When you start a business, it’s natural to want to feel like you’re all on the same team, and giving employees equity can align your staff around a common goal. But sharing equity with employees can have a lot of downsides. Here are five reasons to think twice before turning an employee into an owner:

1. Pressure to sell

Unless you declare a dividend, the only way employees’ shares will be worth anything is if you sell, which can add increased pressure for you to pursue an acquisition offer before you’re ready.

2. Loss of privacy

Your shareholders will expect reporting on how your company is doing and you may not always want to let staff see your most intimate financial details. READ MORE