Equity: Give It Up (Or Outsource)
The Business of Food
by Jennifer Barney
Equity: Give It Up (Or Outsource)
SALES FUNCTION PART III
1-min read
If you’re considering offering equity to your founding team should that include the salesperson? Of course! But, how much?
Equity Compensation
As part of the founding team, you’ll want your salesperson to participate in the long-term success of your brand. Even if you do all the things to ensure you’ve hired the right person, you’ll never really know until you start working together.
Vested equity with a cliff is an appropriate way to offer this incentive while protecting your interests. A vesting schedule can be a four-year benchmark with a one-year cliff: no ownership until they’ve worked for one-year, then 25% for each year thereafter until fully vested.
How much total equity to give away to team members can vary, but many startups are advised to set aside ~10%. Your first layer of executive-level roles may get half of that, so consider 1 – 2% for 3 – 5 executives. Of course, talk to your advisors and legal counsel before making any commitments.
No thanks, I’ll outsource.
Outsourced Sales Consultants
If you decide not to bring on a full-time salesperson just yet, you can outsource the sales functions. Not a broker, but a sales consultant that works as your inside rep that will do the job of selling, executing and analytics. If this is the way you plan to go, interview them in the same way you’d interview an employee, and plan to manage them accordingly.
P.S. Looking for one based in California? Contact Jason at Webb Focus Group
All my best,
Jennifer
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I'd love to hear from you - get in touch at jennifer@3rdandbroadway.com