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Understanding Equity To Attract Talent - CFO connect & Ekwity

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Understanding equity incentives is essential to attract the talent you need and to educate them on the financial side of entrepreneurship.
Sharing capital is a standard in the startup culture but do we really understand how it works?

In theory yes, but in practice not so much... Indeed, when comes the time to face some simple questions such as:

-Which tool should I use to share the capital with my employees (stock options, phantom
shares...)?
-How to communicate equity to my team?
-When do we have to sign the contracts and which contracts by the way?
-How it works when an employee is leaving?
The answers are not so obvious to both entrepreneurs and employees... And it does not matter whether the company is early or mature.

Panel Speakers:
➡️Dominic Jacquesson , VP Talent at Index Ventures, by far the best expert on the topic in Europe will share will share his experience and give great insits on how startups of his portfolio share their equity with their employees.
https://www.linkedin.com/in/dominicjacquesson/?originalSubdomain=uk

➡️Christian Gabriel, co-founder & CEO at Capdesk, will explain what is a captable and why it is so important to track it and keep it clean.
https://www.linkedin.com/in/gabrielchristian/

➡️Ian Shaw, Head of UK Employee Share Schemes & Incentives at Orrick, will give us a clear view on the technical aspects regarding the implementation of such incentives in the UK and how you could implement it internationally.
https://www.linkedin.com/in/ian-shaw-6ba480a9/

➡️Florent Artaud, CEO & co-founder of Ekwity, will first give the basics you need to understand the topic before moderating the panel. (LINK)
https://www.linkedin.com/in/florent-artaud-a2971989/

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Understanding Equity To Attract Talent - CFO connect & Ekwity

  1. 1. x Sponsored by
  2. 2. The go-to community and ressource hub for CFOs in fast-growing companies
  3. 3. Spendesk is the all-in-one spend management platform built for the way teams want to work Employees can pay for what they need Finance keeps absolute control
  4. 4. • The Family is located in Paris, Berlin, London & Brussels. • Portfolio Valuation: $2 billions. • 20+ new startups in portfolio / 8 weeks. • Last funding round: €15 millions in June 2018 with LGT Capital Partners. Portfolio Provide comprehensive knowledge base of benchmarks, best practices in employee equity and offer an advisory service to set up a company's employee option program based on their specific business needs. • Created in October 2018 by Florent Artaud and The Family • Work with 30+ companies in Europe and US. The Family assists 250+ European startups. Lion, L’école de l’avant garde des employésEkwity &The Family
  5. 5. Understanding Equity Incentives to AttractTalent. Sponsored byx
  6. 6. • The Basics • Panel discussion • Q&A Session • Networking Sponsored byx
  7. 7. Get the basics right. Sponsored byx
  8. 8. Lion, L’école de l’avant garde des employésBasic knowledge Capital Share Value Private companies Public companies
  9. 9. Lion, L’école de l’avant garde des employésCompensation package in startups
  10. 10. Lion, L’école de l’avant garde des employés Source: Index Ventures Handbook – RewardingTalent by Dominic Jacquesson, Head ofTalent. So what’s up in UK?
  11. 11. Dominic Jacquesson Head of talent Ian Shaw Head of UK Employee Incentives Christian Gabriel CEO & Co-founder Florent Artaud Co-founder Index Ventures Orrick Capdesk Ekwity x
  12. 12. Why giving equity to employees in startups? Sponsored byx
  13. 13. How does it work here in UK? Sponsored byx
  14. 14. WhyEMIisgood Capital Gains Tax MV at sale MV at exercise Value £4.00 £3.00 £2.00 £1.00 MV at grant Income Tax + NICs Exercise Price MV at sale MV at exercise Value £4.00 £3.00 £2.00 £1.00 MV at grantExercise Price Capital Gains Tax FULLY TAXABLE OPTIONS TAX FAVOURED OPTIONS Grant GrantExercise ExerciseSale Sale
  15. 15. When and how equity might be translated into cash? Sponsored byx
  16. 16. Mechanics “NORMAL” EXERCISE TARGET COMPANY BUYER OPTION HOLDER
  17. 17. Mechanics CASHLESS EXERCISE TARGET COMPANY BUYER OPTION HOLDER Undertaking to pay exercise price Less exercise price Fulfils optionholder’s undertaking
  18. 18. What is a captable and what is the link with employee equity? Sponsored byx
  19. 19. Orrick | Ekwity 4 June 2019 !21 Name Number of Shares Percentage of the Company held Founder 1 7000 35.00% Founder 2 6000 30.00% Outside Investor 1 3500 17.50% Outside Investor 2 1500 7.50% Option Pool 2000 10.00% Total 20000 100.00% Name Number of Shares Percentage of the Company held Founder 1 7000 28.00% Founder 2 6000 24.00% Outside Investor 1 3500 14.00% Outside Investor 2 1500 6.00% Outside Investor 3 3500 14.00% Outside Investor 4 1500 6.00% Option Pool 2000 8.00% Total 25000 100.00% Name Number of Shares Percentage of the Company held Founder 1 7000 27.39% Founder 2 6000 23.48% Outside Investor 1 3500 13.70% Outside Investor 2 1500 5.87% Outside Investor 3 3500 13.70% Outside Investor 3 1500 5.87% Option Pool 2555 10.00% Total 25555 100.00% SeriesA SeriesB SeriesB AfterTopUp What’s a CapTable?
  20. 20. How much to give to employees? Sponsored byx
  21. 21. Who decide to grant equity & the conditions? Sponsored byx
  22. 22. What is your ESOP policy at Capdesk? Sponsored byx
  23. 23. How to communicate on employee equity? Sponsored byx
  24. 24. How to manage internationally an ESOP? Sponsored byx
  25. 25. Q&A. Sponsored byx
  26. 26. Thank you. Sponsored byx cfoconnect.eu

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