David Hegarty’s Post

Founders - here's a benchmark of equity given to employees. 📊 (but first let's explain this graph 👇) This graph from Peter Walker shows equity grants to employees sorted by when they joined and comparing 2022 vs 2023. 𝐁𝐮𝐭 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐚𝐧 𝐞𝐪𝐮𝐢𝐭𝐲 𝐠𝐫𝐚𝐧𝐭? ⤷ It's a non-cash compensation given to an employee where this person receives a percentage, now or in the future, of ownership in the company. A startup is usually short on cash. As such, equity is a great way to compensate employees without impacting cash-flows. Grants may come in various forms but the most common is a Restricted Stock Unit (RSU) that requires employees to achieve certain milestones – such as years of service – to earn the stock. 𝐍𝐨𝐰 𝐰𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐭𝐡𝐞 𝐠𝐫𝐚𝐩𝐡 𝐭𝐞𝐥𝐥 𝐮𝐬? Here we can see the average percentage of ownership given to employees. Let's focus on 2023. Average Benchmark for 2023: Hire 1: 1.00% Hire 2: 0.75% Hire 3: 0.50% Hire 4: 0.42% Hire 5: 0.31% It's interesting to see the drop between hire 1 and 10. And that's something that founders should bear in mind when they recruit new employees. They won't all be treated equal and as such the conversations might feel different. In general, allocating equity is a tool to: ⤷ bring in great talent in your early days ⤷ retain employees and reduce attrition ⤷ boost profits and motivation in the company ⤷ create alignment between founders, shareholders and employees The key here is to find a balance between giving enough to attract and retain talent while also having enough left for advisors and investors. 🔔 Follow me (Hugo Rauch) and join a community of startups addicts 📰 Subscribe to my newsletter at the link below my name

After discussing the IPO environment last newsletter, it’s time to switch gears a bit and check in on the state of employee equity. Check out May's Issue of the Monthly Start-up for analysis on current compensation trends and how to better take control of your equity package. #employeestockoptions #startups #venturecapital

How Silicon Valley Companies Thinks? What Matters 'Profits' or 'Valuations'........🤔 let me tell you a secret. In silicon valley, companies often operate differently from traditional businesses. here the focus is less on making immediate profits and more on achieving rapid growth and market dominance. they prioritizes potential over current earnings. Most of the companies you see are in losses, but there valuation skyrockets. This is why companies can be called 'pre-revenue stage' yet still valued in the billions. Valuation is most important thing than profits. Equity ownership in the company creates generational wealth with increase in valuation and not profits. High valuation in silicon valley are driven by future potential and not just present day numbers. They have disruption mindset and long term vision. "Also profits can be utilized for reinvestment and expansion." Note to founders: Equity is most imp. Don't dilute too much. 👇🏻Founders Ownership of top companies.

"In the fast-paced world of startups, waiting around isn’t an option — especially when building your team. As a founder, how can you ensure your strategy attracts top talent? What happens if hiring takes too long?" Insightful words ahead of Sifted's team building talk next month, and echoes the sentiments we shared in one of our Insights earlier this year: https://lnkd.in/eD2M-D3i

We all understand the significance of growth for startups. However, achieving an attractive financial position hinges on retention, be it of customers or employees. Without strong retention, profitability remains out of reach, as acquiring new customers and employees can be a cash drain.🚰 Here are 4 things to focus on to improve retention: 1️⃣ Feedback from customers so that you are fully informed about their needs and pain points. Once you have the feedback you also need to make sure changes are embedded with address what your customers need. 2️⃣ Pricing incentives which favour loyalty such as loyalty discounts or membership programs. This will encourage customer stickiness and loyalty, which will improve your overall margins over time. 3️⃣ Measuring customer retention rates and embedding this as an important metric amongst employees will increase attention and focus on retention. 4️⃣ Improving employee retention will also increase customer retention as your employees are the face of your business. And hiring/firing/replacing employees is expensive so retaining staff will improve margines overall. Remember it’s not just the pay which increases employee loyalty, but also having a positive workplace culture, empowering employees and recognising strong performance are all critical also.  _______ 👋 Hi! I'm Neeta Shah. 💻 I'm a Fractional CFO for growth stage businesses. 📈 We partner with Startup CEOs to optimize cash flow, accelerate growth and be ready for exit. DM me to connect and discuss.

Investors look for more than just a unique idea. They value a solid team that can make that idea a reality. The bottom line? You need a team that delivers. A professional employer organization has the tools and resources you need to build a workforce that turns your vision into reality. By working with a PEO, you can offer big company benefits that top talent expects. Learn more here: https://lnkd.in/e4QuA7AU. #Investors #VentureCapital #HumanResources #EmployeeBenefits https://lnkd.in/etStBtfH

Investors look for more than just a unique idea. They value a solid team that can make that idea a reality. The bottom line? You need a team that delivers. A professional employer organization has the tools and resources you need to build a workforce that turns your vision into reality. By working with a PEO, you can offer big company benefits that top talent expects. Learn more here: https://lnkd.in/gJYYHCfQ. #Investors #VentureCapital #HumanResources #EmployeeBenefits https://lnkd.in/gRDqPt3v

Present a compelling case to investors by highlighting your team's specialized skills and unwavering dedication to a shared vision. Imagine having the power to build your dream team. That's the power of working with a professional employer organization. With a PEO, you can offer competitive benefits and create a seamless hiring process, attracting the best talent in the market. How do you see a PEO fitting into your strategy to signal readiness and reliability to potential investors? \#Investors \#StartUp \#EmployeeBenefits \#PEO https://lnkd.in/gSX_x_JY

Investors look for more than just a unique idea. They value a solid team that can make that idea a reality. The bottom line? You need a team that delivers. A professional employer organization has the tools and resources you need to build a workforce that turns your vision into reality. By working with a PEO, you can offer big company benefits that top talent expects. Learn more here: https://lnkd.in/garHBvPD. #Investors #VentureCapital #HumanResources #EmployeeBenefits https://lnkd.in/gsUZ7cCF