Startup Equity Compensation

Get a startup equity compensation plan to attract and retain the best employees

Overview

Startup equity compensation is one way for a business to attract and retain employees. The general idea of equity compensation is to offer employees a share of the company’s future profits in exchange for lower salaries up front. There are a variety of methods for gaining ownership in a company, each of which may have a significant tax burden on both the company and the employees.

Startups that offer equity compensations tend to take the form of stock options, which are used to incentivize employees who can benefit from the increasing value of the stock’s price. The value is theoretical at the outset since a young company usually does not have a valuation: there are no customers, purchase orders, or assets. For companies that are planning on going public and have a promising future, this can be a very appealing option to an employee. This right "vests" with time, so employees gain control of this option after working for the company for a certain period of time. When the option vests, they gain the right to sell or transfer the option. This method encourages employees to stick with the company for a long term.
 

How legal advice can help

Hiring a good lawyer will provide vital assistance in
almost every aspect of your business. 
Make sure it's done right
Equity is the end game for a lot of entrepreneurs. It’s important to preserve it and use it wisely. An startup equity compensation attorney will help you be responsible with your company’s equity by implementing an equity plan and correctly executing the corresponding documents.
Have an attorney to turn to
There’s a good chance you’re going to like your attorney from LawTrades and want to keep using him / her. Perfect - now you have a legal expert to turn to when in need.
Confirm your legal compliance
Compensating employees with equity implicates tax and employment / labor laws. Ensure that your company is complying with the law as you deal with equity compensation.
Prevent future issues
Receive proactive legal risk management that will help you avoid problems before they arise by tapping into senior attorneys with considerable business experience.

We offer everything you'll need
in one package.

Stock Plan Adoption:
Stock Plan
Board Consent
Stockholder Consent
Pre-filled 25102(0) Filing

Restricted Stock Grant:
Notice of Restricted Stock Award
Restricted Stock Agreement
Notice of Issuance
Pre-filled 83(b) Election Filing
Copy of Stock plan
Board Consent

Stock Option Grant:
Stock Option Agreement
Notice of Stock Option Grant
Copy of Stock Plan
Board Consent

Average Costs

The cost of a startup equity compensation plan can vary based on a number of different things.
To get an exact price for your business click here.

$350 - $900

*figure show is an average. costs may vary.

Common Questions

Can I draft a startup equity compensation agreement on a “do it yourself” website?
You may be able to find a template online but be careful. Those forms have major limitations, largely in that their forms are standardized and may leave out important details specific to your company. Equity should be coveted by all companies, and using such forms can expose your company and equity to unnecessary risk. 
Are there different forms of startup equity compensation?
Yes there are many different types equity compensation for your employees. The most common forms of equity compensation include incentive stock options (“ISO”), nonqualified stock options, phantom stock, and restricted stock units (“RSU”). With so much choice, it’s helpful to review your options with a business attorney.
Does compensating an employee with equity fulfill minimum wage laws?
Compensating employees only with stock or stock options is generally not considered wages for purposes of minimum wage calculation. Accordingly, this type of arrangement can easily violate minimum wage laws. While there might be ways to structure this type of compensation package, they are very narrowly construed and require robust legal skill. If you are thinking about this option as compensation, engaging an experienced attorney is essential in order to avoid fines or legal action, or both, that could impair your company’s brand and value. 
Does it make sense for my startup to have an option pool?
Stock options make the most economical sense for more sophisticated startups with a relatively developed staff. Because creating an options program is time intensive and requires highly specialized legal expertise, they are quite costly to implement. Therefore, creating a stock options program for just one employee does not usually justify the cost, but if you are planning to develop a highly skilled staff, then offering options could be the right choice. 
I’m an employee - can you review my employer’s proposed equity compensation?
Yes - LawTrades has financing attorneys available to review proposed equity compensation for employees.

HOW OUR PROCESS WORKS

Describe need.
We’ll have a brief but detailed discussion to understand your needs and provide you with an upfront price quote.
Meet attorney.
To match you with the best startup equity compensation lawyer, we tailor our search to the specific skills you’re looking for. It's simple and easy.
Review & accept.
We hold your funds and only release it to the attorney when you’re 100% satisfied with the work product.

LawTrades Startup Equity Compensation Attorneys

Discover our invite-only network of senior attorneys. Great companies
depend on our expertise for critical legal work. 
Jonathan Hood
New York, NY
⭐️⭐️⭐️⭐️⭐️ 
(39 Reviews)


"From my initial contact with Jon and with each successive correspondence we've had, Jon has been detailed, patient, and easy to talk to. Most importantly, he understood the startup space and knew right away what needed to be taken care of."





-Billy S.
Phillip Heller
San Francisco, CA
⭐️⭐️⭐️⭐️⭐️ 
(19 Reviews)


"Philip designed a thorough Terms of Service and Privacy Policy for my website that was directly tailored to my business. The project was completed on time and to my expectations. I will definitely use this service again." 


  



-Virginia A.
Jared Stark
Boca Raton, FL
⭐️⭐️⭐️⭐️⭐️
(23 Reviews)


"Jared was very knowledgeable and an overall pleasure to work with. He provided very quick turnaround and made sure all of our legal needs were satisfied. I would highly recommend his services to anyone else in the internet industry."




-David N.
Adam Bloom
Los Angeles, CA
⭐️⭐️⭐️⭐️⭐️
(12 Reviews)


"Adam is excellent at what he does, has fair pricing, and is as excited to work with our company as we are to build it. LawTrades also has excellent customer support, and I've enjoyed using the interface as well to track invoices."






-Abhi H.

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