Learn how you can effectively structure and implement stock incentives to motivate team members. Stock options are the most common way to provide equity incentives, allowing team members to become partial owners in the company and align their interests with your company's success.
Key Topics and Insights:
- Most startups begin with 10% of total stock allocated to an option pool for team members
- Founders need to establish Plan Rules and grant templates to document how options will work
- The standard vesting period is four years (time-based vesting)
- Team members forfeit unvested options if they leave before completing the vesting period
- When exercising options, team members must pay the exercise price set at grant time
- Both founders and team members need to understand equity incentives for them to be valued properly
- Well-structured equity incentives help create "mini founders" who are truly invested in the company's success
Properly implemented stock incentives can transform regular employees into highly motivated "mini founders" who understand and value their ownership stake in the company's future.
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