Why Giving Stock to Everyone Is Harder Than It Sound
episode
“HR Heretics” | How CPOs, CHROs, Founders, and Boards Build High Performing Companies
21 min
2 speakers
8 chapters
transcribed 18 days ago
Transcript
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Transcript generated automatically by AI and may contain errors.
What is the main topic discussed in this episode?
Hey everyone, how's it going? Happy Monday, Nolan. We are back for another segment of Dear Heretics. If you remember, I'm in a good mood today. This was the knockoff from Dear Abbey, right? The newspaper paper column of advice. And I got one last week, Nolan. I think it's a really good one. You you reacted to it today. You're like, We gotta do this, so this'll be good. First of all, Monday, what's up with you? What's happening?
Dude, great weekend. I mean, well, Niners lost yesterday, so I'm pretty miserable if I'm being really honest with you today. But as I was telling you, it's like I'm doing these exec searches and we're kicking ass, man. I mean it's essentially just me. I'm having so much fun. The thing I I just told the friend about this, Kelly, it's like being in my zone of genius. It turns out it's fun.
What is the core question about giving stock options to all employees?
And so I'm having a blast.
It's kinda cool. I mean, it sounds like kind of what I was talking about. Uh actually on the People Accelerator podcast and talking about How you kinda come back to what you you love and what you're good at. And usually those things Usually hopefully they they equal. But yeah, the nighter sucked. I bet the under which also sucked. To say yeah. Okay everyone. Well hope you're all doing good out there. Um got a question last week and I talked to my friend about it. Thought I'd put it on Dear Heretics because she asked me a question about stock options. And the question Nolan specifically was, hey Well specifically was hay pal. I'm talking to my CEO and we're kind of arguing over whether everyone should get stock options or only certain levels.
Like they don't wanna give S Drs, for example, stock options. What do you think? Would love your advice.
Yeah. Okay, so you know I worked at Carta and uh our goal at Carta was to make everyone an owner. And one of the hypotheses around the software was if we made it easier for companies to issue equity, then more companies would issue equity 'cause it's kind of a pain in the ass if you have to like hit up your lawyer and it's like paper certificates and stuff. So the story I used to tell candidates, which is true, is like my dad has been in sales his entire life. Um, and specifically in sales, and you still see this in tech companies. like back in the day they never got equity and even still today most of them don't. And I feel like if you're transactional in your relationship with employees. So like, hey, this is the number, this is your quota, go hit this thing.
You think on short time horizons. And you make decisions on short time horizons. Uh Utopia for me is everybody is an owner. Now, to take the other side of that. Objectively, investors hate it. And I learned this. Um, it turns out like investors make their money by not getting diluted. And the more equity you issue, the more dilution investors take. And they don't like it. They want to get rich. They want to get their LPs rich.
How did Carta’s philosophy of making everyone an owner shape equity practices?
It's their business model. It's not, you know, terrible blackball capitalism sort of a thing. It's just the way that their business model works. And so the more equity they give away, the more dilution they take, the less money they make. And so I would just say my advice generally high level to this person is You need to come up with the ethos, what matters to you and your company. And the only way you can do that is with your CEO. What's your take on this, Calic?
Yeah, I had and I told her, I said, Look, I have a really strong opinion on this and it's to give ownership of the company to everyone working their ass off to make it successful. Um, I think it's just a just m an eth and moral standpoint, you know, it just feels strange to me. Um the other reason is I mean I I still to this day I don't like doing things or asking other people to do things or expect stuff from them that I wouldn't do myself. And I just think it it creates just a some kind of that equality of like one team. Um That's just kind of my utopian view, Nolan. I think The defensive kind of like view is It's a huge it's a huge headache. Not if when that AMA will be asked around why you don't give options to everybody.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:04–0:52
2
What is the core question about giving stock options to all employees?
0:52–3:06
3
How did Carta’s philosophy of making everyone an owner shape equity practices?
3:06–5:57
4
What moral arguments support giving equity to every employee?
5:57–8:58
5
Why is educating employees on equity essential and how can it be done?
8:58–13:02
6
What are the administrative and geographic challenges of equity adjustments?
13:02–15:59
7
How do board tensions and dilution concerns affect equity decisions?
15:59–19:04
8
What impact does equity have on attracting and retaining top talent?
19:04–21:55
Speakers
2 identifiedMore from “HR Heretics” | How CPOs, CHROs, Founders, and Boards Build High Performing Companies
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