In what amount are employee stock ownership plans (ESOP) common?

    • Does anyone here have experience with employee stock ownership? Instead of bringing someone else into the founding team, we are considering giving a previously free "employee" a share as an additional incentive and are thinking of the ESOP model (Employee Stock Owner Plan). Do you have any experiences how much % is usual to give away and with which goals it is agreed upon? Best Nina

      asked by Nina Schiffmann·5 months ago

    Answers

    • 1
      Matthias NanntBest answer

      For startups in seed-stage it's normally 10%-20% of the total equity. But this really depends on your personal preferences, the type of your company (e.g. bootstrapping or VC-funded) and the talent you need. Generally you should be more generous with the equity you give to your employees than to your investors, because the employees are the ones who really drive the value and success of the company over a longer time. Unfortunately in Germany it's still complicated to build a good ESOP strategy but there will be new laws soon that make this easier. The US-startup Gusto has built a guide how to offer equity stock to your employees (It's meant for US startups, but maybe some of the topics on planning and communication are helpful for you): https://gusto.com/blog/hiring/crash-course-offering-equity-employees

      5 months ago

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