Comments on: What are some of the things I should consider when setting up a stock option plan? http://www.foundersspace.com/fund-raising/what-are-some-of-the-things-i-should-consider-when-setting-up-a-stock-option-plan/ Sat, 11 May 2013 16:45:53 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Andy Klemm http://www.foundersspace.com/fund-raising/what-are-some-of-the-things-i-should-consider-when-setting-up-a-stock-option-plan/comment-page-1/#comment-459 Andy Klemm Fri, 05 Nov 2010 14:48:17 +0000 http://www.foundersspace.com/?p=5298#comment-459 Excellent post and comments -<br><br>A company may also make a careful assessment of ongoing stock plan administration requirements and sources to get that done on an outsourced basis. In addition, the company might consider subscriptions for recipients to one of the option advisor newsletters and reference sources. Excellent post and comments -

A company may also make a careful assessment of ongoing stock plan administration requirements and sources to get that done on an outsourced basis. In addition, the company might consider subscriptions for recipients to one of the option advisor newsletters and reference sources.

]]> By: John Nichols http://www.foundersspace.com/fund-raising/what-are-some-of-the-things-i-should-consider-when-setting-up-a-stock-option-plan/comment-page-1/#comment-456 John Nichols Wed, 03 Nov 2010 17:29:19 +0000 http://www.foundersspace.com/?p=5298#comment-456 In developing markets consider the local impact - value relative to other elements of reward. A retention issue / opportunity? Also whether in certain countries staff can aford to participate in HQ stock purchase plans. In developing markets consider the local impact – value relative to other elements of reward. A retention issue / opportunity? Also whether in certain countries staff can aford to participate in HQ stock purchase plans.

]]> By: Dan Walter - Performensation http://www.foundersspace.com/fund-raising/what-are-some-of-the-things-i-should-consider-when-setting-up-a-stock-option-plan/comment-page-1/#comment-455 Dan Walter - Performensation Wed, 03 Nov 2010 14:39:51 +0000 http://www.foundersspace.com/?p=5298#comment-455 Ethan,<br>Thanks for the additional information. Excellent points. Ethan,
Thanks for the additional information. Excellent points.

]]> By: Ethan Stone http://www.foundersspace.com/fund-raising/what-are-some-of-the-things-i-should-consider-when-setting-up-a-stock-option-plan/comment-page-1/#comment-454 Ethan Stone Wed, 03 Nov 2010 14:17:55 +0000 http://www.foundersspace.com/?p=5298#comment-454 This is a good rundown. It's worth thinking about whether angel or VC investment is part of business plan. If it is, you need to be very careful in setting up an option plan (or any kind of equity compensation) to think about how potential angel or VC investors will see it. Angels and VCs generally prefer a clean capital structure and usually want a say in how much equity compensation the company gives out, to whom and on what terms. So if angel or VC investment is a near term possibility, it's usually better to wait to finalize your equity compensation plan in conjunction with the investment.<br><br>That said, it's definitely worth coming up with a tentative plan before you start talking to the investors. Investors will expect you to have given the topic serious thought and won't be impressed if you haven't. Also, equity compensation plans are usually a topic of negotiation in an angel or VC investment (see item 2 in this post for a discussion: <a href="http://www.foundersspace.com/fund-raising/what-are-the-top-5-things-we-should-pay-attention-to-when-negotiating-a-term-sheet-with-vcs" rel="nofollow">http://www.foundersspace.com/fund-raising/what-are-the-top-5-things-we-should-pay-attention-to-when-negotiating-a-term-sheet-with-vcs</a>/). So, as with any negotiation, it's a good idea to have thought through what you want before you start. This is a good rundown. It's worth thinking about whether angel or VC investment is part of business plan. If it is, you need to be very careful in setting up an option plan (or any kind of equity compensation) to think about how potential angel or VC investors will see it. Angels and VCs generally prefer a clean capital structure and usually want a say in how much equity compensation the company gives out, to whom and on what terms. So if angel or VC investment is a near term possibility, it's usually better to wait to finalize your equity compensation plan in conjunction with the investment.

That said, it's definitely worth coming up with a tentative plan before you start talking to the investors. Investors will expect you to have given the topic serious thought and won't be impressed if you haven't. Also, equity compensation plans are usually a topic of negotiation in an angel or VC investment (see item 2 in this post for a discussion: http://www.foundersspace.com/fund-raising/what-are-the-top-5-things-we-should-pay-attention-to-when-negotiating-a-term-sheet-with-vcs/). So, as with any negotiation, it's a good idea to have thought through what you want before you start.

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