I've been thinking about profit sharing, not in the context of investors per se (who probably _should_ get equity), but the teams around various projects in my nascent company. I want to put things together quickly and formalize rewards with a barrier to ownership, investment and selling the company. The structure is generally one that maintains or ramps rewards for involvement and attenuates them over time (~1yr) as they leave. And the details can be explicit and open to all.
Vested equity might be a better choice for employees, since that portion of the profit would increase cash flow and the equity provides incentive for improving the company long-term. A profit-sharing rewards systems might be too much like performance-based sales pay and is shown not to be good for products in the long run.
Comments
I've been thinking about profit sharing, not in the context of investors per se (who probably _should_ get equity), but the teams around various projects in my nascent company. I want to put things together quickly and formalize rewards with a barrier to ownership, investment and selling the company. The structure is generally one that maintains or ramps rewards for involvement and attenuates them over time (~1yr) as they leave. And the details can be explicit and open to all.
Thoughts in this vein?
Vested equity might be a better choice for employees, since that portion of the profit would increase cash flow and the equity provides incentive for improving the company long-term. A profit-sharing rewards systems might be too much like performance-based sales pay and is shown not to be good for products in the long run.