Here is an example I made to help me understand it.
Say SuperAwesomeStartup had a system like this, and the threshold was an ungodly high amount of 50 million dollars. The company IPOs and is worth 100 billion dollars.
Founder X owns 10%, Founder Y owns 8%, Founder Z owns 6%, Early Employee A owns 1%, Early Employee B owns 0.5%, Early Employee C owns 0.25%
And there are 5,000 employees of the company
Before After
Founder X 10B 5.02B
Founder Y 8B 4.02B
Founder Z 6B 3.02B
Early Employee A 1B 525M
Early Employee B 500M 275M
Early Employee C 250M 150M
Amount Distributed to each employee: 12.72B / 5,000 = 2.5 million each on avg
That is awesome. Though obviously very very few companies ever become worth 100B, it is a great example of how spreading the wealth from the founders makes little impact to them and a massive impact to everybody else.
Say SuperAwesomeStartup had a system like this, and the threshold was an ungodly high amount of 50 million dollars. The company IPOs and is worth 100 billion dollars.
Founder X owns 10%, Founder Y owns 8%, Founder Z owns 6%, Early Employee A owns 1%, Early Employee B owns 0.5%, Early Employee C owns 0.25%
And there are 5,000 employees of the company
That is awesome. Though obviously very very few companies ever become worth 100B, it is a great example of how spreading the wealth from the founders makes little impact to them and a massive impact to everybody else.