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MAVROS
Equity Compensation
Private Company Shares
Mavros helps founders, investors, employees and advisors understand the mechanics of their equity compensation in private companies. This unique type of compensation can align equity holders with the overall prosperity of a business and become even more invested in the company's success. For founders, there's tremendous upside, but having an illiquid interest in a private company that represents a majority of your net worth comes with complexities. For employees, you may have questions regarding equity in a potential employer, or if you should stay at a company for longer.
Corporation Equity Types
The most common way to own equity in a company is to invest in a publicly traded company listed on a stock exchange. Almost anyone can invest in the stock market, and it's the most readily accessible way for the general public to own shares in a company. Additionally, employees who work for public companies may own stock in the company as part of their employment and compensation package as well.
Private companies such as tech startups, or other companies whose shares aren’t publicly available can offer equity as well. However, these shares are generally only available to founders, employees, an accredited investor, or a qualified purchaser such as a venture capital firm.
Common Shares
Employee Equity
Preferred Shares
Common Shares
Common shares are generally issued to a company’s founders and earliest employees. When you start a company, you must specify how many shares you're creating in the Articles of Incorporation. The company then determines how those shares will be divided amongst founders, employees, board members, advisors etc. and must configure the remaining portion of the capitlization table.
Employee Shares
Companies can issue several different types of equity to employees depending on the company’s capitalization table, fundraising stage, or option pool. These types of awards, while similar to the awards at public companies, have unique complexity and timing requirements that Mavros can help you understand.
Equity Types
Restricted Stock Award (RSA)
Incentive Stock Option (ISO)
Non-Qualified Stock Option (NQSO)
Restricted Stock Unit (RSU)
Preferred Shares
Preferred shares are primarily issued to investors when they invest in a company. Preferred equity holders have a liquidity preference (they get paid ahead of common shareholders in an acquisition of a company, or in the event of a bankruptcy). This preferential treatment is granted as an incentive for investors to take on the risk of the private investment.
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