CFI dcast: Is It Possible to Achieve Equitable Equity for Startup Employees?
and Ben Horowitz
There’s been a lot of activity lately around trying to improve equity compensation (for example, by removing tax liabilities that handcuff them). Or by making equity more equitable in other ways; as former Groupon CEO Andrew Mason observed, “When startups grow into unicorns, the distribution of employee earnings follows a common pattern: the founders make more money than they could spend in infinite lifetimes, a handful of early folks achieve financial independence, and everyone else gets a nice bonus, but nothing life changing.”
It’s admittedly a very rarefied problem yet one that plagues a number of startup founders and employees who put in a lot of work to make the startup a success … but end up with less than others in the same company. And it’s a problem that has long plagued Mason, who shared his views on something he calls “progressive equity” to help more startup employees achieve financial independence if and when their companies exit through an IPO, acquisition, or other liquidity event. Can it work? Should it? CFI neral Partner and co-founder Ben Horowitz joins Mason on this episode of the CFI Podcast to dissect the idea.
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The CFI Podcast discusses the most important ideas within technology with the people building it. Each episode aims to put listeners ahead of the curve, covering topics like AI, energy, genomics, space, and more.