With emerging companies I am often asked about equity and stock options for employees. That process is often complicated and costly. Usually the reason I hear favoring the equity / options approach is that employers want their employees to "feel like they are a part of something." An admirable goal ineed but are equity /options necessary to achieve this goal?
Mike Colwell of the BIZ recently referenced on his blog a post by Jason Fried of 37 Signals. I highly recommend you read Fried’s post on "An Alternative to Employee Options / Stock Grants."