America Destroys Its Advantage
April 29, 2025
For decades American Universities have been the envy of the World. With the brightest minds and the best facilities, these globally recognized institutions acted as a magnet for talent everywhere.
I often see founders hesitate when employees ask for a larger equity stake in their startup. However, I would urge most founders to be generous with equity, here’s why:
In the early days, your company needs runway or time more than it needs equity. If you give an employee more equity, you can reduce their salary, giving your company more financial runway.
Most equity grants come with a 1 year cliff, so you get 11 months to see if this employee is worth all the equity they’ve been allocated. With a high salary, you start paying immediately.
Skewing employee compensation towards equity aligns the interests of founders and employees, as everyone will get paid the most when the company sells or IPOs. Don’t be frivolous but the first 10 employees should be heavily invested in the company via stock options.
Best of luck out there.
