Motivating start-up employees with equity.


Branding, Business building, Strategy, Content

The problem with employee equity

The world of start-ups is dominated by the names of their founders. Everyone knows Elon Musk, Sergey Brin, Jeff Bezos, but the reality is behind every successful start-up there is a team of equally amazing employees.

When these employees join the start-up journey early they are often accepting a similar size risk to the founders, but with way less pay-off in the end. In traditional economics, this means that the employees should ask for more compensation to accept this risk. But how can a start-up offer more compensation when they traditionally do not have the cash to offer higher salaries?

This is where equity comes in. Early stage employees are often given equity as a form of compensation for joining the start-up when it has a higher risk profile. This does many things, such as being a good form of compensation but also a great motivator.

What we found through personal experience is that often the process of giving and receiving employee equity was not functioning the way it should in a lot of start-ups. This resulted in the desired outcome (highly motivated and well compensated employees) not happening.

Finding the missing slice

It was found that the process of creating and giving equity to employees is a complicated field that often sits outside the domain of many founders' skill sets. It includes topics such as human resources, finance, accounting and legal aspects. This led founders to often leave the process of creating the schemes too late, often only getting it across the line once an external investor makes them complete it.

As is obvious, when you rush something you don't get the best quality, and you often pay a lot for it, and this is exactly what we found. Founders were often paying large sums of money and a lot of time creating these schemes, and even then not getting the desired result.

What was missing was an easy, service based solution to both alleviate the financial and time constraints of the founder, whilst delivering a first class experience for the employees.

What was needed was a way to make every slice count.

Building the perfect pizza

The process began by exploring how both founders and employees interacted with equity programs through an extensive set of interviews and surveys. The first results showed that founders thought the process was difficult and expensive, but ultimately thought they did a very good job. This was directly contradicted by employees feedback, even within the same company, where most employees hardly knew anything about their equity and most just “put it under the bed and forgot about it

As you can imagine when you are giving away a good portion of your company to employees, this is not a desired outcome.

From this basis a set of solutions was built. Founders needed support across the whole process, from ideation through to board approval and compliance. Employees needed an easy way to understand what equity was, and a platform to interact with it. There were also other key elements in the employee equity life cycle, from assistance in conversion through to post-employment management.

What we wanted to achieve was the maximisation of motivation of the high performance teams that are innovating and changing the world for tomorrow. Pomelo was born focusing on the creation, delivery, and management of employee equity plans for these teams.

Back the risk takers, accelerate their ambition

Pomelo is a very people centric business, therefore branding is critical to its success. The idea was to bring a ‘consumer product’ feel to an industry and market where it traditionally wouldnt be found. It's about motivation, optimism, and enabling people to change the world. This is represented in our brand content and tone. There is a use of vibrant colours, and focus on people.

The written content is light hearted, to cut through the jargon that is frequently used in finance, accounting, and legal industries.

The iconography and some visual content uses the slice frequently. Our motto is to “make every slice count” - there are many things in the world that are sliced - including Pomelos!

Finally our name was chosen among many alternatives, and chosen via survey. Pomelo was ultimately chosen because it aligned well with the brand of being more vibrant, light hearted, and optimistic.

We are maximising motivation, interested?

Pomelo is currently in its first year of operation of servicing customers. Focus is currently on assisting founders with creation, delivery and management of employee equity programs.

We are also in the process of developing the first digital section of the business which focuses more on employee interaction and engagement. This is being built alongside the employees, and done in a slower interactive process.

Later further functionality will be added on to both sides of the business. This will include further features across the whole employee equity life cycle, from delivery to conversion and post-conversion responsibilities.

Are you a start-up founder? Or someone who wants to learn more about equity? Give us a call today.