Why did everyone who worked in the early stages with Facebook become rich

The first one is that it is likely that many of these employees were given a small equity stake in Facebook as a method to persuade them to stay. The other reason is that as the company grew, their wages grew as well.

Wages

One of the reasons that they became richer is due to their increase in their wages. As Facebook grew and grew, their wages grew along with it. So the early employees and crucial hires were the first to benefit from Facebook growing. In 2007 Facebook had $153 million in revenue, whereas last year alone Facebook had a revenue of about $27,638 billion. That is a massive increase. Can you imagine how much wages must have increased?

Equity Stake

It is common practice for many startups to offer their best employees some equity stake in the company in order to keep them. Without these employees, it is likely that the company would struggle or it would struggle to replace their skills and expertise.

Usually, these equity stakes are generally low. It is quite common to give out 2% or less. Now let’s imagine that Facebook gave 1% to their 10 best early employees. That is 10% equity given out. As of February 1st, 2016 Facebook was valued at $328 billion.

That means their 1% equals to $3.28 billion. Now that is a lot of money! It is likely that they were given less than 1% but still, that is millions of dollars. Of course, that sounds amazing today but back then they were taking a big risk sticking with Facebook.

is another reason why equity is given out. To help hedge the risk that the employee is taking for sticking with the startup.

I believe that the majority of early stage employees became richer more due to their equity stake in Facebook than their wage but it is definitely due to both.