EquityBee – Realizing the Value of Your Employee Stock Options
August 17, 2023
5 min read
The Problem with Employee Stock Options
Startups are exciting. They’re fun, disruptive and they may create value. That can propel economic growth, help our communities and improve our quality of life. Startups (and other new small businesses) are the backbone of our economy, as 89% of firms in the US employ less than 20 people . But startups are also hard. Getting involved in them as entrepreneurs or employees can carry a high degree of risk. Those who choose to participate in the journey and invest their valuable time in these early-stage companies may be rewarded properly if value is created.
One currency that startups may use to reward employees (like you!) is in the form of stock and stock options. For various reasons, which we will review in later posts, we believe, the mechanism of using this currency is broken. Some employees are not able to capitalize on this additional value as anticipated. Making things even worse, we believe that this value-loss problem may make it difficult for startups to attract the best talent, therefore reducing their chances of success and hurting the value of their stock even more, adding further to the loss of value.
This is a problem. One that we’ve experienced first-hand and have witnessed for years as we’ve built early-stage companies or worked for them.
How EquityBee Can Help
EquityBee’s mission is to fix this problem. We’re here to give early-stage private company employees the opportunity to unlock and realize the value they worked so hard to create. By leveraging technology and capitalizing on the fact that people are comfortable transacting financially online, EquityBee aims to remove friction from the compensation world, help startup companies reward employees better, and provide them with the financial tools to compete with big corps to help increase their chances to succeed. We think it’s only fair and it’s the right thing to do.
We are starting with the people who are building these companies –startup employees. If your options are vested and you are overwhelmed with the potential high cost of exercising them, if your options are about to expire and you don’t want to lose them, or if you just want to learn more about stock options and the complexities around them, EquityBee is here to help.
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Securities offered through EquityBee Securities, LLC (“EBS”), an affiliate of Equitybee, Member FINRA. EBS does not make investment recommendations and no communication, through this website or in any other medium should be construed as a recommendation for any security offered on or off this investment platform. You can learn about Equitybee Securities on BrokerCheck
This website is intended solely for accredited investors. Investments in private offerings, and startup investments in particular, are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in such offerings. Companies seeking startup investments tend to be in earlier stages of development and their business model, products and services may not yet be fully developed, operational or tested in the public marketplace. There is no guarantee that the stated valuation and other terms are accurate or in agreement with the market or industry valuations. Additionally, startup employees’ options and equity (once options are exercised) may be subject to blackout periods or other restrictions including holding period requirements. Investments in early-stage private companies should only be part of your overall investment portfolio. Furthermore, the allocation to this asset sub-class may be best fulfilled through a balanced portfolio of different start-ups. Investments in startups are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.