It’s never a good idea to underestimate the people working for your business. Not everyone needs a job. Many people work because they enjoy working, and they just might have the money to help you fund your company.
Of course, your employees should already understand the risk of a startup, but you should also remember that they are emotionally attached to the business.
Some employees are able to invest in your company without necessarily being a qualified investor, however, it’s best to leave those opportunities to people who are senior members of your team. Otherwise, make sure they are a qualified investor.
Don’t assume that your entry-level employees are not qualified investors. I didn’t know I had qualified investors doing entry-level jobs because we didn’t talk about their financial situation.
Employees love participating in your business. They understand the business model, and having them take real ownership in the business gives them a different perspective on their work.
In other cases, your employees might know qualified investors. They may discuss your company with their relatives and friends, who catch the enthusiasm for your company. There are no better salespeople than people who are working with you in your company.
You may risk your employees knowing more than you want, but it’s been my experience, that the right employees knowing what’s happening with your business is better than having to keep quiet about what’s happening in the board room. They’ll work harder and smarter, and spend less time gossiping, which is what startups need.
Keep this in mind as you grow your business because you never know what anyone is capable of until you give them the chance to show you.