Great post by Chris Dixon over at cdixon.posterous.com. I recommend reading the whole thing.
Personally I think one of the worst things happening now is that companies lie to employees and only tell them the # of shares they own and not the % they own. # of shares is totally meaningless. Major NYC companies like Gilt Group claim that the # of shares outstanding is a “trade secret” which is a complete joke. Besides being unethical, I worry this deception will create another generation of employees (esp. on the East Coast) who think equity is a scam. I spent the last 10 years recruiting hackers to work for me and my friends’ companies – convincing them equity was risky but not a scam. Please let us teach the next generation it’s risky but not a scam.
I believe in being completely honest and transparent with everyone at Posterous. Our product roadmap, operating plan, financial details are all available if someone within the company is interested. Every month I present the board deck to everyone (something I learned from reading Delivering Happiness by Tony Hsieh).
I love it when someone takes interest, because it shows they care, that they truly believe they own part of the company.
Starting with the first job offer I ever made, and still today, I talk about equity in percent ownership. I never even talk about number of shares until we’re doing the actual paperwork. It’s meaningless otherwise. This isn’t something I was taught to do when I became CEO, it just felt like the right way to do business.
We’ve hired people who have been burned by the companies they worked for in the past. I’ve interviewed people who had no interest in equity because they had been trained to think it wouldn’t amount to anything.
That’s really unfortunate. At Posterous, everyone is an owner and everyone knows exactly what they own. This drives everyone to work harder, to be more dedicated, to actually care about the long term success of the company.
Even as we grow, I’m committed to keeping the same level of openness and honesty at Posterous.
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