# What is Equity Compensation?

Equity compensation gives employees company shares or options. SMEs use it to attract and retain talent when cash is limited.

Source: https://faqtic.co/glossary/equity-compensation

## Why it Matters for SMEs

- Attracts talent
- Retains staff
- Aligns interests

## Example in Practice

Equity agreements stored in Factorial.

## Frequently Asked Questions

### Common in SMEs?

Yes, especially startups.

### Risks?

Dilution, complexity.

### Documented?

Yes, in contracts.

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