What does equity incentives mean for startups?

Equity incentives, first of all, you must understand its significance to the development of enterprises.

Real equity incentive: not only with the company's equity or share-related value-added rights, but also with the wealth of the whole society, the future wealth, the upstream and downstream wealth of the enterprise, and even the wealth of employees, to build a set of win-win mechanisms within the enterprise with all stakeholders.

Equity incentive for enterprises, not to do bigger, but to do equity incentives to become bigger, I believe you can think of doing equity incentives in the early stage of entrepreneurship, ideological awareness is very high. Only by building a nest can we attract phoenixes.

Start-ups, 1 no capital, 2 no technology, 3 no talent. Therefore, you can only have technology if you recruit people first, and only when you have technology can you have capital. It's a cycle of cycles. So it is recommended that you study first. You can consult with me.

Because the benefits of implementing equity incentives for enterprises:

1. Attract, retain and motivate talents.

2. Restrain directors, senior managers, core technical (business) personnel and other personnel that the company believes should be motivated.

3. Improve the corporate governance structure and attract private equity financing.

Extended information: 1. Equity incentive, also known as option incentive, is a long-term incentive mechanism implemented by enterprises in order to motivate and retain core talents, and is one of the most commonly used methods to motivate employees. Equity incentives are mainly used to give employees part of their shareholders' rights and interests conditionally, so that they have a sense of ownership, so as to form a community of interests with the enterprise, promote the common growth of the enterprise and employees, and help the enterprise achieve the long-term goal of stable development.

2. Equity incentive is a method for enterprises to take out part of their equity to motivate senior managers or outstanding employees. In general, there are conditional incentives, such as how many years the employee needs to work in the enterprise, or complete a specific goal to be motivated, when the incentive personnel meet the incentive conditions, they can become shareholders of the company, so as to enjoy shareholder rights.

3. In the early stage of the development of start-ups, funds are relatively tight, and the biggest problem caused by insufficient funds is the loss of personnel, especially the senior managers and core employees of the team, whose loss will have an immeasurable impact on the start-up.

4. In order to improve team cohesion and retain management and core employees with limited salaries, entrepreneurs racked their brains and slowly studied a long-term incentive system for other members including the company's senior managers and core employees, that is, equity incentives.

5. Regarding the difference between equity and option incentives, let's first take a look at the difference between equity and options. Equity refers to the right of shareholders to obtain economic benefits from the company and participate in the operation and management of the company based on their shareholder qualifications; An option is a company that grants certain people the right to purchase a certain amount of equity or shares in a company for a certain period of time in the future with pre-determined ** and conditions.

6. In practice, there are situations in which "equity" and "option" are used as incentives, which are determined by the company, and the main factors to be considered include the company's equity structure, cash flow situation, and the demands of the incentive recipients.

In market practice, the common total proportion of equity incentives for startups is 5% to 20% of the company's equity, and as the company grows, the company may need to set aside a larger share to further motivate existing employees and new members who join the company. These incentive shares are mainly used in the following four most typical situations, and are issued by the company to the company's employees on a regular basis.

1. New employee incentives: For new employees, they will be granted incentive equity with reference to the market level, so as to provide market-competitive equity incentive remuneration and attract outstanding talents to join. If the mainstream situation in the market is that the position corresponding to the new employee does not need to be granted incentive equity, then the incentive equity of the new employee corresponding to the position can be zero, that is, the employee equity incentive will not be granted for the time being.

2. Promotion incentivesThe incentive equity in the case of promotion is aimed at rewarding the old employees of the company who have been promoted. The promotion incentive equity should ensure that the incentive equity obtained by the grantee reaches the market level of the newly hired employee, so as to reduce the employee's impulse to change jobs in order to obtain higher remuneration in this case.

3. Incentives for outstanding performanceIn this case, the incentive equity will be awarded to the outstanding employees in the company, which can be issued on an annual basis, aiming to reward these employees for their outstanding performance in the previous year. Incentive equity with outstanding performance can be granted with reference to 50% of the market level of incentive equity for the same position at that time. This type of incentive equity is mainly for employees outside of the company's management.

4. Loyalty incentives: This type of incentive equity is granted to all employees of the company, as long as the employee has served the company for a certain period of time (such as two to three years), and a certain share is granted every year thereafter. The logic behind this design is that the company does not want to wait until the employee has fully received the incentive equity that was granted for the first time before granting a new incentive equity, because at that point, the employee may consider and weigh new job opportunities. The annual loyalty incentive can be set at 25% of the market level of the incentive equity for the same position at the time.

The advantage of a 25 per cent annual payment instead of waiting for a lump sum payment after four years is that it can further reduce the level of one-time vesting every four years.

vestig) is driven by the economic interests of employee turnover at peak times. While it may complicate the implementation of employee equity plans, startups at a certain stage of development should weigh the pros and cons and try to avoid peaks and retain talented people to provide more long-term service to the company.

The pioneer of the Team Token Employee Wallet, it is an enterprise management software cloud (SaaS) with incentives at its core. Its core value is to provide each employee with an employee wallet, so that each employee can have their own points account, cash** account, virtual** account, option account, enterprise annuity account, etc. and realize the management of employees' digital assets within the enterprise.

It also provides an application ecosystem with incentives at its core. Including team collaboration software, performance management software, CRM software, etc. These software are also employee wallets for data**, allowing collaboration, performance, and more

Sales and other work can be reflected in real time, out of recognition of employees' work, and reward the corresponding points, cash, ** or options. This way management is more motivating. The navigation and permission settings are clear, versatile and in-depth, suitable for large and medium-sized businesses.

Open ports, closed stupid can be embedded in DingTalk and WeChat. First, have each employee have three accounts that dynamically store incentive value. Points Account (Quantitative Process, Recognition Feedback)Points account, Recognition Feedback are applicable to points.

Employees can apply for points by themselves or others, and the application will be reviewed by the reviewer.

Points are a kind of recognition of the work process and good behavior, and the feedback is accompanied. The points standard can be set by the enterprise managers themselves, and the enterprise can guide the behavior of employees to develop in the direction advocated by the corporate values by setting the point standards. Purpose:

One of the bases for triggering rewards and one of the important bases for performance appraisal.

Cash account rewards performance, short- and medium-term incentives, internal issuance of digital currency to motivate employees, cash coins can be cashed out in the future, benefits can be purchased, and virtual shares can be subscribed. It can be used in scenarios such as performance bonuses, commission rewards, special rewards, and year-end bonuses. Gold coins are issued under the endorsement of corporate credit, and the company uses future funds to motivate current employees.

Employees who have the right to spend can purchase welfare products through "Spending Right Cash Coins" or "Spending Rights Points". The right to consume is to obtain the right to consume through rewards, just like the "food stamps" in the era of the planned economy.

A successful equity incentive plan should first consider the development cycle of the enterprise, and choose a plan suitable for the enterprise.