Key Takeaways

  • Martin Basiri, founder of ApplyBoard and Passage, rewards intense employee effort by granting thousands of stock options live in the room.
  • Basiri occasionally walks the office floor at 10 p.m. and drops 20,000 options to every single person staying late, repeating the move roughly once every 50 days.
  • Shaan Puri emphasizes that the tighter the loop between an action and its tangible reward, the faster a team adopts that behavior.
  • Sam Parr points out that while many startups celebrate wins with a physical gong, Basiri binds social celebration directly to actual equity upside.
  • Founders can implement this immediate reward mechanism using Basiri's Real-Time 'Option Drop' Incentive Rule.

The Basiri's Real-Time 'Option Drop' Incentive Rule

  • Component 1: Trigger Event

Identify an employee who solves a hard problem in real time, unlocks unexpected growth, goes above and beyond for a customer, or works late to hit a deadline.

  • Component 2: Immediate Verbal Award

Announce the equity grant on the spot (e.g., 'Option drop: 20,000 options' or '50,000 options') in front of the team to provide instant social and financial reinforcement.

  • Component 3: Asynchronous Execution

Message an executive assistant or legal team immediately to formalize and paper the option grant with standard strike prices.

When This Works (and When It Doesn't)

This rule works best in fast-growing startups with high-equity upside where leadership wants to immediately reinforce high-intensity, problem-solving behaviors without waiting for annual performance cycles. Most corporate incentive programs fail because the feedback loop is too long. When an engineer fixes a broken database at midnight, a bonus six months later in a performance review does not create behavioral momentum. As Puri put it: “The more specific, the more concrete, and the more immediate a reward, the more of that behavior you're going to get.”

Basiri proved that administrative friction is often just an excuse. When Puri questioned whether handing out equity on the fly was legally possible, Basiri answered: “Why not? I just send a message to my assistant, option drop these people, this amount, and then it gets papered. That's it.”

This tactic fails when your company equity is worthless, stagnant, or heavily diluted to the point where 20,000 options feel like monopoly money. It also backfires if granted arbitrarily without clear, observable outputs. If employees feel option drops depend on personal favoritism rather than visible grit or solved problems, the practice destroys morale instead of building it.

What to Do With This

Set aside an unallocated pool of employee options specifically designated for discretionary executive grants this quarter. When an engineer stays past 9 p.m. to stop a server outage or an account rep closes an off-hours enterprise deal, walk up to them in front of the room. Say: “Option drop: 10,000 options.” Immediately send a one-line Slack message to your legal counsel or operations lead with the recipient's name and share count so it gets officially papered before morning.