This Week in Startups · Friday, August 7, 2026
The discussion touched on the significant amount of stock-based compensation in large tech companies, with Alphabet and Meta leading the list. A speaker highlighted that when stock-based compensation exceeds 20-30% of a company's revenue, it can be a point of concern for sophisticated investors due to potential shareholder dilution.
“So these are ranked, just so you know, um, by the total amount of stock-based comp. You know, those are very big companies. The way, uh, you know, sophisticated investors might look at it is, what is it as a percentage of revenue? And if you look at Snowflake, that's 35%. I think their stock comp is at 35% of their revenue number. And that's when people get a little tweaked. Is when, uh, you know, this gets to be 20%, 30% of revenue. So just small, in the weeds, observation.”
“If you're a shareholder, and the company's not doing well, and the management team is giving out, you know, 1, 2, 3% of the company every year, you're diluting over five years, 15, 20% of the company, while the stock is sideways, that gets people's ire up.”