View from the Valley: Ownership, not money, makes the Valley go round
Most people head to the Valley in search of more than just cash, writes AdGent Digital's Cameron Yuill.
Cameron Yuill, chief executive of Adgent Digital
Last week two guys I have worked with in the past became seriously wealthy. ‘F-off’ wealthy, to be blunt.
One is an executive at one of the recent famous start-ups, the other an entrepreneur who sold part of his company - a company I bet none of you have heard of - to a private equity fund.
Both guys have been working in and around the start-up world and the Valley since the late 1990’s.
It’s the American dream come true. Work hard, get rich. Or is it?
While there are, no doubt, people drawn to Silicon Valley for the chance of ‘becoming rich’, I believe most people come here for something far less tangible.
They come because it is the chance to build something new, the chance to be part of the greatest business incubator on the planet and the chance to change the world.
And, they come because it is also the opportunity to say, "I was part of that". It is the chance of ownership.
You might be the entrepreneur who starts the company, the investor who backs the company or an employee who helps build the company. In all cases, you will inevitably own a piece of the company.
And you don’t have to own 100% of the company. All Silicon Valley start-ups set aside stock for their employees in the form of option grants.
Usually 20% of shares of the business are made available for employees.
I know of nowhere else in the world where stock option pools are part of virtually every company. It is this ownership that can make you seriously wealthy.
I have a friend who owned just a slither of Facebook - he never has to work again.
I was reminded of the importance of ownership last week when my friends ‘cashed out’ and when I received an email from a company asking for my address. When I asked why I was told it was to update the company’s share register.
Almost 10 years ago I did some work for them. As payment for my services I received options. Subsequently, the company merged with another company and my options vested.
Last week, it paid a dividend for the first time - a very large dividend of which I received a very small piece.
It put a smile on my face, a little money in my pocket and reminded me that ownership is what makes Silicon Valley a truly unique place.
Cameron Yuill is chief executive and founder of Adgent Digital and is based at the company's Palo Alto offices.
Follow Cameron on Twitter @cameronyuill
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