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Vishu Bheda
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Medial • 1y
Vinod Khosla and Sam Altman on how much equity to give your first 10 employees Vinod Khosla, co-founder of Sun Microsystems, shares a simple but powerful tip for startup founders: offer generous equity to attract the best people. When Sun started, Khosla brought in top talent like Andy Bechtolsheim, Bill Joy, and Eric Schmidt by giving them significant equity, even if it meant keeping less for himself. At Sun, the founders kept only about 25-27% of the company. Another big portion went to future employees, and 40% went to investors after the first funding round. Khosla says this was a smart move because great people made Sun successful. When advising his son Neil on his startup, Khosla told him to keep just 15% for himself, offer top hires up to 15%, and set aside 30% for other employees. His reason? Talented people are “magnets”—they attract more amazing team members. For example, Khosla gave Bill Joy half his equity because Bill’s reputation drew other great hires, like Eric Schmidt. Sam Altman agrees: being generous with equity for early employees can make your company much stronger. Khosla says this is the most important thing to do in your startup’s first six months. Focus on building the best team, even if it means giving up more equity—you’ll grow a bigger, better company. Follow me for more valuable startup insights from the best founders!
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