Making Your Employees Founders: Good Idea or Bad Idea?
If you’re a business or a startup owner, you probably know how tricky it can be to hire that first batch of people. You need to convince them that your offer is the best on the market, but at the same time, give them an attractive incentive. You need them because they can help you move forward
, so you should convince them that your offer is the best on the market. But at the same time, you ought to give them an attractive incentive to say yes. What to Consider
In the process of hiring, you have a lot to think about. Do you need people who just need a job or people with an entrepreneurial mindset who can help you move forward? Some startups, but also regular companies, try to convince a job candidate to come on board by offering some equity in the company
. But other startups just offer a plain and simple job position with a market salary and the additional perks and benefits. In this article, we’ll measure out the pros and cons of making your employees founders, so keep reading to see our insight. Making Your Employees Founders: Yes or No?
Many company owners would argue that there is a clean line between a founder and an employee. And this seems logical in the sense that the company was founded by the founder. So, everyone who joined in afterward is considered an employee. For example, founders are the people who took the initial risk to start a company and invested their time, energy and money into it. So, when an employee comes along, some hesitate to give them this title and position. But on the other hand, startup owners consider another perspective. They form a team
of people who all work hard to make the company succeed. And for their efforts and involvement, they deserve to be made founders. This is where the actual founder offers equity to the employees. They may also be called co-founders
or members of a founding team. Then, there’s a different side of the spectrum. Some people think that giving the title ‘founder’ to a person is only useful to perk up their resume, without having much practical, real-life value. In these cases, the first founder won’t hesitate to call members of his best team founders. But if they’re giving them actual founder responsibilities, competitive salaries and equities on top of the title, the performance expectations increase. Which way you’ll go is ultimately your decision. After reviewing the pros and cons of making your employees founders, see which decision could make your company grow and develop further. Bottom Line
Ultimately, whether making your employees founders of your business is a personal, subjective matter. It should be based on the nature of the company, how successful it is (or strives to be in the future) and how the employer-employee relationships are formed and maintained. In general, larger companies don’t make their employees founders, but in startups, this is becoming a practice. This is especially true when aiming to attract a high-quality workforce. If you’d like to ask your employees for feedback on this matter, try our POPin software for gathering anonymous team insights. Check out our blog to discover more interesting ideas or try POPin today