I run a company that’s self funded and does not intend to go public (this might change due to the nature of the business).
I have started to experience scale and traction, which means that I will have to hire.
What are the options before me that I can offer to my new hires (and existing team) to join my firm? I like most startups do not have money to compete with the high-payers. This means that I will have to offer something else that will complement the pay package.
The purpose of stock options is to give the employees a stake in the success of the company. If the company does well and is acquired or goes public, then they can exercise their options and get rewarded.
So, if your company is looking forward to either of those possibilities, then you can still grant stock options. You can also skip the option part and just issue stock (taxable to the employees, but not much tax if the stock isn't worth much). You can also create Stock Appreciation Rights -- basically, if the value of the company increases, they get the right to what they would have had if the stock had increased, but don't get other rights as stockholders.
If the company isn't thinking of either of those, then you probably don't want to give your employees stock, since there would never be any market for it and you don't have to worry about having minority stockholders. Instead, look at cash-based awards. What sort of awards? A profit-sharing plan or a bonus plan tied to a certain level of earnings would be good examples.
Just because a company isn't public doesn't mean you can't provide stock/shares in the company privately. In fact, most companies do this for investors and their early employees. Giving out shares in your company can be a tricky thing, so be sure to research it before doing it. For starters, though, I'd recommend making sure the stocks don't fully vest for a few years. Even up to 5 years is common. This means the employee would need to work for you for 5 years before fully earning the stock.
Second, there are tons of perks that you can provide that don't cost money, or that don't cost nearly as much money as the value they provide. For example:
These are just a handful of ideas, and some things work in some situations, but not others, so you'll have to think about what would be a good fit for your company. The list is endless. Get creative!