The new startup benefit: Equity education
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Equity, in the form of stock options, is a key component of startup compensation. Yet, companies aren't going the extra mile to help their team understand and maximize their equity potential. Startup employees are demanding more education and citing its importance when joining, engaging, and staying with their company.
Secfi surveyed more than 1,000 startup employees who exercised their stock options to understand their personal motivators and the role their company played in their decision-making process.
Key findings:
75% say that stock options were an important reason they joined their company
92% took on personal financial risk in order to own their options.
Buying stock options can be risky because there’s no guarantee that the company will go public or get acquired. Those who use their own cash savings or take out loans to cover exercise costs have no way of recouping the costs if their company has a less-than-favorable exit.
88% say it's very important for companies to offer equity education
Startup employees want their company to help them understand stock options. Employees expect their company to provide equity education to make an informed decision about their stock options.
The startup community values the educational resources their company provides to help them make an important financial decision.
“When I was hired, I was provided the following details about my stock options:”
"My company provided me with the following information about my options proactively:"
Other studies, including a report by McKinsey & Company, also show that employees care more about feeling valued by their companies than they do about compensation, especially in the era of "The Great Resignation."
This national survey of over 1,000 startup employees was commissioned by Secfi and conducted by Propeller Insights, an independent survey research firm in 2021. Propeller Insights uses quantitative and qualitative methodologies to measure and analyze marketplace and consumer opinions.
Secfi is trusted by thousands of startup employees for equity planning and financing. We’re the first to provide a proprietary suite of equity planning tools, 1:1 guidance with licensed equity strategists and a set of financing products that enable employees to own a stake in the company they helped build. We also provide company-wide education for startups at all stages to help their team make the best decision for their own situation. Currently, we have worked with employees from more than 80% of all U.S. unicorns. For more information, please visit www.secfi.com.