How startup
equity should be

Best practices for technology founders, employees, and investors who want to get the most out of their equity compensation.

What is PEER?

Pledge of Employee Economic Rights

Although equity compensation is supposed to empower and unite teams, historically, it has been employees getting the short end of the stick.

The Pledge of Employee Economic Rights (PEER) is a set of best practices that technology founders, employees, and investors are adopting to create a more effective, fairer environment for company building.

"This is a quote from someone really important that is super relevant to this page and content."

Jane Smith

CEO, Acme CO

"This is a quote from someone really important that is super relevant to this page and content."

Jane Smith

CEO, Acme CO

"This is a quote from someone really important that is super relevant to this page and content."

Jane Smith

CEO, Acme CO

"This is a quote from someone really important that is super relevant to this page and content."

Jane Smith

CEO, Acme CO

"This is a quote from someone really important that is super relevant to this page and content."

Jane Smith

CEO, Acme CO

"This is a quote from someone really important that is super relevant to this page and content."

Jane Smith

CEO, Acme CO

Leading companies believe in the power of equity

Adopting equity standards enables companies to attract and retain the best talent.

The 4 Pillars
of PEER

Transparency

Equity transparency

Equity represents a meaningful piece of founder and employee compensation. Potential hires deserve to know what their offer letter may actually be worth. Employees deserve to know what their equity may be worth at all times. These stakeholders should be given access to details such as fully diluted shares outstanding, the latest 409A valuation, the latest preferred valuation, liquidation preferences, and any non-standard terms that may impact economics.

Webflow gives transparency to new hires by providing key details in their offer letter so the candidate can make an informed financial decision.

Company callout

Liquidity

Access to liquidity

Employees who receive equity-based compensation should be given the opportunity to sell a portion of their vested equity before an initial public offering if there is demand in the market. Companies should make a good faith effort to make liquidity accessible, especially if their founders are able to take money off the table.

Rescale provides regular liquidity events for their team. Every year, eligible teammates can sell a portion of their vested shares in a tender offer.

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Education

Compensation education for all

Employees should receive resources to best understand their compensation, especially their equity-based compensation. This includes educational content with material covering details about their equity so they can understand what they own.

OpenAI brought in a financial and tax advisor around the fundraising event to explain to teammates exactly how their compensation was impacted by the new valuation.

Company callout

Flexibility

Extended exercise windows

Option-holders should have flexibility around when (and if) to exercise their stock options. Employers should, when possible, facilitate extending post termination exercise windows so that no employee should forfeit vested equity after just 90 days of termination. Employees should stay with their employer because they want to—not because they are afraid of losing vested upside.

Brex has extended the post termination exercise window to 7 years, so that no employee needs to worry about their equity immediately expiring.

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