Hi there people of the startup world,
I’ve been considering and planning starting a company for quite a few years.
However, I don’t want any equity involved in this.
Essentially, it would be a business that’s run similar to a nonprofit focusing on personal finance, financial education, helping people with their budgets, product reviews etc etc. So being for the people, rather than for making money (while not being a charity). Revenue would come from monthly subscriptions and possibly product sales down the line.
As I’m looking to tread on some toes with this and shake up some industries, I’m not interested in raising VC money, shareholders, or ever selling this business as I’m of the strong belief that this would introduce biases and self interests, which is exactly what I’m looking to avoid.
Any ideas on how this could be made attractive to co-founders (unless I find someone who is also passionate about this) without giving equity that would be meaningless in the first place?
I’m considering business wide bonuses based on business performance on a set % of profit. This could obviously be tied to role and seniority, or if possible an internal employee share scheme, in which case internal equity could be possible (pending legality and implications).
Any feedback or ideas are really appreciated! Thanks a lot
Equity = Risk
If you’re assuming all the risk, then you don’t have to share equity. Simple as that. Pay everyone a fair market salary, maybe put a bonus program in place, etc.
If you want to share the risk by not paying full fair market compensation you will have to share the equity too. It would not be fair to ask someone to share the risk but limit their rewards. Even if you could get them to agree to some kind of non-equity option it wouldn’t be fair. Agreeing to something doesn’t mean it’s fair.
Check out the Slicing Pie equity model at www.slicingpie.com. It will set you free!