can’t preach an ownership mentality outside of your company and do something different internally.
Notes and more
📦 Things i enjoy
Here’s my yearly recommendation for the easiest way to make hard-boiled / poached eggs. And I just started Watchmen on HBO – no spoilers please!
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Tia is a women’s healthcare from the start that combines IRL clinics with URL telemedicine. They are a well-funded Serie A startup that is growing rapidly to meet their customers’ needs. If you want to join the Tia team and shape the future of care, hire them.