The following Share Incentives guidance note provides comprehensive and up to date legal information covering:
This Practice Note provides a brief introduction to the equity and incentive compensation plans and agreements that US startups often use to attract and retain key personnel. Although it is written with a focus on US companies, many of the issues raised in it are also relevant to a non-US company in the early stages of its development. To effectively advise US startups, and the investors that frequently finance them, it is imperative to understand startup equity and incentive compensation structures, and why and how they may differ from those offered by more mature companies. The following is a general discussion of compensation practices of investor-backed, Kickstarter-funded, and bootstrapped startup enterprises, where the founders’ intended trajectory is to quickly grow the company (and its value) in the hopes of an exit or liquidity event via an initial public offering (IPO) or sale. It is a world of short- to mid-term time horizons where investors (and founders and senior executives) demand significant growth and substantial returns. This is distinct from the mentality driving many new small businesses or family-owned businesses. It is also different than the approach often adopted by more mature private and public companies. One important distinction between mature enterprises and startups is that startups frequently have much less cash available to compensate employees and instead rely more heavily on
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.