On: Ask HN: We are shutting down our startup, I get ou...

[estreeper]

> First employees should get ~1% equity, more if it's an employee-owned co-op.

I would be interested if anyone knows more about how the co-op idea would work, also assuming you took investment. Would a corporation be formed as well as a co-op, and the co-op would be a shareholder in the corporation?

[k__ → estreeper]

As far as I know, if your company has 10 employees, everyone owns 1/10 of the company. If you hire someone else, everyone, even the new person, owns 1/11 of the company.

The idea is: shares aren't devided by capital, but by heads.

But you can usually add some clauses to the contracts, that people have to work for some kind of period, before they are considered "comrades".

[C1sc0cat → estreeper]

1 By definition equity and dividends must be shared equally between all members of a coop 100 members = 1%

2 Structure the way I have seen this work the coop owns the company (or a controlling interest) which employs the members of the coop

Coop structures can get complex normally most countries have special laws for this and it can be tax advantageous.

Coops can take outside investment but they have to maintain 50% +1 shares to remain a coop

[Blaiz0r → estreeper]

There are many ways to slice the pie, and I would offer that a better way would be to give profit percentage instead of equity.

When it comes to making decisions many employees won't care too much about the direction, and will slow down the process.

Give your employees a fair share, but keep ownership amongst the founders.

[C1sc0cat → Blaiz0r]

Most sensible people are going to want shares, also not having shares is counter to the whole HN SV ethos