SR
ENExample situation: Key Employee Requests Equity
Say a key employee asks you for a stake in the company.
Question
“Our Sales Director is asking for an 8% equity stake to remain with the company. He generates approximately 35% of new revenue, but I am unsure whether permanently giving away ownership is the right retention mechanism. How should I make this decision?”
What to question
Does the 35% of revenue really depend on this person, or on the team and product he sells? What does equity change in his behavior compared with a bonus or other compensation? What precedent does this set for other employees asking for the same?
How the depth changes
Focused → broader → deepest
Four perspectives quickly separate the request from the reaction: how replaceable his 35% revenue contribution really is, the future value of an 8%…
Five additional perspectives test whether his leverage is real or assumed, model a downside where he leaves anyway after vesting, weigh the market…
Six further perspectives stress-test the long-term dilution math across future funding rounds, negotiation tactics for a counter-offer, the operating…
Have a decision like this?
Describe the situation in a few sentences. We suggest the appropriate analysis level.
Compare Essential / Consilium / Grand Consilium