In short: Robert Nikic's open letter to founders on sharing the upside with your team: why top people go quiet, what fair sharing looks like and how to start.
To every founder who's growing right now,
I want to talk about the part of the company nobody puts on the pitch deck. The people who actually built it.
You know who they are. The first person who said yes when the job was risky and the pay was thin. The one who stayed until midnight the week the big order almost fell apart. The one who fixed the thing you didn't even know was broken. The one customers ask for by name.
Here's a question you should be able to answer without thinking. When the company does well, do they.
If the honest answer is "not really," this letter is for you.
What happens when you don't share
I've watched it happen in companies of every size, and it almost never looks dramatic.
Nobody storms out. Nobody makes a speech. Your best people just do the math. They see revenue going up. They see the new office, the bigger contracts, the founder's life getting easier. And they see their own pay, their own stake, their own future staying exactly where it was.
So they go quiet.
They stop bringing you ideas, because ideas make you money, not them. They stop staying late, because staying late builds your company, not their life. They do the job, and they do it well, but they stop doing the extra thing that made them special. And the extra thing was the whole difference.
Then one day a competitor makes them an offer. They take it. And they walk out with everything they know about your customers, your systems and your weak spots.
You'll tell yourself they left for money. They didn't. They left because they figured out where they stood.
Sharing isn't generosity
I want to be clear about this, because founders hear "share the upside" and think charity. It isn't.
It's the most practical thing you can do to keep the people who make the upside possible. A team with a real stake in the outcome thinks like owners. They catch problems before you do. They protect margins. They treat customers like their own, because in a real sense they are.
You don't get that from a pep talk. You don't get it from a pizza party or a mission statement on the wall. You get it when people know that if the company wins, they win.
What fair sharing can look like
There's no single right model. What matters is that it's real, it's written down and people understand it. Some options I've seen work:
Equity or equity-like stakes. Ownership that vests over time. It ties people to the long run and gives them a reason to stay through the hard years.
Profit sharing. A defined share of profit paid out to the team, on a schedule everyone can see. It's simple, it's easy to understand, and it rewards exactly what you want: a company that makes money, not just revenue.
Results bonuses. Bonuses tied to real outcomes people can influence. Not vague "performance," but specific numbers that matter.
Paying people what they're worth before they ask. This one's underrated. If you know someone's market value has gone up, raise their pay before a recruiter tells them. Nothing builds loyalty faster than being paid fairly without having to fight for it.
Real growth paths. Not just more money, but more ownership of the work. A bigger role. A team to build. A part of the business that's theirs.
Sharing ownership isn't a fringe idea. The National Center for Employee Ownership counts 6,411 US companies with an employee stock ownership plan, 5,993 of them private, with about 11 million active participants in the latest data (NCEO). A formal plan is only one way to share. But plenty of companies already do it.
The objections I hear
"We can't afford it yet." You can afford to start. Share a small slice of profit. Write down what people will get when certain milestones hit. The amount matters less than the promise being real and kept.
"They'll leave anyway." Some will. People leave for all kinds of reasons. But the ones who stay will stay longer, and the ones who leave will leave as friends, not as competitors who resent you.
"It's my risk, so it's my reward." You took the first risk, and you should be rewarded for it. But every person who joined a young company took a risk too. They bet their career on you. That deserves something.
"It's complicated." It can be. Get good advice once, set it up properly, then keep it simple enough that everyone on the team can explain it.
How to start, at any size
If you're three people, write down what each person gets if the company is sold or becomes very profitable. Put it on paper. Sign it.
If you're twenty people, set up a simple profit-sharing pool and tell everyone how it works.
If you're a hundred people, look hard at whether the people who built the company in the early years still have a stake that reflects what they did.
At every size, talk about it openly. The worst version of this is the one where people have to guess.
Why this matters to me
I believe the people who build a company should share in what it becomes. Not because it sounds good, but because I've seen what happens to companies that forget it. They grow for a while. Then they hollow out. The founder ends up surrounded by people who are there for the paycheck, wondering why nobody cares the way they used to.
And I've seen the other kind. Companies where the team acts like owners because they are owners. Those companies are harder to break, faster to recover and a lot more fun to build.
So here's my ask. This month, sit down and write out what your team gets when the company wins. If the answer is nothing, change it.
The people who build it should share in it. That's the deal.
Robert
Related reading
- The five principles Robert Nikic builds by
- Building a company without outside investment
- Investing in people first
Robert Nikic is an entrepreneur, TEDx speaker and advisor on innovation and economic growth. He writes about what he has seen build and break companies, and about the rules that decide whether small businesses get a fair shot. Read his writing on Medium, the Open Doors newsletter on LinkedIn and daily posts on X.
