It has taken about ten months longer then we had planned, but CircleBuilder.com has finally closed its seed round of funding. The convertible debt has become equity priced at a dollar a share and it's gone up in value, at least on paper. However, that value is not liquid, so is not worth discussing.

Before I go further, I should disclose that I am on the Advisory Board of the company and was one of the early investors. Many of my posts are written as an "adventure in investorland" relating my own experiences. For those who feel this is too promotional, you can turn away. My purpose is to share the journey of an insider as this company builds.

There was little certainty that CircleBuilder would be a success when we started. Along the way, I have had some reservations about the financial and time commitment; I do not need one more thing to do, or a way to lose money.

When we started, MySpace was all the rage and Facebook was gaining momentum rapidly. The founders, Howard Brown and Brent Cohen, came to me with an idea to develop a social networking site catering to religious communities that were not well served by the free-for-all, anything-goes nature of existing alternatives.

It happened at Microsoft (NASDAQ: MSFT), and, to a lesser extent, at Yahoo! (NASDAQ: YHOO). Key employees are at the company for a few years. Their stock options vest, and the shares are longer doubling ever year. So, they exercise their options, pick up a few million dollars, and move on.

Google (NASDAQ: GOOG) is beginning to face the "Microsoft" problem now, according to The Wall Street Journal. As the newspaper points out, stock options granted in 2003 have an average exercise price of $.49 and the shares now trade well north of $500. In 1990, Microsoft's stock was $1. By 1999, it was over $58. A lot of people made money, but, as the price growth disappeared, so did key employees.

Key members of Google's staff can now leave with significant fortunes and go to start-ups which give them a larger role and a new set of financial incentives.

Google could learn something from Microsoft, but a solution would be expensive. The search company could grant key employees large blocks of restricted stock which would vest over several years. There would be a financial consequence for the company's P&L, but the move may be critical to keeping talent.

Even if it throws around more money, Google is faced with the fact that someone with $10 million may want to move on to another challenge, even if that person could make another $5 million by staying.

Douglas A. McIntyre is a partner at 24/7 Wall St.