Originally Posted by
rickair7777
I might go for that in a tech company... a small idea can go viral and amplify it's value by orders of magnitude in months.
But an airline??? Which is in a commodity service industry? Equity valuation will be a long, slow plodding march, set back as costs gradually rise and the competitors start resisting your encroachment. Always with the risk of a big downturn wiping you out. Gonna depend on timing and luck frankly. Almost might as well go to Vegas, at least you know if you won or lost right away.
IIRC a few people did make out that way with SW and maybe B6, so not impossible but it doesn't seem like a great personal financial plan.
Tech startups fail a lot as well. They don’t always turn into Google or Facebook or Twitter. It’s always a gamble. But with an airline like breeze set to grow from nothing to a 100-150 airplane company in 5ish years, that valuation will potentially grow rapidly. And it isn’t really a financial plan, it’s more of part of the risk/reward equation for going to a startup (along with seniority), and a monetary one that *may* compensate for initial low wages. The idea with the airline startup paying in equity is to have it long enough for the airline to go public, still in growth stage, at which point you have the option to cash out (or hold, I guess, but holding stock long term in the company you work for isn’t a great idea). That was one reason B6 got away with low wages initially, and some of those guys made out really well (some didn’t). It’s just something like profit sharing in that that isn’t guaranteed to pay out, but can move the needle in getting people in the door, and is an IOU of sorts, not really a scheme or promise that the stock will go parabolic and get rich…just something additional on top of and to partially make up for initial low wages.
I’d cut the breeze guys more slack if this were the case. Instead, they got a chance to put their own money into the company. Which is insanity when you think about it. It’s one thing to receive equity as compensation, but when you have to pay your own money, while already being underpaid, to invest in an airline startup at which you work…yikes.