How to Think About Equity

Why are some founders scared to approach equity?

As we are kicking things off at Community Growth Ventures (CGV), we are having more conversations with founders - reach out to us if you want to grow your company.

Quite a few times discussions about recruitment have led to equity.

Quite a few times founders have expressed their dismay that they have to split equity to get co-founders and critical employees.

Yes owning a 100% of your company is cool. You call the shots, get the fancy CEO title and you are the boss. 

But building a company, at the early stage, with barely any revenue and few customers is hard.

It is bloody hard. Even Elon Musk finds it hard.

“Starting a company is like eating glass and staring into the abyss” - Elon Musk

Unless you have the money to pay for contractors/outsource key functions, you have to recruit people to fill these roles.

How do you do that?

Simple. By splitting equity with co-founders and employees.

It is hard recruiting talented people, let alone in a competitive city like London.

Not everyone is motivated by money, some people want to build something from the ground up and be a key player in a company.

Since money is low, your equity has to be in play.

Think about it, would you leave your corporate job to go work for at an early stage cash-strapped startup, where the founder owns 100% and is not open to sharing equity?

No you wouldn’t, that makes no sense.

Owning 100% of nothing sounds cool on paper but when you have the opportunity to own 20% - 60% of a growing revenue-generating company. It is pretty obvious which option makes sense.

Don’t let your ego cloud your judgement, think about putting equity in play to acquire a team that can help grow your company.