Large shareholder-employees stick around because they believe they can grow the value of their company.
A CEO owning double digit share of their company doesn’t need more shares. What they want and need, most of all, is dry powder to grow.
Secondary to a large war chest comprised of equity pool and cash to pay salaries, is a decent salary for themselves to keep the family happy with their living conditions while the CEO is basically unavailable as a partner, off trying to grow their company.
I’m surprised that the blog post seems to miss this? I generally have high regard for AVC posts.
A CEO/Founder is never going to be able to double the size of their slice of the pie. While the CEO/Founder is absolutely crucial in doubling the size of the overall pie. At 4 years in I’d say most VC funded companies are still aiming to be 10x’ing the size of their pie at the least.
An equity grant at 4 years in should be totally irrelevant. Deck chairs on the titanic. A little anti-dillusion is nice but not necessary. It’s all about the size of the pie, not the slices, at that point. And growing the pie requires funding on good terms, and massive focus and execution. Generally that means long hours and time away from home, for which a $200k salary helps tremendously to keep the family on board for the voyage.
This idea of keeping the family happy suggests a niche market unto itself. I can think of a few services that would make that easier. There are a bunch of high end concierge services out there, but one that focused on founder families is like an extended family office. Gears turning.
A CEO owning double digit share of their company doesn’t need more shares. What they want and need, most of all, is dry powder to grow.
Secondary to a large war chest comprised of equity pool and cash to pay salaries, is a decent salary for themselves to keep the family happy with their living conditions while the CEO is basically unavailable as a partner, off trying to grow their company.
I’m surprised that the blog post seems to miss this? I generally have high regard for AVC posts.
A CEO/Founder is never going to be able to double the size of their slice of the pie. While the CEO/Founder is absolutely crucial in doubling the size of the overall pie. At 4 years in I’d say most VC funded companies are still aiming to be 10x’ing the size of their pie at the least.
An equity grant at 4 years in should be totally irrelevant. Deck chairs on the titanic. A little anti-dillusion is nice but not necessary. It’s all about the size of the pie, not the slices, at that point. And growing the pie requires funding on good terms, and massive focus and execution. Generally that means long hours and time away from home, for which a $200k salary helps tremendously to keep the family on board for the voyage.