‘Equity is like shit’

February 22, 2007

Although I wasn’t there to see it, I was watching this video recently. Jerry Kaplan is the speaker (he’s the CEO of Winster) and one of his pieces of advice is don’t be greedy. He uses a great analogy to justify not hoarding equity as a founder:

Equity is like shit. If you pile it up, it just smells bad, but if you spread it around, wonderful things will grow.

A lot of what the ETL speakers have to say is often very similar. Usually it follows the pattern of great people make great teams, you have to take risks to succeed, market timing is important, etc. What’s interesting is that this isn’t necesarily a bad thing–it serves to reiterate some of the most important aspects of starting a company (which a lot of people obviously still don’t understand). One of those is equity. It surprises me when some people expect to get venture funding and still own 60, even 70% of the company. What surprises me even more is when they use that as an excuse not to pursue VC funding. As my mentor Joe told me once,

I’d rather own 1% of a multi-million dollar company than 100% of a zero-revenue company.


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