The Importance of Having Skin in the Game

startups equityHere’s the thing about startups: from the outside looking in, they seem sexy and fun. But once, you work for a startup, it doesn’t take long to realize they’re also all-consuming. Working for a startup is not a 9 to 5, punch the clock job. It can be a 24/7 thing.

This is one of the reasons why I think it makes sense to offer every startup employee the opportunity to have a stake in the action, be it through shares or options. While a healthy salary is always a good thing, it’s different to own part of a stake, even a very small one.

When you’re the micro-owner of a startup, there is a different level of commitment and engagement because it’s not just a matter of having a job but having a direct stake in the startup’s growth and prospects. It becomes a personal and professional proposition.

For startup entrepreneurs, it can be a challenge to share the wealth, particularly if there are external investors involved. If everyone gets a small stake, it starts to add up.

But the better way to look at it is, it’s better to own a smaller part of a bigger thing than a big part of a small thing.

In other words, giving your employees the opportunity to share the wealth is a positive move if it means having happier, more productive and more engaged people who share your vision and passion, and don’t mind going the extra mile to get things done.

At the end of the day, it can be a small price to pay.

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