Finding the right equity incentive structure can feel genuinely overwhelming for company leaders. The reasons are plenty: the tangled tax rules, the many alternative structures, uncertainty about which terms to pick, the risk of getting it wrong, and the cost and time it all takes. š¤Æ
The reason there's no one-size-fits-all recipe is that the desired effect, the cost, the risk, and the tax treatment all interact, and they have to be looked at in the context of each specific company. That's why we see so many founders putting serious effort into understanding the space themselves, only to still end up with a large lawyer bill at the end of it. And often without fully accounting for the business-development side along the way.
Here's the thing: there is a sensible approach you can follow to arrive at a good structure for each specific company. You don't have to reinvent the wheel every time, but you do need to make a handful of important decisions along the way. After working through this with many companies and lawyers, Unlisted has developed and refined a method that helps clients land on a structure tailored to their situation.
Employee equity is often a real contributor to a company's success. It helps with recruiting, motivating, and retaining talent. For some people, it can make work feel more meaningful, build a sense of "we're in this together," and, as studies show, actually increase how much employees believe in the company. There's a reason mature ecosystems have refined these structures over time and use equity incentive programs widely. Silicon Valley is a prime example.
Unlisted's goal is to bring that success recipe to Norway. We've taken the models pioneered in Silicon Valley and adapted them to Norwegian conditions and rules.
Our process starts with a mapping exercise and a clear conversation about expectations. From there, we optimize the structure around the desired effect, tax treatment, cost, and risk for both the company and the employees. It's also important to plan for the many, often unexpected, eventualities that come up down the line.
Going through that process helps companies avoid the fallout of not doing the groundwork. That fallout can look like: a structure that doesn't actually fit the employees, one that creates frustration instead of motivation, one that isn't practically workable because of cost, taxation at the wrong moment, or too much risk landing on the employee. For the company, it can mean unnecessary costs, extra social security charges, liquidity problems, or ending up with passive shareholders on the cap table.
The process Unlisted has built takes all of those elements into account alongside best practice. That means companies can land a thoughtful, tailored structure in a way that saves both time and money.
Alongside helping companies get the structure right, Unlisted has built software to make it easy to implement and run different equity programs. The software handles the time-consuming admin and offers dashboards with a full view of ownership, dilution effects, documentation, and more. On the other side, employees get their own motivation dashboard and full visibility into their agreements. Lawyers we work with have told us that, beyond giving full oversight, the software can save up to 10% of a CEO or CFO's time at a growth-stage company.
Unlisted accounts for the business, accounting, and legal sides throughout the process. We collaborate with lawyers to deliver the documents and validate the software.
If your company is considering introducing some form of equity incentive, or simply wants better visibility and easier admin over existing agreements and ownership, get in touch for a no-obligation chat.