Companies evolve from a seed idea to a developed product to an adopted product surrounded by excitement and passion. Ultimately, they evolve into a sustainable, long-term business, which is where Kabam was entering four years ago. It had tremendous success in cultivating a strong management team and became a more mature company.
There’s a difference in philosophies of compensation as you become more mature and stable. You have to be thinking about yourselves in the context of your competitive peer group and start looking into ways to motivate current and future employees.
For existing team members, they have a greater sense of where their companies are at and that they won’t be getting a big pop in the value of current options or the granting of new options. They become more focused on the value of their vested shares and when and how they’ll get liquidity.
For prospective hires, If you are competing for talent, you need to consider their perspective. Those you’re hiring would otherwise go to public companies in your space. They’re not of the same mindset as those who would join an early stage company with the idea that their options are going to appreciate 10x, even 100x. For a later-stage company, new hires tend to be looking at the actual liquidity of the stock they will be granted upon hire.