EquityBee helps startup employees get the money they need to exercise their stock options before they expire by connecting them to investors who provide them with the capital to do so.
EquityBee helps employees unlock the value of their equity on one side – and on the other – give investors access to an asset class they could not access before private startups.
- Well known startups
- Great For Exercising Employees Options
- Great Israeli and American Startups
- Amazing Customer Service
- No Upfront Cost For Employees Exercising Their Options
- Only open to accredited investors
- Investments requires a minimum of $10k
Founded in early 2017 by CEO Oren Barzilai, CPO Oded Golan, and COO Mody Radashkovich. EquityBee is among the earliest employees options crowdfunded platforms. They raised more than $6.6M in venture funding to fuel their growth.
EquityBee positions themselves as a ‘’ StartUp Employees Options platform”, emphasizing the matchmaking role between ‘employees’ options and investors. EquityBee enables employees that have options to obtain the funding they need to be able to exercise their options, encouraging employees not to forgo the rights they got while working for the startup.
On the other hand, it provides investors on their platform the ability to invest in startups. In Addition, by funding the employee’s options of valuable companies that are not listed on the stock market. Basically helps to even off the playing field with Venture capitals.
EquityBee Offerings For Employees
EquityBee enables any employee that works for a reputable startup either in Israel or USA with vested options to exercise it by providing the necessary capital needed.
Not all employees have these financial means to exercise their vested options. On average, it causes 50% of employees to forgo their stock options, lose their hard-earned equity. As a result, the right of participating in the future success of the company they helped to build.
Exercising options can be a heavy financial investment .
EquityBee helps startup employees with the capital of the exercise cost. While still leaving employees with a portion of any future gains you’ll get on the shares you get funding for.
EquityBee provides a no upfront cost from employees who are seeking to exercise their options
How to Get Your Options Vested with EquityBee
Employees provide some basic information about the startup(company name)and the options, exercise cost you would like to fund.
After providing the following information, you then have a 1:1 call with their staff. Best of all, they go over the steps and the process and answer any questions or doubts you might have:
- Sending over employee grant and stock option plan documents
- Signing EquityBee Simple Funding Option Agreement (SOFA)
- Signing W8 Form- For United States Tax Withholding and Reporting
- A proof of option exercise, once EquityBee provides the capital to fund the options
With EquityBee employees maintain the rights of their options they exercise.
Why should investors invest through the EquityBee platform?
The startup’s investments are mostly dominated by venture capitals. In other words, very wealthy people who are usually very well connected. While new Platforms have opened this space to permit investors from all around the world. Therefore, to invest in startups that don’t have any product or haven’t raised any funds in the past. Those are regularly new companies in their early stage or that have not raised any funding yet.
EquityBee offers companies on their platform that are beyond their early stage and that have at least raised $5 million dollars from well-known venture capitals.
EquityBee offers accredited investors, family offices from all around the world the ability to invest on EquityBee platform. Besides the ability to invest in Israeli and American startups at a discount price, based on valuation set in the past. Offering investors an opportunity that was previously inaccessible to them. EquityBee has already helped investors to invest in companies such as eToro, Taboola, MyHeritage, SimilarWeb, Magic Leap, Iron Source and many more.
The following is possible, through the funding of employee stock options. Allowing individual investors to invest in companies that have raised money from top VCs and angel investors. Moreover, they are not looking to raise money from the crowd, or companies that aren’t even raising at all.
How To Invest In Israeli and American Startups With EquityBee?
In order to be able to invest, you must be to be an accredited (qualified) investors under the relevant laws of your residency.
You start the process by registering on EquityBee investor section
- Once you are approved, you will receive on a weekly basis an email, with opportunities to invest in some startups. For instance a confirmation as to how much you are willing to invest. Please take into account that the minimum is $10k.
- Afterwards, you will get a detailed walkthrough regarding the investing process and answer any questions you may have.
- The process will include signing EquityBee’s Simple Option Funding Agreement (SOFA),
- Transferring the investment amount to EquityBee paying agent.
- The paying agent will then transfer the funding amount to the company the employee works/ed for, or to the employee.
Investors pay an upfront fee of 5% plus the required VAT.
In addition, there is a 5% fee to EquityBee in case of a liquidity event.
The cost is split between the investor and the employee according to terms of the deal with the employee.
From all points of view, we really like EquityBee. We love simplicity, it provides employees and investors with an easy straightforward onboarding process. EquityBee platform makes it so much easier to actually invest and exercise their options. They provide amazing customer service and the ability for Investor to invest in a price that was set in the past.
All in all, we really liked the platform, but what really kicked EquityBee to the top of the list for us was no upfront cost to the employees looking to exercise their options.
Disclaimer: All the information stated below is based on Cryptostec personal views and personal experience, there may be additional conditions for employee and investor to use the platform