[ta_tunestub]

FWIW, This same type of event DID demotivate me and a lot of my co-workers who were early employees at a startup (now 1000+ person company). The company raised a round and the founders sold off some of their shares. We knew because they bought nice cars/houses after the event. Our shares got diluted.

From our perspective, it seemed like a slight vote of no confidence in the company and a little unfair to us that we didn't get the chance to sell shares whereas they did. You lose a bit of that "we're in this together" vibe that makes it organically motivating to work at a place.

Just my 2c, but consider arranging a situation where employees can sell up to a percentage of their options as well. A small percentage makes the eventual payoff palpable and will reduce resentment. You'll likely need to sustain the high levels of motivation for your fast-growing startup to continue it's success.

[jacquesm]

> From our perspective, it seemed like a slight vote of no confidence in the company

It is. But it is not a bad thing: founders have very little besides their shares in the company in the world. Banks won't touch them when they apply for a mortgage or a car loan. Employees have safety nets that founders have to do without. Reducing some of the risk to sleep better is actually good for the company.

That 'vote of no confidence' is always there, start-ups are risky by nature. It's perfectly ok to de-risk a bit after carrying the vast bulk of that risk after some time has passed.

> and a little unfair to us that we didn't get the chance to sell shares whereas they did.

So, found a company yourself. See what you feel like after you've been slogging for a decade or so without any net. It is always super easy to berate the position of someone else when you yourself are taken care of.

> You lose a bit of that "we're in this together" vibe that makes it organically motivating to work at a place.

You lost something that you never had in the first place. Founders, employees and investors never have exact alignment of their goals.

> Just my 2c, but consider arranging a situation where employees can sell up to a percentage of their shares as well.

Employees typically have so little stock that this makes no sense, but in the few cases where employees have a significant amount of stock it might make sense.

Also, in many companies employees do not hold their stock directly, but as options and those options may not have been exercised yet.

[lovich]

>> and a little unfair to us that we didn't get the chance to sell shares whereas they did.

>So, found a company yourself. See what you feel like after you've been slogging for a decade or so without any net. It is always super easy to berate the position of someone else when you yourself are taken care of.

>> You lose a bit of that "we're in this together" vibe that makes it organically motivating to work at a place.

>You lost something that you never had in the first place. Founders, employees and investors never have exact alignment of their goals.

Don't startup employees normally take below market wages and work crazy hours to get the company going? They're not in as deep as the founders but they are making sacrifices for the company.

It's not like they are talking about taking on more investment here and everyone's getting diluted. It's the founders giving themselves a little personal enrichment ahead of all the other agreements that the employees agreed to.

Why would you expect the employees to continue to make the sacrifices to keep the company going if you do this?

[ng12]

> Employees typically have so little stock that this makes no sense

Well, yeah. If you're already comfortable with under-compensating early employees feel free to continue shirking them.