What you can do

A few years ago I was at a company where I felt urgent changes needed to be made. The changes felt so obvious to me – and it felt frustrating that it wasn’t happening sooner. Whether I was right or wrong is irrelevant.  But I felt the pain of inaction keenly – how could we not be making changes? How could we wait?

And then a mentor of mine told me I had three options:

  1. I could write my ideas down and wait to see if I was right.

  2. I could use what skills and power I had to try to make the changes.

  3. Or I could quit.

Immediately, my tension dissipated. What she told me re-framed the problem around what I could do. There wasn’t any “wait and see if it gets better” and she told me clearly that many of the changes I wanted were unlikely to happen. But assuming agency allowed me to take action on what I could push forward, and well, relax, on the other stuff.

The SAFE of option pools

One area where we’ve seen shockingly little innovation over the few last few years is in standardizing and protecting employee options. Sure – the standard egregious stuff has been corrected (10 year exercise period, sharing total share count along with your share count, etc).

But given how much this matters, and how much great employees are worth and fought over – I think more can and will need to be done to attract great teammates.

One reason little has been done is that “employees aren’t in the room” when it happens. Employee stock agreements are made between *investor* and *founder* before the first employee shows up. This creates a bit of an agency problem – who is going to fight for the employee before they’re even there?

I think one option is for a third party (like YC did with the SAFE) to create a new standard. Here are some ideas for what might appear:

  1. Employee board seat (at some trigger of total employee shares vested)

  2. Information rights on financings (including liquidation preferences)

  3. Proportional secondary if a founder ever chooses to sell part of their stake

  4. Consistency of double-triggers across employees

  5. Readable one-pager on the rights distributed with employee agreement, rather than months later with board approval

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