So what is the core issue of equity incentive?
To solve this problem, we should not only look at the incentive problem, but also return to the enterprise equity itself.
First, let employees know that the company has liquidity.
The core function of equity is cooperation. It is difficult for the company to get money from the organization in the early stage, and it is usually funded by partners. So when doing equity incentives, you need to know the order of option release:
1. Give priority to the introduction of shareholders at the partner level. Generally, after the running-in period is set, the investment is made directly at the seed period valuation, and the registered shares are changed after the running-in period.
2. After the establishment of the management team, make use of the partnership resources to plan the use of resources in the shortest stage, and begin to prepare to introduce resource-based shareholders (shareholders who can realize your main business), with a higher valuation than Zhong Ziqi, plan the use time of resources, and do the first round of cash flow data accumulation.
3. Find financial investors to come in and get the first round of formal cooperation and market price valuation.
Second, the development of the original equity value.
Equity incentive is closely related to the original equity distribution. Only when the value of the original equity is not developed can the equity incentive be promoted. So it depends on what stage your company is at. Usually, it is divided into three stages:
1, that is, the original equity distribution stage: 15 people or less.
2. 20~ 100 people in the stock option incentive stage.
3. There are subsidiaries in the design stage of multi-level equity structure.
The other is the strategy of full shareholding. The disadvantage is that it is very troublesome to change the business when the exercise expires, because a company has certain personnel mobility. If all the shares are held, there will be repurchase problems after leaving the company. There are still some positions that do not need to be given equity incentives, and the incentives should be right for the posts and not for the people. Furthermore, full shareholding will make stock options have no incentive value.
When these things are done, employees will know that the company has liquidity and have the motivation to buy options. The price is usually 3-7 times the market price. When employees face the pressure of capital contribution, the company can take the form of delaying (installment) payment, deducting wages, deducting bonuses and so on to help employees solve the resource problem.
Third, strictly screen the motivators.
The core of incentive is to take time and kpi as exercise conditions, and the design of conditions should be flexible.
The following conditions must be met for the selection of employee incentive factors: loyalty, historical main business contribution, mastered core resources/technology, great contribution to future main business, and great difficulty in recruitment. If you don't meet these dimensions, you don't need incentives. Remember not to choose candidates at will.
Fourth, the standard operation method
Companies should follow standardized and systematic operation methods when doing equity incentives. The general process framework is as follows:
1, main business positioning, drawing product matrix.
2. Analysis of enterprise operation system and business process, and analysis of post criticality and scarcity.
3. Selection of incentive objects.
4. Draw up the option pool ratio (exercise price and exercise ratio) and evaluate the option value.
5. The exercise mechanism of stock options.
A. Split the exercise objectives
B. Design of practice mode
C. Design of sports conditions
D. Effective attributes of rights and interests during the closed period of exercise
E. rights and interests after the exercise closure period
F. Default clause
6. Design of share repurchase mechanism (repurchase trigger clause, repurchase exercise conditions)
At the same time, supporting the relevant subscription application forms, encouraging employees to publicize the deadline and sign equity option agreements, and simultaneously preparing the information disclosure system for financial reports. Special agreement for synchronizing articles of association.
After creating the job, divide the weight. If you resign or change jobs, you will be rewarded according to the proportion of post weight. Incentives within the company need to flow, because with the development of the company, there will be personnel iterations, product iterations and even main business iterations, which cannot be completed at one time. Usually two or three rounds of stimulation will be done before the B round.
Fifth, the sense of ceremony is very important.
Incentives must be formal and should be avoided without a sense of ceremony. Let the motivated employees have a sense of responsibility and honor when holding shares. If employees don't feel that holding shares is a privilege, they will definitely not cherish it. At the same time, the boss must be sincere and not dishonest.