Finding the right way to compensate workers is difficult.

As the founder of a startup, you need to think about several things in how you compensate workers with equity:

You want to save on cash: You live and die on your company’s cash runway. The more you can pay in equity, the longer your lifecycle.

You want to align incentives: Early workers are critical to your success, but only if they stick around. Even if they eventually leave, you want them to have an incentive to work toward long-term success, not just up until the day their shares vest.

You want to protect your control: Each time you give a piece of your company away, that’s less control you have from that day which means more complexity for future fundraising.

You want to give everyone a fair chance to share in success: Startup workers take on extra risk to help you. They should have commensurate rewards with the company’s success, and not with fluctuations in the company’s price.

You want it to be simple and easy: You and your workers don’t have the time to build a complicated financial plan to best optimize stock options. You don’t want people to pay unnecessary taxes or end up with something that costs them money.