So you want to be an Investor?
So you want to be an investor?
Well, maybe not as much NOW with the markets doing what they’re doing. But what if you could invest or gain the skills needed to better navigate the landscape without needing to write a check tomorrow? You can. It’s called employee equity.
I’ve had countless friends and colleagues tell me excitedly about the shares they are picking up in their new employer’s company. ‘I have 30,000 shares as employee 15!’ They say. ‘What percentage of ownership is that?’ I ask. They have no idea. How much financing have they taken on and who are your investors? Again, blank stares.
If you’re banking on your equity being worth something and the vesting (or ownership schedule) only starts after a year of working at that business and vests (or becomes yours) after 4 years in total, don’t you think you should know a bit about the business financing history and positioning and health for the future?
We’re all jazzed up on diversity of workforce and the glass ceiling but did you know the equity ownership gap is even worse? Let’s do something about it.
What can you do? Start learning the basics. You can’t evaluate or negotiate on something you don’t understand.
How much are those 30,000 shares worth? Ask the percentage ownership they represent and ask the last valuation of the business. What is the top-line (or revenues) of the business today? Do they have a decent runway and have plans to raise more or exit in the future? I’d want to know all of these things and more.
People matter. Especially with early-stage businesses. Are your founders credible, skilled, and will they do what it takes to execute and scale the business? Are they able to recruit and hire key talent to grow their team? Hopefully, they found you, right? But what is going on around you? Dig in and ask the questions.
Does it look like a compelling business? Do you have questions or thoughts you’d like to bounce off of someone? I’d be happy to connect.
Natalie Levy runs an investment club (predominantly women-identifying but all are welcome) out of Boulder, CO focused on seed and pre-seed deals. She can be reached at firstname.lastname@example.org.
Looking for more insight? Check out our investment series freebie session here.
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