Attracting talent is enormously important.

I saw some earlier threads on this so I thought I would share how we are trying to do this at Eko. We created a pool of stock that advisory board members and early employees can invest in. This stock is issued at approximately 3X the founders round. The 3X number was debated and we felt it was fair. Principal founders can buyback in case a person leaves . Buyback rights lapse with time.

Tax wise this works out better but upfront investment is required.

In our case a COO or CTO could invest to own as much as 3% of the company. As far as we know this is very generous but we feel it would be worth it if we got exceptional talent. The stake would get diluted as we raise more capital but at 50% dilution it still means over $10MM for each of them if we can get a billion $ exit. For smaller exits the math is obvious. In addition to this we felt we needed to pay 24 lacs per annum as the kind of people that we are looking for would probably command packages of Rs 50lacs to 1 crore per annum. We have retained Reffster a headhunting and referral startup to find and screen candidates for us.

For other positions we have similar combinations of cash + restricted stock at lower levels. Advisory board members get only restricted stock.

This has worked well for us. We have got early employees to join us and we now have two advisory board members.

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