“The first thing you do is you figure out how valuable your company is (we call this “best value”). This is NOT your 409a valuation (we call that “fair value”)…

The second thing you do is break up your org chart into brackets. There is no bracket for the CEO and COO…

When you have the brackets set up, you put a multiplier next to them. There are no hard and fast rules on multipliers. You can also have many more brackets than four. I am sticking with four brackets to make this post simple. Here are our default brackets:

Senior Team: 0.5x

Director Level: 0.25x

Key Functions: 0.1x

All Others: 0.05x…

Then you multiply the employee’s base salary by the multiplier to get to a dollar value of equity. Let’s say your VP Product is making $175k per year. Then the dollar value of equity you offer them is 0.5 x $175k, which is equal to $87.5k….

Then you divide the dollar value of equity by the “best value” of your business and multiply the result by the number of fully diluted shares outstanding to get the grant amount. We said that the business was worth $25mm and there are 10mm shares outstanding. So the VP Product gets an equity grant of ((87.5k/25mm)  * 10mm) which is 35k shares.”

Even though I hate behavioral interview questions and think they’re abused, I think there are some gems in this list that could be useful to interviewers if used properly.

A good outline for how to structure your interview questions. When you know this is the information you’re trying to learn, it’s easier to know what to ask to learn it.

My takeaways:

• Pick a day of the week where you focus on vocalizing the positive contributions team members are making to the company. Make it a habit.
• Feed them. It’s a fancy perk that doesn’t have to cost a lot.
• Know your team’s 5 top personal goals

Hiring and Firing for Entrepreneurs by David Teten

Lots of very good relevant advice and lists other resources for how to hire at a startup.

Yes, it turns out he became one of Foursquare’s earliest employees by cold-emailing Dennis and Naveen and selling them on what value he could add. 

I think it’s interesting that he sent 8 emails before Dennis finally consented to talking more about possibly bringing Tristan on. I don’t know if Dennis at least replied with “no, thanks” or “not right now” before that 8th email, but I’m not sure I would have cold emailed someone that many times, without receiving a response, before I decided that they really weren’t interested.

One of my resolutions in 2011 is to be more bold. I think cold emailing someone past my comfort zone of “I’m really annoying this person” is a good example of boldness.

At the end of the day one must ask “What’s the worse that could happen if I send this 8th email?”