When I was in talks to buy equity, I remember distinctly being told “you have to keep knocking on the door”, it was never an offer, or a push from the vendor. At times, it felt strange, and people often assume that I was “offered equity”, but the meaning behind this comment rings true. You can offer equity to an employee in your business, but do they want it? Do they know what it entails? Do they want to have input, and responsibility?
Offering equity to tie a key employee to the business is often discussed, but if they don’t want it in the first place, it may not actually work. They might go through the process and drop out at the last minute, or they might sell out in a few years time.
In these discussions, its important to communicate with the purchaser regularly, but its also important to know their “Why”. Why do they want to purchase equity? Is it purely financial? Or do they want to have input and shape the direction of their future, and the futures of those they will develop along their ownership journey?
My “Why” is simple. I want to carry on the incubator our business has become, developing team members from the ground up and giving keen people opportunities to grow and develop, because after all – if you’ve got the right attitude and a willingness to learn – one day you can knock on the door for equity.
If you’d like to talk about either side of equity ownership, please feel free to contact us for a free discovery call.
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