Benefits of Option Employees in Unlisted Companies

After many startups have achieved certain "success" in business, many people who get the option know that the option is so valuable; After many flickering startups went bankrupt, many people who got the option knew that the option was a joke.

The options of most companies are really worthless, just look at the success rate of startups. Whether the option can be cashed or not, and whether it is valuable or not, depends to a great extent on your own vision and judgment, choosing the right team, following the right people and doing the right project.

The core idea is that start-up teams generally need to have a big head and more equity in their hands, which is very necessary for future corporate decision-making and dilution of the equity structure of future financing. Generally speaking, for the CEO of a start-up company, it is best to own more than 50% of the shares, otherwise the further you go, the greater the financial risk. There are two main ways to distribute the initial rights and interests:

Assign according to everyone's contribution to the project. Generally, a project needs to be started, which mainly includes product, technology, finance, market, operation and design. The founding core team can allocate equity according to the contribution value brought by each person. If a product is technology-oriented, technology partners can have more equity. However, for most domestic entrepreneurial teams, most of them are market-oriented and operational products, so the founders responsible for these two pieces generally need to obtain more equity to grasp the lifeline of the company.

Distribution according to the amount of capital contribution, but we must pay attention to the distribution of capital contribution to match the company's future development direction and strategy, and we can't just distribute equity according to the maximum amount that everyone can afford.