Whether it’s with investors, partners, or employees, don’t be too greedy with your equity. Hoarding equity might mean that you retain ownership of your company, but owning all of the equity of a dying or stagnating business is worthless. 100% of nothing is nothing. Selling equity to investors gives you the capital, mentorship, and connections you need to quickly scale. Paying employees partly in equity creates an ownership mentality, which makes them dedicated to the long-term success of your business. Giving strategic partners the option to buy a piece of your company can cause them to go to extremes to help you succeed.
Smart entrepreneurs know how to use equity to align incentives and get people excited about their businesses. Think of your equity as another tool in your arsenal, and welcome opportunities to use it strategically. After all, a small piece of a big pie can be worth a lot more than 100% of nothing. Have a strong sense of your company’s worth, but don’t be a pig – pigs get slaughtered.
