Loading...
Answers
MenuI would like to put an employee equity share in place but would like like some help.. what % of company (limited liability), what type shares etc etc
want to align my employees successes with the business with their personal success to help create a collaborative enthusiastic culture
Answers
Hi,
I am the MD of a $100m Technology company who operated a share incentive program until we were acquired by a Private Equity company in 2019.
This is all very much dependent on the value different people take to the table and who currently owns the equity. It is common for Management teams to hold anywhere from 3% to 20% of the total company's equity with the CEO having the largest share as you work down the value chain.
Once you have established how you wish to distribute the equity, formalizing should be a relatively simple process.
I would be happy to talk through your requirements in more depth at your convenience.
Please also see my Business Blogs at www.mrgrowthmentor.com.
Best Regards.
contact me to explain all details
Implementing an employee equity share program can be a complex process and there are several factors to consider. Here are some key considerations to help you get started:
Determine the percentage of equity: The percentage of equity to allocate to employees will depend on several factors, including the stage of the company, the size of the team, and the nature of the business. A common approach is to allocate 10-20% of the company's equity to employees.
Decide on the type of equity: There are different types of equity, including common shares, preferred shares, and stock options. Common shares are the most straightforward and give employees the right to vote and receive dividends. Preferred shares have preferential treatment over common shares in the event of a liquidation or sale of the company. Stock options give employees the right to buy shares at a fixed price at a future date.
Determine the vesting schedule: Vesting refers to the process of earning equity over time. A common approach is to have a four-year vesting schedule, where employees earn equity over four years with a one-year cliff, meaning they need to stay with the company for at least one year before earning any equity.
Consider tax implications: There may be tax implications for both the company and employees when implementing an equity share program. It is essential to seek advice from a tax professional to understand the tax implications and ensure compliance with relevant laws and regulations.
Develop an employee agreement: Once you have decided on the percentage of equity, type of equity, and vesting schedule, you need to develop an employee agreement that outlines the terms and conditions of the equity share program.
It is recommended that you seek the advice of a lawyer and other professionals, such as an accountant or a financial advisor, to help you navigate the complexities of implementing an employee equity share program.
Related Questions
-
I have an idea for a start up, but I don't know how to code, whats the next step?
Hello, If you have time, I suggest that you learn coding yourself. That saves you money but takes a great amount of time to do. And if your interested, I'm a coder myself. You can give me a call and we'll discuss the details of your idea.GS
-
What companies have successfully implemented both B2B and B2C products or services? Which should I start with for the non-profit sector?
I would suggest the first question to ask is "what problem do I solve?" And of those people I solve problems for "who do I create the most value for?" In the non-profit world you need to add "How does my business help the non-profit run better and/or help the group the non-profit focuses on?" For example, if you've created a platform that drives donations, your company "has created a platform that helps you reach fundraising goals faster." What you don't want to do is market and sell to B2B and B2C audiences simultaneously. They have different ways of buying - a B2B audience needs to have their benefits quantified (using your thing makes me x amount more) - and it's extremely hard for a startup to be able to do both well. Better to start with one, execute really well and move into the other. Feel free to give me a call and we can dig into who your most valuable audience is.AV
-
What advice do you give to a 16 year old entrepreneur with a start up idea?
First, hat tip to you for being a young entrepreneur. Keep it up! If you have the funds to build out your MVP, hire a developer and possibly a mentor. If your idea is marketable, you don't need to give up equity by bringing in a co-founder. If this is your entrepreneurial venture, I would recommend you do retain a coach to help you see all the things you may not know. Have you already done your SWOT analysis? Have you identified your target market? What is your marketing plan? What will be your operating expenses? There are lots of questions to ask. If you would a free call, I'd be happy to help you in more detail. Just use this link to schedule your free call... https://clarity.fm/kevinmccarthy/FreeConsult Best regards, Kevin McCarthy Www.kevinmccarthy.comKM
-
There is a person working with you who has great skills but doesn't fit the culture, how far would you go with trying to help this person to change?
Backwards. I'd make sure that person didn't stay in the company. "One dirty fish muddies the whole pond" It's not personal or malicious - they're just not the right fit. A great skill set, while very important is always secondary to cultural fit if you really want your company to flourish.KM
-
What environmental and personal characteristics allowed Larry Page/Sergey Brin to be so successful?
They met a need for lots of people. Their values lead to long term success, but their short term growth was due to meeting a need in the marketplace and doing really well.JM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.