What are the pros and cons of equity sharing compared to a salary?

What are the pros and cons of equity sharing compared to a salary?

Equity sharing can offer long-term financial benefits if the company grows, but it comes with risks. A salary provides immediate income but lacks the potential for growth.

Can you explain how equity sharing works?

Sure! Equity sharing involves giving employees a stake in the company, often through stock options, which can increase in value.

What are the risks of choosing equity over a salary?

The main risks include the potential for the company's value to decrease, which can lead to a loss of investment, and the uncertainty of when or if you can cash out.

Is it common for startups to offer equity instead of a higher salary?

Yes, many startups offer equity as part of compensation packages to attract talent while conserving cash.

What should I consider when deciding between equity and salary?

Consider your financial needs, the company's growth potential, and your risk tolerance. It's important to weigh immediate income against potential future gains.