A Jordanian founder pitched his startup idea to a talented engineer. “Join me as employee number one,” he said. “I’ll give you 5% equity that could be worth millions.” The engineer’s response: “Can you pay me a competitive salary instead?” The founder was confused—wasn’t equity supposed to be more attractive than cash? In MENA, employee stock ownership plans (ESOPs) face cultural skepticism that Silicon Valley founders don’t encounter. Understanding why helps you build better strategies for attracting early talent.

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The ESOP Skepticism Problem

We lack visible wealth creation stories. While successful exits happened at Maktoob, Souq, Careem, and others, most early employees who became wealthy prefer to keep quiet about it. Fear of government attention, social obligations, or simple privacy concerns mean these success stories don’t circulate publicly. Historical distrust runs deep. Decades of political instability, economic volatility, and experiences with oppressive regimes have made MENA professionals suspicious of “get rich someday” promises. The cultural preference is for guaranteed, immediate value. Early founder mistakes damaged trust. Many first-generation tech entrepreneurs didn’t understand equity sharing or had poorly structured agreements. Stories of early employees getting nothing during exits spread faster than success stories. Wealth visibility is culturally problematic. Even employees who did well from early equity often can’t or won’t display their success publicly. This perpetuates the cycle of invisible wealth creation, making equity seem like a myth.

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Why Silicon Valley ESOP Advice Fails Here

Different risk tolerance. Silicon Valley employees often have family wealth, high salaries, or multiple opportunities that make taking equity risks acceptable. MENA professionals typically support extended families and can’t afford to gamble with their income. Limited exit opportunities. The MENA startup exit environment is less developed than Silicon Valley. Employees see fewer acquisition opportunities and almost no IPO examples, making long-term equity value seem uncertain. Legal system concerns. Complex or unfamiliar legal frameworks around equity ownership make employees nervous about whether they’ll actually receive promised value, even if the company succeeds. Cultural attitudes toward speculation. Many MENA cultures view speculative investments skeptically. Equity in an unproven startup can seem like gambling rather than prudent career planning.

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Alternative Early Hiring Strategies

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Immediate Value + Small Equity

Instead of large equity packages, offer smaller percentages (0.5-2%) combined with competitive salaries and clear immediate benefits: skill development, industry connections, or experience with specific technologies. The equity becomes a bonus rather than the primary incentive, reducing pressure and skepticism while still aligning interests.

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Revenue-Based Compensation

Structure agreements where employees receive percentage shares of revenue once the company hits specific milestones. This feels more concrete than abstract equity value and ties compensation directly to business success. Example: “Once we reach $50K monthly recurring revenue, you’ll receive 2% of all revenue above that threshold for the next two years.”

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Partnership-Style Arrangements

For key early employees, consider structures that feel more like partnerships than employment: profit sharing, specific business area ownership, or clear paths to formal partnership. This approach leverages cultural comfort with family business and partnership models while achieving similar alignment goals as traditional equity.

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Building Trust Without Traditional ESOPs

Financial transparency from day one. Share revenue, expenses, and growth metrics regularly. Transparency about business reality builds trust that equity promises aren’t just hopeful speculation. Legal documentation even for small agreements. Use proper lawyers for equity agreements, regardless of size. The cost demonstrates seriousness and provides employees with documents they can understand and trust. Connect to regional success stories privately. While public stories are rare, arrange private conversations between potential employees and people who did well from early equity in regional startups. Start with advisors and consultants. Test your equity proposition with part-time advisors or consultants before asking full-time employees to make career bets. This helps you refine both the structure and the pitch.

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The Pragmatic MENA Approach

Lead with immediate value. Make the role attractive based on salary, learning opportunities, and career advancement potential. Treat equity as additional upside, not the primary selling point. Use proven examples sparingly but specifically. When you do reference success stories, use specific, verifiable examples rather than hypothetical scenarios. Even if details are private, specific references carry more weight. Structure for quick wins. Design compensation so employees can see value within 6-12 months rather than 3-5 years. This might mean smaller total packages but faster realization of value. Address concerns directly. Acknowledge the cultural skepticism openly and explain specifically how your approach addresses common concerns: legal protection, business transparency, realistic timeline expectations.

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Common Mistakes to Avoid

Don’t oversell the upside. Avoid Silicon Valley-style pitches about “changing the world” and “massive equity payouts.” Focus on realistic scenarios and concrete benefits. Don’t ignore family obligations. Recognize that your potential employees often support parents, siblings, or extended family. Structure offers that acknowledge these responsibilities. Don’t assume risk appetite. What feels like “reasonable risk” to you as a founder might feel irresponsible to someone with family financial obligations. Don’t rush the equity conversation. Build trust through project work, consulting arrangements, or part-time collaboration before asking for major career decisions.

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Long-Term Strategy

The goal isn’t to avoid equity entirely—it’s to build it into compensation packages in ways that work within MENA cultural context. As more success stories become visible and trust builds, traditional ESOPs may become more effective. Start with hybrid approaches that provide immediate value while building familiarity with equity concepts. Document and share your approach with other founders to help build ecosystem knowledge about what works. Celebrate wins publicly when possible to contribute to the broader cultural shift toward accepting equity as legitimate compensation. Early hiring in MENA requires understanding that “sweat equity” and “future wealth” promises carry different cultural weight than they do in Silicon Valley. Successful founders adapt their approach while still achieving the alignment and attraction goals that make ESOPs valuable.

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The Long-Term Vision

This cultural skepticism toward equity compensation is not the ideal outcome for building a thriving startup ecosystem. Traditional ESOPs, when they work properly, create powerful incentives for innovation, risk-taking, and long-term value creation. They align employee interests with company success in ways that salary alone cannot match. But changing cultural attitudes toward equity requires time and consistent success stories. Every founder who structures fair equity agreements, achieves successful exits, and creates wealth for early employees contributes to shifting regional perceptions. Every early employee who takes calculated risks on equity compensation and sees positive results helps normalize the concept for the next generation. The strategies outlined in this guide are pragmatic adaptations to current cultural realities, not permanent solutions. As the MENA startup ecosystem matures and more success stories become visible, traditional equity compensation will likely become more accepted and effective. Until then, successful founders work within existing cultural frameworks while gradually building the trust and track record that will make equity-based compensation as powerful in MENA as it is in more mature startup ecosystems.

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Further Reading

Paul Graham’s essay How to Make Wealth explains the fundamental value creation principles behind equity compensation. While his examples are Silicon Valley-focused, the underlying wealth creation concepts apply universally—the challenge in MENA is adapting the structure to local cultural and economic realities.