With so many moving pieces for founders, maintaining discipline and focus when dealing with your capital structure is critical to the long-term health of the venture. Many entrepreneurs fail to understand the change in dynamics during this critical period. Most…
As of January 1st, 2005, the American Jobs Creation Act was amended to include Section 409A of the Internal Revenue Code (IRC). The regulation refers to rules surrounding non-qualified deferred compensation. This regulation aims to ensure that companies aren’t issuing stock options…
We have all heard that COVID has created a ‘new normal’ over and over. And while it can be exhausting, there are justifications to the claim. Venture capital backed companies are seeing huge shifts in valuations due to changed financial…
In companies that offer employee stock options, the benefit provides a valuable incentive for retaining employees, especially during times when the company is successful. An employee stock option plan gives your employees an opportunity to purchase discounted shares of your…
While companies focus heavily on the fundamentals of running their business, they also need to have a comprehensive understanding of how to create an employee stock option plan correctly. From creating the plan to managing it, there are many details…
Employee stock options are often dubbed ESOs and they can be a useful tool for startups and other companies. Employers can use them to attract top executive talent when they’re unable to offer top salaries. The offer of employee stock options isn’t…
Similar to stocks, stock options can work in or out of your favor. Stock options are a vehicle that gives someone the right to buy or sell shares of a particular stock at a specified price, for a finite period.…
The purpose of a 409A valuation is to determine the value of the shares that your privately held company can offer to your employees in the form of stock options on a tax-free basis. It’s imperative to be diligent in…
Your hard-working employees bring a lot of value to your company. While you need top-quality talent to get your company up and running profitably, your bottom line may not allow you to pay top dollar for top talent. What you…
As with most new rules and laws, 409A plans were established in response to a significant public scandal—the Enron scandal. As talk of bankruptcy was looming, many Enron executives arranged to accelerate the payments under the company’s deferred compensation plan…
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