Giving Out Equity and Getting to Work with Lisa Magill of Equity Directory
Lisa Magill is no stranger to co-founding a company, but her experience with launching Equity Directory is unlike any other before. Her latest venture is an invite-only network of entrepreneurs and startup talent exchanging work for equity.
“My career had always aligned with technology and software,” Lisa shared. With a start in financial services and later managing marketing strategy and sales, Lisa didn’t get into startups until an acquisition had her thinking about switching things up. “My day-to-day and who I worked with was going to change anyway, so it seemed a good time to find something that was new and challenging.” Lisa related.
Through a friend, Lisa was connected with a startup team that created technology for financial service companies. Lisa’s experience matched up and she spent four years at the company where they launched PointDrive, which was recently acquired by Linkedin. Over this time, Lisa also began working on several different passion projects that revolved around helping entrepreneurs along their journey. One of which was Ms.Tech which Lisa co-founded to empower and support female entrepreneurs.
Colin Vincent, Lisa’s co-founder, came across her work when he found an ad for one of her webinars. At the time they were both working on businesses that aimed to help early stage startups overcome common challenges. It was clear from the first conversation that their passions aligned. Lisa recalled, “We had a conversation about startups we were working with, their pain points, and what more we could do to help.” Coming up with the idea for Equity Directory, based on problems they knew startups to have, they put up a landing page to test the market for potential interest.
“The response was a very clear, ‘Yes, we need this and we are willing to pay for it.’” Lisa reported. “We put up Facebook ads and a Typeform survey. We were getting entrepreneurs and freelancers to not only click and provide their email address, but also a lot of feedback about their skill sets, what they were interested in doing, and what they needed.” Demand for Equity Directory quickly grew, so Lisa and her co-founder Colin dropped their other projects and focused on their equity exchange talent platform.
Entrepreneurs and Equity
Lisa Magill pitching for TechCo
Lisa and her co-founder have seen through their work how tricky the topic of equity can be. “We get to hear the nightmare stories of what people have experienced,” Lisa said. “They’re interested in working on fun projects for equity, but want to make sure it’s set up in a way that is fair.”
The Equity Directory co-founder’s top three tips about giving out equity in your startup are to document all agreements, get an advisor, and maintain enough equity for yourself. Lisa elaborated, “The most common mistake entrepreneurs make is not documenting the terms of equity agreements. That leads to confusion, lack of commitment from team members, and destruction of key relationships. It is so important to document what you agree to and have everyone sign it, even if it isn’t a fancy legal document.”
Lisa continued with her second tip. “There’s no ‘one-size-fits-all’ solution. Instead, there’s a lot of conflicting advice and it can be confusing, especially for first time entrepreneurs.,” she pointed out, “You need to be able to turn to someone you trust for legal and tax advice. A lot of startups don’t have those advisors in place early enough. Without them you may, for example, fail to put someone on an appropriate vesting schedule, forget to file an 83(b) within 30 days, or you may issue options at too low of a strike price. Not understanding the legal and tax implications tied to equity agreement has huge implications for you and your employees.” The Equity Directory co-founder recommends that entrepreneurs have someone to call that understands the tax and legal aspects to make sure you aren’t making any major mistakes.
Lastly, Lisa advises entrepreneurs to make sure that they’re maintaining enough equity for themselves. “You’re going to put blood, sweat and tears into your company but, if you hand out too much equity early on, down the road you’ll start doing the math and struggle to get excited about your own upside potential. Similarly, when equity is part of your hiring conversations, you should make sure you’re looking for people who are extremely passionate about your mission. You want to hire those who see your company as more than a job or a quick project. You don’t want them to be able to walk away without caring how that affects you and your team.”
Climbing Machu Picchu with Lisa Magill
“I like creating companies. I love taking an idea and building a business around it. Being a founder or co-founder of a startup is exciting because everything that you do matters. But maybe the most unique aspect of it is in the fact that you have to wear so many hats — and you have to wear each of them confidently.”
From setting up Facebook ads to building a web page and pitching investors, Lisa finds herself bouncing between tasks every day. “As a founder, every aspect of your business falls back on your shoulders and you have to be willing to learn quickly as you go. You can’t let your own insecurities or perfectionism get in the way.”
Lisa described how earlier in her career, she was arguably successful because of her attention to detail and ability to consistently deliver high quality work, but in a startup setting, those tendencies often have to be set aside.
“I’m about as type A as they come, so I’ve had to grow as a person and challenge myself to do things like publish blog posts before they’re perfect or share my idea before I had everything figured out. You’ll have a sense of what you want a product to be or look like, but you really have to put that aside and strive to be comfortable delivering and iterating quickly.”
For the Equity Directory co-founder, launching a startup this time around has been about focusing on her work. “I’m less distracted and less worried about what everyone else is doing,” Lisa related, “In the past, I felt the need to appear like I was part of the scene and knew what I was doing. I was going to several events a week, I would read startup blogs for hours a day, I was downloading all the new tools and widgets to remain in tune with the community, but it was almost like a separate job. I was spending so much time trying to look like an entrepreneur, it was taking away from my business. It’s so much less stressful now that I’m comfortable turning it all off, putting my head down, and just cranking away at my work.”
Having confidence was Lisa’s main recommendation for female entrepreneurs. She shared, “I really want women to believe in themselves, to live and breathe their mission and to let everyone see the passion and commitment they have when they speak. You can’t be scared to talk about the incredible potential behind what you are doing, even in the early stages. Unwavering confidence and passion will set you apart and help you get the right people on board. It will be what gets you your best hires, your earliest customers and your first investors.”
Equity Directory ensures that all early-stage entrepreneurs, freelancers, and startup employees have a resource to turn to. For entrepreneurs looking for talent, Lisa invites you to look to Equity Directory for top talent that is open to exchanging work for equity. Keep up with Lisa on Twitter and get inspired to fearlessly share your mission.
What are your top concerns as you search for talent? Have you worked for a startup before? Do you have any advice for entrepreneurs searching for employees? Let us know your thoughts in the comments below.