The Skeptics Journey

Throughout my early career in the tech industry, I heard a consistent refrain: 

"You can’t build significant wealth working for tech equity compensation.”

“ It is all just a gamble!”

 Experienced technology executives and family warned me about the high failure rate of startups and the inherent risks of equity compensation. 

Their advice was clear: stick to a steady salary and traditional investment methods.

But something didn't add up. 

I kept seeing examples of people - some friends, some acquaintances - building significant wealth through equity.

 It was happening before my eyes, but I couldn't figure out how they were doing it.

After experiencing a failed startup in 2010, I was at a crossroads. 

The conventional wisdom seemed validated, yet I couldn't shake the feeling that there was more to the story. 

I needed to understand how some people made this work when so many others failed.

The Unconventional Research Method

In 2011, I embarked on an unconventional journey to find answers. I turned to LinkedIn, which was then a much simpler professional networking platform.

 My mission? 

To connect with strangers who had "been there and done that" - people who had successfully built wealth through equity in companies I admired.

I started reaching out for "informational interviews," asking these successful individuals how they chose the companies they worked for.

A common theme quickly emerged: due diligence. These professionals weren't just chasing exciting ideas or hype; they were evaluating companies like investors.

The Success Formula: 3 Key Strategies

Through my research and conversations, I identified three critical strategies employed by those who successfully worked for equity:

1. A Rigorous due diligence process to evaluate companies and remove emotion 

   • Public Company Due Diligence (LINK)

   • Private Company Due Diligence (LINK)

2. Leverage skills to maximize equity compensation

   • Build Skills to Trade for Equity (LINK)

3. Understand that valuable equity is liquid and growing in value

   • Tech Equity Fundamentals (LINK)

The Mindset Shift: Think Like an Investor

The most crucial insight I gained was this: successful equity-builders think like investors, not just employees.

This mindset shift changes everything:

• It provides a framework for decision-making that removes emotion.

• It helps align risk with personal goals.

• It encourages networking with like-minded professionals who can provide valuable insights and opportunities.

Ask yourself: How might your career decisions change if you started thinking like an investor rather than just an employee?

Real-World Success Stories

Let's look at some real-world examples of professionals who have successfully leveraged equity for wealth building:

(Included are Links to their Interviews, Check them out!)

Bryan Wise (LINK):

Bryan's story is a testament to the power of persistence and strategic thinking.

After working for a public company for 8 years, he took a calculated risk and joined DocuSign. He then moved to Snowflake, and finally to GitLab, guiding each company through its IPO.

That's three IPOs with three different startups!

Bryan's strategy involved carefully selecting companies with strong market potential and clear paths to liquidity.

He didn't just jump at any startup opportunity; he conducted thorough due diligence and only committed when he saw genuine potential for significant value creation.

Ritendra Datta (LINK):

Ritendra took a different approach, building significant equity by working for tech giants Google and Meta before moving to DataBricks.

His strategy focused on joining established companies with high growth potential, allowing him to benefit from both stability and upside.

Ritendra's journey shows that equity-based wealth building isn't just about joining early-stage startups; it's about identifying companies with strong growth trajectories, regardless of their current size.

Christopher Nelson (LINK) :

My journey exemplifies how to leverage equity across different career stages. I started by building expertise at an established company, Accenture (with no equity comp), then transitioned to high-potential startups.

My strategy involved carefully timing moves to maximize equity growth. By building a strong foundation of skills and industry knowledge consulting to tech companies, I was able to take on senior roles at startups, negotiating larger equity packages.

Also I targeted companies that were 12 to 24 months from IPO with my SOX experience.

This approach ultimately led to significant wealth creation through multiple successful exits.

These success stories highlight that working for equity can be a viable wealth-building strategy across various company stages and industries.

From Equity to Exit: A Framework for Success

Based on my experiences and research, I've developed a framework called "From Equity to Exit" to help professionals navigate this path:

1. Expertise: Invest in your skills and grow them to a level where you can build a brand and business around them. The more valuable your skills, the more equity you can command.

2. Equity: Trade your rare skills for valuable equity that is liquid, growing, and can be traded at any time. Focus on companies with clear paths to liquidity events like IPOs or acquisitions.

3. Evergreen Portfolio: As your equity becomes liquid, diversify. Build a portfolio that generates income to cover your expenses, allowing the rest to grow infinitely.

4. Exit Plan: Manage a clear plan to build skills, grow wealth, and run your portfolio as a business. The goal is to transition from your W-2 job to your impact role - whether that's founding your own company, becoming an investor, or focusing on philanthropic work.

Addressing Common Concerns

As you consider this path, you'll likely encounter some doubts. Here are answers to common concerns:

1. "Isn't working for equity too risky?"

   While there is inherent risk, proper due diligence and diversification can mitigate it. Remember, even traditional jobs carry risks like layoffs or company failures.

The key is to make informed decisions and not put all your eggs in one basket.

2. "How do I know if a company's equity will be valuable?"

   Research the company's financial health, market position, and growth prospects. Know that valuable equity is liquid and growing in value.

Talk to industry insiders and don't be afraid to ask tough questions during your interview process.

3. "What if I'm not in tech? Can I still use this strategy?"

   While tech companies often offer the most equity opportunities, many industries adopt similar models.

Look for high-growth companies in your field that offer equity compensation. The principles of due diligence and strategic career moves apply across sectors.  

Your Path to Financial Independence

By trading your skills for equity, you can accelerate your journey to financial independence.

Remember, this path is open to all professionals who can build valuable skills that companies need, not just engineers.

As you embark on this journey, keep learning, stay informed about market trends, and don't be afraid to take calculated risks.

Your skills are your greatest asset – invest in them wisely, and they can open doors to significant wealth-building opportunities through equity.

Ready to start your equity journey?

Start your path to financial independence through equity starts now.

The question is: are you ready to take that first step?

Tech Equity & Money Talk is a Weekly Podcast that explores the process of building wealth through Tech Equity and managing the money that comes with it.

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How I turned my 2010 startup failure into a framework for building tech equity (and why it’s the shortcut to real wealth)

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Disclaimer: This newsletter is for informational purposes only and does not constitute financial or career advice. Always consult with qualified professionals before making any decisions based on the information provided.