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LATEST POSTS 📚

If you’re new, not yet a subscriber, or just plain missed it, here are some of our recent editions.

💳 Piloting Mercury Through The AI Era. An interview with Ryan Wiggins, VP of Product at Mercury.
🔥 Startmate: The First Yes A Founder Hears. An interview with Phoebe Pincus, CEO at Startmate.
🧪 How To Crush Your AI Search Goals. Nobody has solved AI search yet. Here's what's held up at Athyna so far.

PARTNERS 💫

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HOUSEKEEPING 📨

I looksmaxxed a passport photo I took from Argentina a couple of years ago for a possible new mean-mugging profile image. Left was original, middle was tidied up (better lighting, skin looks better), right was “now make me a little more tanned.” Sounds funny and is easy to do with AI, but looksmaxxing isn't just a viral buzzword. It’s an entire fleet of startups.

I stumbled upon Quoves recently, a company with the tagline, “Get your personalized facial analysis and transformation plan based on your unique features,” used by 50,000 people. I’ve seen two or three more lately, too. Crazy times we live in. Will looksmaxxing be normal in 2030? I wouldn’t be surprised.

BUILDING IN PUBLIC 🔎

People First Equity Plans

Stubbing my toe in the night; people who chew loudly; Joffrey Baratheon; you know what they all have in common? They annoy me. You know what else I find annoying? Badly put together equity plans. Plans that are so negative-sum you’d be an idiot to execute them.

Conversely, there’s nothing I love more than when I see a company that has taken the time to build a truly open-handed, equitable, and accessible package for their people. It’s one of the great things about being a startup: you can share not only the blood, sweat, and tears, but the joy, the wins, and the results. Today, we are talking equity plans.

A few years ago, I was interviewed by one of the founders of cap table management startup Cake Equity about Athyna’s equity plan. A plan that Jason—who has seen every plan under the sun—called the world’s best. I was interviewed again on the same plan, in front of an audience last week.

A question I received was, “What are the benefits of giving so much equity to your team?” My response was simple: “When we win, I want us all to win. And to be honest, I want to feel like a hero.” So strap yourself in, dear reader, while we take a bullet train to Give Your Company Awaysville, USA. Let’s do this!

The first equity grants

The Dutch East India Company pioneered the financial instrument that made it the world’s first publicly listed company in 1602. While employee equity as an idea isn’t quite as old, equity grants aren’t exactly new either.

A quick Google search will tell you they go back to early pioneers like Benjamin Franklin, who set up profit- and ownership-like arrangements in his printing shop in 1733. Franklin had a love for his foremen and would let them take over and run his franchises with a shared financial reward for doing so.

Many years later—first in 1921, and then later in 1950—the U.S. government would create a framework for stock bonus plans and, later, tax-advantaged options for the executives of the time. Louis Kelso would go on in 1956 to create the first Employee Stock Ownership Plan (ESOP), to help employees buy out the aging founders at Peninsula Newspapers, Inc.

_{*Rumor has it that employees at Nvidia, Anthropic, and OpenAI see Louis as a deity, and pray to him each night.}

Silicon Valley was fast to adopt the employee stock, with firms like Fairchild Semiconductor (1957) using options as a core mechanism to attract and reward the best technical talent in the area. So, really it’s been 70 years of employee ownership, and in 2026 equity is still a huge part of how smart operators pick their next home

Why listen to me on equity?

You are listening to me on this topic because you subscribe, and therefore I have the power to force my ideas upon you; but fret not, I know a thing or two about equity, comp, culture.

Athyna, my startup focused on tech hiring and post-training (RLHF, red teaming, datasets), has an average engagement score of 91%. To put that into perspective, 80% is considered excellent. I often say that if 80% is excellence and 100% is perfection, we oscillate somewhere in between. A large part is due to our equity plans.

Why does that number matter? Beyond creating a fun environment to work in, Gallup's meta-analysis of 183,806 business units found that top-quartile engaged teams are 23% more profitable, 18% more productive, and have 21% lower turnover than bottom-quartile teams.

I am a simple man. Although I have an above-average beard, I’m not particularly smart, handsome, or eloquent. But I’ve been somewhat successful to this point because I have overindexed on two things: brand and culture.

A strong brand makes you a destination company for the best talent. You have an overflowing abundance of genius-level operators busting your door down to come work with you. That’s half the battle. The other half is culture. Brand gets people in the door, but culture motivates them to do their best work. Not only that, once they feel part of the company, they will bleed to uphold and build on said culture.

But there is a reason a founder is more inclined to pick up a call in the middle of the night when the house is on fire: ownership.

The good news is, you can proliferate that feeling through the organization very easily. Let’s dive in, and I'll show you how to do that in a few simple steps.

1/ Build the perfect plan

Before you start your equity plan journey, you need quality help. Especially if you are like us and have team members in multiple countries worldwide. We worked with DLA Piper, recommended by Blackbird, one of the Southern Hemisphere’s leading funds, in which I’m a limited partner. DLA Piper handled international equity plans for Canva, Atlassian, and other great Australian companies, hence the recommendation.

Equity planning isn’t something that should be taken lightly, but at the same time, there can be some sticker shock to it; I believe our plans cost upwards of $25,000 to set up. Not an insignificant figure, especially for a scrappy early-stage firm.

2/ Decide on structure

This is the most important part of your plan. Most equity plans are designed by lawyers, for investors, to be forgotten by employees. 10% pool, options, four years, one-year cliff, 90-day window, tax bill on exit. Two-thirds of U.S. startup employees never even collect. This, in my opinion, is bullshit. If you work at Athyna, we don’t offer you the chance to buy into the company at a time convenient to us; we gift you part of the company. Work hard, be rewarded; it’s that simple.

The idea of equity is that it should provide value and give people ownership-level outcomes if the company does well. But what if it doesn’t? You’ve asked a young employee to take a risk and exercise their options on something that is far from a sure thing—an illiquid asset—with the likely outcome being no outcome at all, actually hindering their chance at a better future.

Plus, how many young people trying to get ahead have the money sitting on the sidelines to deploy once their equity has vested? Not many, I’d argue. At Athyna, our first pool was 20% of the company, compared with the standard 10%, and we used RSUs, meaning we gave the stock free of charge rather than sending a bill for the options.

3/ Decide who gets rewarded

The decision of who gets equity should also be an easy one. If you work at the company, you get equity. At least, that’s how we did it. If you work with us, whether you are a first-year intern or a seasoned executive, you get stock in the company.

This doesn’t mean we don’t have different-sized grants for different people. Our first few employees got 1%, the next handful 0.5%, and so on. We also gift 3-4x larger grants depending on seniority or irreplaceability (as Cat Strydom called it in my recent session with Startup People Summit). The point is everyone gets rewarded.

4/ Decide when (and how) they get it

Most stock plans have a standard shape: after 11 months, no equity has vested. At 12 months, you get the first 12/48ths of your equity, and then every month thereafter, up to four complete years. This means you have some very happy campers at month 13. But that smile can turn into a gargantuan frown at month 48, when your team member exercises and gets hit with a huge tax bill on their new, shiny stock grant.

This isn't always the case, and it can differ by jurisdiction, but in many cases, once an employee exercises their right to buy the stock, they trigger a taxable event, whether it’s illiquid or not. In cases like this, it can be crippling. Imagine a company you work at went from a Series A valuation of $40M to a Series D valuation of $1B. If you were issued $50k in stock at Series A, your stock could likely be worth well north of $500k (after dilution from subsequent rounds) when your vesting is complete.

Great, right? Well, kinda. If done poorly, this share issuance would be taxed at your marginal rate—call it 35% in the U.S. or 47% in Australia—so a $500k windfall would require you to pay $175-235k in tax. For illiquid stock! Again, I go back to my earlier point: we are trying to help people get ahead. Not only people who can afford it, but young people too.

Luckily, there is a solution: the double-trigger vesting clause. Facebook used it before its 2012 IPO; then Dropbox, Lyft, Pinterest, Uber, and Slack followed for the same reason: their people couldn't sell shares to pay the tax on shares. It means you don’t technically own the stock until the exit event, but illiquid stock offers little benefit anyway.

If you really want to look after your team again, you can also grant them an outright clause for dividend payouts. We did this also at Athyna. It’s in our plans that, should we decide to pay dividends—which it’s worth noting, we don’t plan to anytime soon—I can personally override the fact that they don’t own the stock and can pay them ‘phantom’ dividends equivalent to their stock grant. I will do that if we decide to pay dividends. Again, work hard, get rewarded.

5/ Educate, educate, educate

One of the oft-underappreciated elements of a great equity plan is education. As you may have guessed by now, the idea is to be very giving with your team, but that doesn’t mean you shouldn’t factor in the benefits for the business as well.

Remember: this all started with us talking about how to get people to think like owners and care deeply about the business. That’s impossible if the employees don’t understand how their equity works. Sadly, for many companies, this is the case: stock is granted day one, but then it feels like an afterthought.

Financial firm Charles Schwab surveyed employees who actually hold equity and found only 28% could put a dollar value on it, and only 32% understood the tax side. Meanwhile, 76% said it was very important to them. So every 18 months or so (fine, the last one was closer to 24), we sit the whole team down for Equity 101. What equity is. What an RSU is and why it isn't an option. What happens if you leave. Where your numbers live. What your slice looks like if we keep growing. Then questions, including the awkward dilution ones.

It’s around eight slides and one Michael Scott meme. And it’s the best afternoon of ROI you’ll find, because if they don't get it, you've been generous and got nothing back. Win for the employee, sure. Not a win for the company.

6/ Refresh as required

I have a friend who worked at the Kiwi accounting giant Xero and, after a few years, was ready to move on. He really loved Xero, but wanted to work at Google, Amazon, or OpenAI. He had the skills, the resume, and even the offers. What kept him there was sizable equity top-ups every year, which put him firmly in what's come to be known as the ‘Golden Handcuffs.’ He stayed for 10 years.

Think of all the institutional knowledge that would have walked out the door if he had left. But he didn’t. He felt like an owner, and he understood the upside. His early, and renewed, equity at Xero led him to buy (the best part of) a house in Melbourne, Australia.

Most companies technically do this. 79% offer refresh grants to at least some non-executives. But the grants have shrunk to the point of being decorative: in 2023, about half of refreshes were worth at least 50% of a new-hire grant. By late 2024, that was 5%. At Athyna, we have had a couple of rounds of equity top-ups in the past; I’d recommend doing them every two years for the most impactful, irreplaceable, and longest-tenured members of your team.

Summary / Future

A good buddy of mine asked me about my culture strategy once; when prepping this piece, Claude reminded me of my reply: "I don't have a culture strategy. Culture is the art of treating people well, nothing more. It's the sum total of a million little acts and decisions that you make over time."

Most founders who have an exit walk away with their needs met and their lives changed; it’s rarer for employees to share in the spoils. Imagine walking away from an exit, knowing early employees will use the proceeds to buy a house. Exiting and looking after yourself makes you a success. Exiting and bringing the team with you makes you a hero.

Extra reading

• How Athyna Makes Remote, Work - January, 2024

• The Perfect Onboarding In 7 Simple Steps - May, 2024

• How (This & Other) Newsletters Make Money - November, 2024

And that's it! You can follow me on Twitter and LinkedIn, and also don’t forget to check out Athyna while you’re at it.

BRAIN FOOD 🧠 

TWEETS OF THE WEEK 🐣 

TOOLS WE RECOMMEND 🛠️

Every week, we highlight tools we like and those we actually use inside our business and give them an honest review. Today, we are highlighting Svix—a webhooks-as-a-service platform that helps developers send secure, reliable, and scalable webhooks.

See the full set of tools we use inside Athyna & Open Source CEO here.

HOW I CAN HELP 🥳

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