Glossary
Equity
Ownership of an asset, as opposed to income from working on it.
Equity is the difference between being paid to build something and owning the thing you built. A developer earning $200,000 has a good income; a developer owning 5% of a company worth $40m has the same amount in a completely different form - one that can grow while they sleep and be sold in one transaction.
Nearly everyone who becomes wealthy quickly does it through equity rather than salary. The trade-off is that equity is illiquid, often worthless, and pays nothing until an event that may never come.
Where this matters
Micro-SaaS
Software & Digital
Build small software that solves one problem and charges monthly for it
- Capital
- Under $500
- First income
- Months
- Risk
- Ceiling
- Uncapped
Startup Equity
Acquisitions
Trade salary for ownership at a company that might become valuable
- Capital
- $0
- First income
- Years
- Risk
- Ceiling
- Uncapped