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Get Stock Options

We overpay 10-1000x with stocks to principals. Be stakeholder of the future you are building.

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“if you are offered a seat on a rocket ship, get on—don’t ask what seat.”

Eric Schmidt

We overpay to great performers with stocks

If you are a great fit and we do our job really well, you should earn 10-1000x of your any other next job market option.

We allocate 20% of company shares to the team. That is 200% of the industry average for Series B SAAS or Fintech companies accordingly to Carta.

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Source:

Carta⁠

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Why do we overpay with stocks?

As Andreessen puts it: “New companies generally should not exist. As existing companies have pretty happy clients, teams, and resources. Startups should punch through status quo.” This means exceptional results of the team, unseen by well established companies. Why startups can be better?

Startups’ smaller team size helps to make teammates performance transparent and startups can reward with greater stocks upside. These are two powerful tools to solve the Principal-agent and

Free rider⁠

problems.

“Stock Options is a recommendation straight out of something called “
agency theory⁠
”, that says that you have to align the interests of the people managing the firm with the interests of its shareholders.

Otherwise, they will only do things that are in their own interest, and will be inactive, lazy, or plain deceitful... ” Freek Vermeulen @
Harvard Business Review 2009⁠
⁠

I would add that team “will only do things that are in their own interest, and will be inactive, lazy, or plain deceitful..” because top performers or principals would be wiped out by agents. Stocks empower principals and discourage agents. Because principal’s utility function value future impact for clients, while agent prefer short term benefit of comfort and lack of responsibility.

Ask yourself, is your teammate value comfort and lack of responsibility today or her prefer to grow to benefit clients in the future. Or in monetary terms, is her value monthly pay check or stock options? In other words, does her put clients first, ego last?

Agent will hire weaker people as is afraid of competitor for his position and salary. Principal will hire stronger candidate to maximize probability of the company to succeed which increase his stock payoff.

Decrease monthly pay-check to wipe out agents and overpay to principals with stocks

Still, some agents may both value equity and prefer Free rider strategy where others grow capitalization while her is blurring her underperformance. Ambiguity of innovation undermines startup's performance transparency despite of smaller team size. Startups create new professions which have no performance benchmarks or direct metrics to measure her performance. Is her task really doable?

This mean an agent can mislead others with her actual results or find excuses why desirable results are impossible. If such teammate earn the same stock options while making less investment with effort, then why would other teammates pursue a different strategy? Effort now seems as a loosing strategy to Free riding strategy. Effort is not a Nash stable strategy anymore.

Furthermore, transparency will decline with acceleration when cooperation to cover each other give additional advantage. Team will sneak to adequate performance killing startup’s advantage over legacy companies to seize market share. Stock value is nothing now. Remaining principals quit.

Be the principal and force agents out

Agents cover each other when they know details of execution unknown to principals. They leverage asymmetry of information to benefit themselves at expense of principals. That is the definition of an agent. Asymmetry of information is the root cause of the

principal-agent problem⁠

(part of contract and mechanism design theories - 5 Nobel Awards in economics: Arrow 1972, Muskin 2006, Hart & Holmstrom 2016, Milgrom 2020)

If you react on weak performance, misleading statements, excuses - you are likely to be principal. Other principals are interested to reward you with greater stock bonus if you will increase value of all stocks. Principals are interested to push agents out and redistribute their unvested stocks between remaining or new-coming principals. At the same time founder and investors can not get stocks of pushed out agents as team stock pool is fixed at 20%. So they have no other interest then to maximize stocks value by optimizing team pool between principals. The team of principals have even stronger incentives to push agents out as they get both stocks value growth and get more stocks (of pushed out agents).

Principals are the main LATOKEN asset. Principals are your main asset as you are a stakeholder of LATOKEN. Remove asymmetries of information and agents. Do not tolerate lack of effort and adequate performance. Give brutal open feedback. Grow as a Principal!

To sum up, we overpay to encourage those who:

challenge lack of transparency and performance or excuse seeking or fake work

hire and grow leaders who are stronger than herself

lead hackathons and grow over weekends

volunteer as a scrum master

show initiatives outside of your current scope, after you really done your job greatly

If you do the above and do not feel overpaid - tell to supervisor or
`ceo`⁠
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Factor in growth⁠

In startup land, the company you pick is more important than everything else: it’s more important than the role, it’s more important than your salary, and it’s more important than the projected value of your equity grant. Look at
the guy who painted the walls⁠
on the original Facebook office. As Eric Schmidt told Sheryl Sandberg when she was considering joining Google, “if you are offered a seat on a rocket ship, get on—don’t ask what seat.”

Which of these statements are correct accordingly to the above text:

Which of these statements are correct accordingly to the above text:

Idea

Vote if correct

Lack of clarity of performance help principals to flourish

👍

Free Rider does not highlight her high performance

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Agent maximizes value for client

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Principals blur performance

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Principals cover each other

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Principals challenge teammates to make stories grandma clear

👍

Principals prefer to discuss persons they disagree with at their absence

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Stocks options are less important than salary for principals

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Principals are brutally candid and open to give and receive feedback

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Agents help each other to look better

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Principals do not tolerate low standards

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Target value of your stock option is within 10-10000x of your 5 year labour market salary

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Performance should match reward

👍

There are no rows in this table

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This link can't be embedded.⁠

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https://www.indexventures.com/optionplan/#pre_funding_valuation=17000000&initial_amount_raised=2000000&expected_funding_rounds_pre_exit=series-b&estimated_exit_valuation=1000000000&employee_country=uk&option_allocation_level=2&mode=seed⁠

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