Blog
Thoughts, guidance and news on giving equity to your employees
Should you worry? Hard Brexit and employee ownership
The UK is hurtling towards a hard Brexit. What exactly a 'hard Brexit' means in itself is controversial and the reality is that we won't know exactly what it means until it happens. Broadly, it will mean that there is no framework for co-operation between the UK and...
Employee share scheme valuations: why, when, what and how.
Why get a valuation for an employee share scheme? Valuations have an enormous impact on an employee share scheme. Simply put, you need to know the value of the shares for lots of different reasons, to ensure that your employee share scheme is operated without hurting...
How much of your company should you give to your employees?
The answer is easy - 10% to 20% of the company. The difficulty is understanding why and how to stick to that limit! Is this a legal requirement? No. The range of 10% to 20% is based on our extensive experience, of having advised over a thousand companies both on...
New to employee options? A quick guide for founders and employees
Employees with share options perform better. Founders: discover the fundmental issues for a share option plan. Employees: discover what’s in it for you.
Zero valuations, what they mean for seed investments and employee share schemes
October must have been a great month for seed investments in tech companies. I know this because I'm getting a lot of queries about how a zero* valuation can be compatible with fundraising. I briefly addressed this in a post back in June. I mentioned that it's very...
Exercise price for startup options and employees: the 3 best approaches
How to understand the exercise price attaching to an option, and how to set it.
Patient capital, management incentives – SMEs lead a quiet revolution
A mention of patient capital in the 2018 Budget (1) made me reflect on how long term thinking is becoming more prevalent in management incentives and employee share schemes. The 2018 Budget announced a £20 billion plan and task force targeted at unlocking patient...
3 reasons why it’s good for your company to be worthless: valuations for EMI schemes
An explanation of tax valuations for EMI schemes, and why a low valuation may be a good valuation.
A founder risked everything by overlooking something with a key employee: agreements matter
I separately asked both the founder and the key employee participating in the EMI scheme what the emotional impact was of setting up the scheme and signing the option agreement. Their answers were starkly different.
EMI options given green light by EU
In April 2018, HMRC created concern that the availability of EMI tax relief was in doubt due to a lack of ongoing EU approval. With the approval announced today, this doubt no longer exists and businesses can continue to grant EMI options with confidence.
Most EMIs are not affected by lack of EU state aid
In brief: a temporary breach of EU law by the UK government could (in theory) negate the attractive tax reliefs for EMI schemes. In practice, this concern only arises for EMI schemes breaching generous financial thresholds, and the average EMI scheme will not be...
Using your own valuation for an employee share scheme
Granted specialists can prepare a valuation, agree it with HMRC and register it for you. But you might want to take a different approach: you may feel comfortable doing your own valuation, you may have an existing trusted advisor who can do this for you, or you may...
Just Eat’s astonishing record on employee ownership
David Buttress, founder of Just Eat and CEO until 2017, claimed to have instilled a ‘founder mindset’ within his workforce. Is this just hot air without those employees having equity?
Keeping it simple with employee share schemes, part 3: dilution
Dilution is what happens when new shares are created and given to new shareholders. Do existing shareholders lose out? Can and should you protect some shareholders against dilution?
Keeping it simple with employee share schemes, part 2: termination of employment
How should you plan to treat an employee who leaves the company? Worry about what happens to an employee’s options or shares when they leave can often lead to unnecessary complexity.
Keeping it simple with employee share schemes, part 1: vesting conditions
A vesting condition: the event which must occur for an employee to receive their shares. Find out about the types of vesting conditions you can include, and how to keep things simple.