Be an owner – prioritize equity

Thankfully, my first job out of college was at one of the most important companies of our time – Google. It was also the first stock that I owned and I owned it because tech companies typically give all employees some stock (stock options in earlier stages and Restricted Stock Units at later stages) that vests (becomes theirs) over some period of time. Typically, you have to work at least a year at such a company for some portion of the stock to vest (typically one quarter of the initial grant because the most common vesting period is four years).

I started working at Google before it was a huge public company. Over time, as the company went public, more of my stock vested and the share price grew, the equity portion of my compensation became more meaningful. My initial cash compensation was only $35K/year, though that also grew over time but not as fast as the value of the equity.

So that first job gave me my first taste of ownership. Although I was a junior employee, I benefited from the success of the company just like the CEO, although on a much smaller scale. Of course, everything is relative and for me, it was an amazing start. The other thing Google gave me was a crash course on equity compensation and investing more generally. I had to understand how my equity worked so I learned all about it (tax implications, etc). Google also brought amazing speakers (like Jack Bogle of Vanguard) and offered personal finance classes. Since many people generated significant income from the stock, I think Google’s leadership team thought it would be appreciated if they offered some guidance about what to do with the new found cash.

Since then, I only worked in companies that give equity, except for one year and a summer in management consulting. That was a pure investment of my time into building out the consulting skill set that I thought would be helpful in my business career. It was painful to not get any equity but I am glad I had the experience.

The other two tech companies I worked at after Google either went public (now worth ~$15B) or was acquired (for ~$8B). I now work at a new early stage company that I hope to help grow to success.

It’s not just money and the feeling of ownership that drives me. I love building companies and growing myself in the process. That is also the other advantage: with experience, my equity % has been increasing (size of stake typically grows the more senior you get and the better you are at valuing the equity and negotiating it).

You don’t have to be a founder to own pieces of companies, but it really helps to own parts of companies and not just work there if you want to build wealth. I think of myself as an investor: investor of money and time. I invest my time in companies as an investment in their and my future.