VC Cliché of the Week
One of my favorite cliches is "there is no such thing as indentured servitude". I use that line to talk about the fact that talent can’t be bought and sold. It must be retained with something more than money.
You can give someone a big fat paycheck and a big slug of equity but if they don’t believe in you, your company, your vision, your team, and your culture, its a total waste of money. Because they will be unproductive and have one foot out of the door all the time. And when someone else offers them that big fat paycheck, they’ll be gone, leaving a hole in your organization.
I see this all the time in acqusitions. Big companies lock up entrepreneurs with earnouts, traunched payouts on equity, vesting, etc. So they "stick around" to get paid. But are they really doing anything of value for the buyer? Maybe, but I’d bet that they are mostly marking time. Entrepreneurs are entrepreneurs. Golden handcuffs can’t change a person’s DNA.
So you must sell your people on what you are doing. Take them up the mountain. Get them excited about the climb. Get them to buy into the vision. And keep selling the vision, the culture, and the company. Sure you have to pay your people their market value. People won’t work for free either. But paying market value is surely not enough to keep your best people. Because there is no such thing as indentured servitude.