Founders in Silicon Valley often justify their significantly larger equity stakes compared to early employees by citing the risk they took in starting a company. However, a lesser-known practice called founder liquidity allows founders to sell shares during new funding rounds to secure financial stability while employees remain all-in. This lack of transparency leads to misconceptions about the risk landscape within startups. The author, a former employee turned founder, seeks to balance the scales by being transparent, generous with equity, and offering liquidity to employees. They advocate for more transparency around founder liquidity to empower employees to make informed decisions about their risk profiles.
https://www.stefantheard.com/silicon-valleys-best-kept-secret-founder-liquidity/