[Benjaminsen]

You do it as a partnership where new employees buy into the company when they get hired.

[WrongAssumption]

No one is doing that. Reality is employees want the upside without the downside risk.

[ghaff]

It happens with partnerships sometimes. But it's generally a pretty risky move for a would-be partner to make unless there's already a money-making engine.

[righthand]

But VC backed companies have way more risk for average employees. How can that be true if you might never get a non-diluted share or any compensation when sold off?

[csa]

> You do it as a partnership where new employees buy into the company when they get hired.

Practically speaking, this does not work in most businesses.

But maybe you have an idea that I haven’t seen.

What would some numbers look like for a company and what would the buy in be for a new employee?

[righthand]

There is a base package of employee shares you get upon being hired. The investment portion would be separate from the base package as part of adding the investor-employee to the company.

[shawabawa3]

It would be very hard to find talent willing to do that

[dkekenflxlf]

Actually, some of the Big4 has a partner model where you can buy in if you are promoted to partner level

[righthand]

I doubt it if everyone is leaving mega tech corps at 30-40 years old nearly ready to retire.

[closeparen]

That is basically the 1% equity founding engineer model! You "buy in" with free labor, the delta between your compensation and market rate. Some of the problems are:

* You can only "invest" in one company at a time this way, so the risk profile is much worse for you than for a VC with a lot of different portfolio companies.

* It's rare for a 100-person company to be valuable enough that a 1% equity stake is competitive with the levels.fyi payscale.