"I appreciate it, Alex. But I have to pay my mortgage…"
My best hire walked away from “million-dollar equity upside.”
$50K more salary won. So did he.
I used to believe the SV playbook:
- Offer equity to attract top talent at below-market salaries.
"You'll get rich when we exit," I'd promise.
Early at Groove, my first key hire left after 18 months. He took a role paying $50K more annually. His equity would still be worth zero today.
That's when I realized equity is a founder's fantasy.
The conversation that opened my eyes:
"Why did you leave?"
"I needed the money now, not maybe later."
"But the equity upside..."
"I appreciate it, Alex. But I have to pay my mortgage…"
I own 92% of Groove.
My employees have 0% equity.
They're the happiest team I've ever worked with.
Here's what I learned about what employees actually want:
- They want to pay their bills without stress.
- Daily recognition keeps them engaged.
My team crushes it because they're paid above market rate.
Founders think: "Equity = shared upside motivation"
Employees think: "Equity = monopoly money until proven otherwise"
I've never had someone quit because they didn't get 0.1% of a dream.
But I've lost great people because I underpaid them for 24 months.
The switch I made:
Rather than equity negotiations, we have salary reviews.
I pay all of them well above market rate.
They stay for years.
Your employees don’t need a lottery ticket.
They need to love Monday mornings and be paid what they’re truly worth, today.
Until next time,