EquityBee Review- Stock Options Platform

Overview

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.

Founded in early 2017  by CEO Oren Barzilai, CPO Oded Golan, and COO Mody Radashkovich. EquityBee is among the earliest employees options crowdfunding platforms. They raised more than $28.3M  in venture funding to fuel their growth.

EquityBee positions themselves as a ‘’ StartUp  Employees Options platform”. They emphasize on matchmaking between Employees and Investors. By enabling employees options and Incentives stock options (ISOs) to be funded by investors. EquityBee enables employees that have options to obtain the funding they need. In order to be able to exercise their options. Hence, 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 Pre IPO startups. Especially 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, ISOs , Restricted Stocks or Restricted Stock Units (RSU's) 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. Namely, to 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.

Moreover, 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 their company. In addition, you fill in, the options, exercise cost and the funding amount.

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

In addition, with EquityBee employees maintain the rights of their options they exercise.

Equitybee employees video explanation

Why  should investors invest through the EquityBee platform?

Venture capital mostly dominate startup's investment. 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 to invest. Enabling you to invest in startups that don’t have any product. Even in some cases that haven’t raised any funds in the past.  Those are normally new companies in their early stage.

EquityBee only add companies on their platform that are beyond their early stage. Most importantly that have at least raised $5 million dollars from well-known venture capitals.

The investor platform section is accessible to accredited investors and family offices from all around the world. You can invest in startups at discount price. You will most likely find many Israeli and American startups to invest on their platform. The beauty is that all their startups listing is priced with valuation set in the past. This offer 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.

It is easy and straightforward to sign up as an Investor on the platform.

You can also learn more about  Employee stock options

Equitybee For Investors

They provide multiple options to help its investors. It has a team of equity experts and intelligent tools to assist Investors to understand, maximize their potential returns and understand their risks. Following are the services offered by the platform:

Investor Community

This is especially beneficial for investors, who like simplicity. The investor can see all of the startups and companies for which they may invest in and see the overall price for each.

Investment details

It provides investor information such as :

• Options grant date
• Stock offer's price
• Last known share price
• Investor's proceeds
• Deal calculator
• Valuation
• Last round amount raised
• Total funding

Equitybee Investors tutorial

EquityBee Competitors

After carefully reviewing many companies, we came across only the following:

• EquityZen lets share owners exchange their shares for cash, even though the startup is still private. The platform gives qualified investors access to pre-IPO, late-stage technology acquisitions.

• SharesPost marketplace links investors and sellers of private equities and digital assets through our their platform.

• Microventures allows the acquisition or selling of late stage private equity. Along with a platform to facilitate secondary trades with its network of private buyers and sellers.

In summary, we noticed that the competitors above only solicit actual shares. As a result , EquityBee seems to be the only platform to offer the ability to convert your company options into shares.

Invest In Israeli and American Startups With EquityBee

In order to be able to invest, you must be to be an accredited (qualified). Furthermore, investors need to be under the relevant laws of their residency.

You start the process by registering on EquityBee investor section

• Upon approval you will receive weekly emails. They will include 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.

You can read our detailed EquityBee FAQ.

Getting Starting With Your Equity Options

1. Sign Up to the EquityBee Platform for free.
2. Complete a short electronic form to indicate your interest to sell, desired price, and number of shares.
3. If there is a potential Market Opportunity, an EquityBee Customer Success team member will reach out to discuss the transaction process.
4. EquityBee will work with their accredited investor base to source potential buyers.
5. The legal team at EquityBee will work with you and the Issuer to close the transaction.

Conclusion

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