Interesting. I think that equity levels are more tied to funding rounds than company size. The availability of capital means that a company can afford to keep more equity by paying cash.
The "projections" on how much you would receive in an exit are just straight percentages, but most employees will experience dilution for later funding rounds and also face overhang from liquidation preferences, etc
I had a calculation for the head of marketing ("lead") and for a 4-6 person company, the equity was .98% That is incredibly low
@MarketerGraham Good call. I think that's why Buffer tops out the equity conversation at the 60 employee mark. Any company larger than that is likely Series A (or later) and therefore flush with cash (either profits or huge round), and can afford to pay market rate salaries.
And great point on the dilution -- I whipped those out in a few minutes and didn't consider the true complexities to that process, which is obviously different for every deal.
Re the 0.98% equity... I think a missing component here is the time* at which someone joins a company. For example, a 4-6 person team can actually be 5 years running, and a 10-person team can be in its infancy.
While the Buffer calculations don't include the age of company metric, iContact's Ryan Allis does here (search "rule of thumb"):
http://startupguide.com/entrepre...
@ryanckulp hey Ryan! Awesome stuff here. I just want to add that overall, our formula is very much a living formula. We don't always go too much further than we need to. For example, we'll definitely provide equity for people after we hit 60 people, we're just a little far away from that situation right now.
@joelgascoigne Right on, thanks Joel! And happy to update as you guys do. Pushing new features next week to include Fred Wilson's formula, iContact's formula, etc all side by side. Thanks for checking this out. :)
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