How partners get paid.
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Invisible is a partnership. This is how partners get paid…
Equity.
Partners receive an initial stock option grant upon joining. Right now, these start at ~0.5% for junior hires, ~1.25% for mid-level hires, and ~2.5% for senior hires. That is generous. Startups at this stage typically offer less than 1% for all hires. We’re doing this to create an ownership culture.
Profits.
We use gross profits to pay partner salaries. No profits, no salaries. Investor dollars are not for salaries. The company is roughly break-even, but as our partnership grows to 30 partners, we won’t make our full salaries until we hit a $3M annual revenue run rate — which we believe we can do by the end of the year, if operations can keep up with sales. The more partners we add, the larger our annual run rate needs to be to keep maxing our salary caps.
Salaries.
There are five different partnership tiers, and each one has a salary cap: Tier 5 at $1K a month, Tier 4 at $2K a month, Tier 3 at $4K a month, Tier 2 at $6K a month and Tier 1 at $8K a month. That is the maximum amount of money you can make in a month. Nobody makes more than $96K a year on salary.
Bonuses.
Right now, we’re not awarding bonuses. But in the future, the company may decide to award additional cash or equity bonuses to partners, either individually or as a group, as rewards for loyalty and exceptional work, or as incentives for certain behaviors and objectives.
Dividends.
We use 100% of profits to pay salaries until they’re maxed. After they’re maxed, we split profits 50/50 between a shareholder dividend and the company’s warchest. That’s right. If you own shares, and profits are high enough, you will also get a dividend. The more profitable we are, the larger that dividend will be.
Warchest.
We don’t use the company’s warchest to pay salaries, because we run our operations profitably. We only use the warchest for discretionary variable costs like marketing and business development. As profits go into the warchest, they fund various budgets. The rule for using these budgets is that more money has to go in every month than comes out. They have to grow.
Benefits.
Once profits are large enough, we’ll fund benefit budgets in the warchest. As these budgets go, benefits will grow.
