Attracting top talent as a startup can be difficult
Startups in critical growth phases often struggle to balance budgets with the need to attract and remunerate top-tier talent. Under an ESS, startup founders can offer employees shares or options to buy shares in the company, helping to motivate and retain workers. These are typically reserved for lower-level equity givings (<10%), and are best suited for employees, contractors and advisers.
How do you mitigate the rRisks?
You want to incentivise your hires, but you need to ensure your company’s best interests are protected. A sloppy equity arrangement, coupled with high churn of workers, is a massive red flag for investors and could complicate things during an exit. Improperly drafted ESS plans usually result in issues such as:
- Underperforming or leaving employees still holding equity
- Employees being able to stop a sale or exit of the company for the founders
- High buyback fees
- Disputes and claims by employees
Proceed confidently with an attractive, but rigid ESS
Our lawyers are experts in ESSs, having drafted schemes for a multitude of high-growth startups and businesses across Australia. We can advise on:
- Best-practice for establishing an ESS or ESOP
- Best-practice vesting schedules
- Drafting all requisite documents, including option plans and letters
- Establishing leaver mechanics to allow flexibility in cases of termination, exits etc.
- Establishing drag-along rights (so that if the business sells, the majority can force the minority to sell at the same price)
Frequently asked questions
Can I do this myself?
Are your documents automatically generated?
Is the price a fixed-fee?
Can I speak or meet with a lawyer, and will this cost extra?
What if I need this urgently?
This package doesn’t suit me, can I create my own one?
What if the document or advice I need isn’t on the website?
Employee share schemes
- Free consultation
- Done for you tailored legal documents to suit your needs
- Initial drafting and review + one round of amendments
- Practical legal advice
- Fast turnaround times (5-7 days)
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