It's better for founders too if the employees don't get screwed because a portion of the talent is silently passing over equity opportunities for fear of the complexity, and a founder can't even see or measure the talent that silently passes
Like me! Why can't there be a simpler subset of corporate law? A startup using corporate law that was easy to reason about (like a programming language) would have a huge recruiting advantage.
So a while ago I read all of the UK Companies Act 1985 with someone when we were trying to work out how to set up a non-profit. It's actually not too complicated and looks remarkably like a programming language for company operations. For example, here's some input validation from the more recent version: http://www.legislation.gov.uk/ukpga/2006/46/section/57
But the vast bulk of it was clearly exploit prevention "code". You can quite clearly work out what the scam was that caused each of the overly specific rules. This makes it somewhat irreducibly complicated.
I wouldn't say its "irreducibly" complicated. Production C code has a lot of exploit prevention code that production code in a higher level language doesn't need.
Your comment sounds interesting though I'm not sure I'm following. What can't a founder see or measure? Why would the founder care? For rehire potential?
Most employees have to like your company in the first place before they would ever even return your recruiter email or apply to work at your place. These people do not communicate why they rejected you.
Basically, you have the option of $250k annual liquid compensation from GoogFaceSoft and a low stress & time working environment. Vs. random startup that if it hits it big, you would make more than that amount and have more fun doing it.
Now you starting hearing stories that equity compensation isn't so great:
1. Companies take far longer to get to IPO now. You might not be able to liquidate your stock until 7+ years later. They also don't like it when you try to sell in between.
2. Companies play take back games with dilution, zynga style threats, or even just pure stock buyback options at the original / FMV strike price like Skype.
3. VCs play take back games with liquidation preferences & more.
4. There is this AMT headache that can be double or more than your strike price cost. Founders have 0 AMT, 0 strike price cost, and long term capital gains tax rates!
5. You soon realize it's %70 investors, %15 1 or 2 founders and %15 all employees on a power law! If your facebook then maybe %20 founders, %20 employees. Why become an early start up employee who works just as hard with %0.5-%0.01 when you can be a founder? Thus the 'glut' of start ups with angel rounds.
You have overpriced mortgages & rent to pay in the bay area, so money is important.
> You have overpriced mortgages & rent to pay in the bay area, so money is important.
I would turn the point around and start from here. GoogFaceSoft is great comp low stress environment only close to headquarters.
In most other places GoogFaceSoft engs are the guy the headquarter outsourced to, and that is a dramatic shift in stress/job satisfaction.
Bottom line, talent is everywhere, if the product is solid investors will find you; if the startup is focused on angels/exit instead of great products then, well, that's why people want no part in it.
The idea is that some new hires may be missed due to a candidate deciding the options package is too risky. If they know upfront that leaving the company doesn't force their hand, maybe the package is more attractive.
The founders can't see the talented people who didn't even bother applying for a job at the company, and the talented people who instinctivly ignore "start-ups".
