Startup employees are considered a traditionally disadvantaged group of workers and they have had their fair share of problems working in startups, one of the biggest being their potential financial growth within the organization.
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One of the advancements in the way startup companies have ensured the future financial success of their employees while maintaining their commitment in the present is by providing stock options. Stock options are a type of compensation typically given to startup employees, providing them the option to purchase company stock at a predetermined price.
This allows employees to share in the company’s growth and success, potentially resulting in significant personal financial gain. Despite having an honorable and ideal way to support employees, many startup employees are not provided with clear information about the value of their stock options or the potential risks involved.
The value of these options can also be difficult to determine mainly because of its complicated process and difficulty making sense of the factors involved. With smaller or more limited startups, there are often limited choices for selling their stock options and converting them into cash because of the lack of liquidity.
More than this, because there is a high probability of startup companies not succeeding, there can be some level of uncertainty about the future of the company in which startup employees work. They may be unsure about the long-term viability of their company which affects the value of their stock options.
Despite the questions faced by startup employees with their stock options, they are nonetheless expected to be highly motivated and committed to the success of their company. Stock options are a way for startups to align their interests with those of their employees and to incentivize them to work harder.
Additionally, because a startup culture typically has limited resources, employees are expected to take on multiple roles and responsibilities, work long hours, and be flexible in adapting to changes in the fast-paced and dynamic startup environment.
This creates a stark difference when compared to employees at big tech companies. In terms of stock options, big tech employees have access to a clear understanding of their stock grants; whereas startup employees often face uncertainty and a lack of transparency.
All these concerns had been seen by Equitybee co-founders Oren Barzilai, Oded Golan, and Mody Radashkovich. This is why they developed the Equity Value Finder to address the exact question, “How do startup employees know the valuation of their stock options?”
The tool allows startup employees to sign in and input the details of their company and the total amount of stock options they have. And using Equitybee’s proprietary model that uses multiple streams of information from trade data, valuations, and market sentiment, Equity Value Finder will provide startup employees with the estimated market value of their stock options.
Along with the market value estimate, they will also see funding opportunities available to them through the platform. This tool, in the end, provides transparency and knowledge to make informed decisions about their stock options.
Essentially, it will allow employees to understand their total compensation package, whether they would like to negotiate better pay and benefits, and facilitate decision-making on whether to exercise their stock options, hold onto them, or sell them.
Startup employees don’t have to let the value of their stock option be a mystery any longer. It will ultimately empower startup employees to take control of their financial future and plan for uncertain times.