Karl only came back after we raised money and offered him a salary.
Did you offer him any compensation during that period to stay? I am guessing no. Isn't it unfair to offer him equity only if he works for free without any guarantee of compensation? What if you were stringing him along for free labor?
If we went belly up, Bill and I would have been shit out of luck
Employee compensation should not be related to how much risk the employers have: it should be related to the market value of the employee. As others have said, Karl also took a risk. If your company went under, all he would have on his resume is an unknown company with less money than if he went for a paid internship at Google etc...
If you are paying below market rate for talent, you should compensate through equity.
Did you offer him any compensation during that period to stay? I am guessing no. Isn't it unfair to offer him equity only if he works for free without any guarantee of compensation? What if you were stringing him along for free labor?
If we went belly up, Bill and I would have been shit out of luck
Employee compensation should not be related to how much risk the employers have: it should be related to the market value of the employee. As others have said, Karl also took a risk. If your company went under, all he would have on his resume is an unknown company with less money than if he went for a paid internship at Google etc...
If you are paying below market rate for talent, you should compensate through equity.