This is a trick an investment banker told me about when I was about a year out from selling my company and didn’t want to bring in an expensive C-Suite. 1) Set up a phantom equity pool for your people. Phantom equity is a way to give them a one time bonus in the event the company sells. It makes it very easy to say “Hey I want to sell this business one day and I want you to get a piece of the upside.” 2) Phantom equity usually becomes 10-15% of the sale price and becomes a great tool to attract talent that is interested in exiting (Mine was 5% since we didn’t bring new people in). 3) When the company sells for $1M and you have net proceeds of $900k (Assuming $100k in debt/payables) $100k gets allocated to the phantom pool and divided amongst the employees. 4) They get all the benefits of ownership in a liquidity event without you having to give up voting rights, 83b elections, and all the other complications with trying to incentivize through common stock. #businesstricks #financi...