Cambridge Cluster

Image by nedward.org via Flickr The opening of the Cambridge Enterprise Conference 9 got off to a sticky start when Walter Herriott announced that the main speaker had double booked and was otherwise engaged.  Walter entertained us with a talk from the trenches over the last thirty years – it sounded like he built the Cambridge Cluster single-handedly!  We must make sure that the entrepreneurs who build up the companies get the glory as well as the cash.

One of the founders of RedGate Software provided a Google type talk saying how he provided such an exciting and supportive working environmnet.  I guess if you have graduated from Cambridge, worked a bit and your first start-up takes off so you rapidly employ 100 people you are entitled to think you are special.

Talking to a member of staff and a former member of staff it became apparent that there was a fairly basic option scheme in place.  When you leave, the directors or founders buy back your options.  So that is fairly restrictive and also means that the options are not very valuable.  I guess that the two founders are worth in excess of one hundred million each (no profit figures, only sales) and the 98 other people share a few pennies.

No wonder that they have to advertise for staff by sponsoring a roundabout on the Milton Road.  I remember the late , great Stephen Thomas saying that he spent £500k a year on recruitment fees when he was building Geneva Technology.  He recruited great people and many got good options and were handsomely rewarded when Geneva was sold.

It is vital for the growth of the Cambridge Cluster that all employees share in a generous options scheme which benefits the company, the employees and helps fund the next generation of companies.

I wonder if RedGate has prepared an Equity Fingerprint in their business plan.

It was good to see The Chilli at CEC9.

Just add this comment to save you clicking. Great comment but why are options so important in Silicon Valley?:

Simon Galbraith | simon.galbraith@red-gate.com | red-gate.com | IP: 212.44.26.236

Philip,
Thanks for commenting on the talk I gave, it is always interesting (if disappointing in this case) how well your messages get across. I don’t know if you noticed but I didn’t say anything about myself and what I said about Red Gate were direct quotes from others.
We’ve given out both stock (to very early employees) and options (to many) but we’ve really gone off them as part of a compensation package. Options are extremely onerous to administer, can provide perverse incentives, are hideously expensive and may offer a false promise to many.
My view is that the Cambridge Cluster will grow if it produces great companies and that whether those companies use options is of minor interest.
Simon Galbraith