The two [mistakes] that I see the most is the difference between short-term greedy and long-term greedy. So, if you’re short-term greedy, you’re going to be cheap with equity. I’ve never seen anybody build a successful company not giving away a lot of equity.
You’re much better off owning a smaller piece of a massive thing, ask Mark Zuckerberg, than all of a small thing. There are many examples of both that validate this is true.
Understanding and innately believing in this idea of being long-term greedy and giving away a lot of equity is the most important and leveraged thing you can do.
What’s great about that is that you give yourself a chance to be really right. Because if you get a really great hire right, then the thing you’re thinking is, “Wow, I’m so glad I gave this person this equity, they really deserve it.”
And that has massive implications on long-term retention of that person.
The other thing is, if they’re not working out, it’s not fatalistic because you generally have a one-year cliff.
The second thing, correlated to the first thing, is to take the hiring seriously. Really figure out whether these people are aligned. Spend the amount of time to do backdoor references and make sure that these people are great.
It’s shocking how transparent people want to be, which is why it’s even more shocking when we don’t take advantage of that and don’t call people.