Mark Suster wrote another fantastic article on his opinion of how transparent a "Startup" CEO should be with his or her team. My great friend Conor Horrigan, Founder of Half Full Brewery in Connecticut, made sure I read it as we've been chatting about this topic over the past year as we've both been growing our businesses.
My favorite section is when he talks about the negative "Option Culture" created when handing out shares to employees and then the follow up discussions needing to have with those same employees when later funding rounds dilute them. Mark says this is how he likes to address the value of employment to his young teams so as to not create that "option culture". I thought it was fantastic and fitting for any company (even those who don't hand out options):
“Join our company because we’re doing exciting things.
Join because you’re going to get more responsibility at a young age than you would a bigger company. Join because we’re a meritocracy and promote success not tenure.
Join because every year at the end of the year you can say that your resume is significantly better than it was the year before. Join because as we continue our successes we will have more resources to reward you with and reward we will.
But don’t join if you’re looking for a get-rich-quick scheme. We’re not that company. We pay less than you could earn at other companies. We have to.
All I ask is to earn your employment every year. If at the end of each year you haven’t grown in skills and stature, if at the end of the year you don’t feel like you’re still enjoying the journey, if at the end of the year you don’t think your resume is going to look better at the end of next year
… then it is time to leave. I’m going to work hard to make sure you never have to.
and if money comes through options at the end of our journey that’s icing on the cake.”
As employers we all should be earning the employment of our teams as much as they are earning employment every year. Its a hard working mutually beneficial relationship that typically is fair in trade with a good salary from the employer (or a mix of a lower salary and shares) and good production/contribution from the employee.
My opinion is (and I think the point from Mark in this section) is that if the primary concern of an employee is ownership and options, then they're focused on the wrong priorities and probably are not a good fit for your team and culture.