{"id":7031200,"date":"2026-08-07T02:00:13","date_gmt":"2026-08-07T02:00:13","guid":{"rendered":"https:\/\/peraltafinancing.com\/angel-investor\/employee-share-scheme-insights-for-founders\/"},"modified":"2026-08-07T02:00:13","modified_gmt":"2026-08-07T02:00:13","slug":"employee-share-scheme-insights-for-founders","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7031200","title":{"rendered":"Employee Share Scheme Insights for Founders"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p class=\"wp-block-paragraph\"><em>Employee share plans can be one of the most powerful tools a founder has for attracting and keeping great people \u2014 but the thought of giving up hard-won equity can feel daunting. In this article, Sarah Anderson from our expert employee ownership partners, <a href=\"https:\/\/www.rm2.co.uk\/\">RM2 <\/a><\/em>, <em>address the most common concerns founders raise, and explain why many of the perceived obstacles are far more manageable than they first appear.<\/em><\/p>\n<p>Using employee share plans can be a great way to incentivise and retain staff in a competitive labour market. However, founders\u00a0who\u2019ve\u00a0built a business from scratch will\u00a0of course be protective about the value they\u2019ve\u00a0created,\u00a0and\u00a0may have doubts about\u00a0giving up part of their business.<\/p>\n<p>Many of these concerns are extremely manageable. Here are some suggestions for dealing with the questions\u00a0we\u2019re\u00a0most commonly asked\u00a0by founders thinking about employee share schemes.\u00a0<\/p>\n<h2 id=\"h-i-don-t-want-to-lose-control-of-my-company\" class=\"wp-block-heading\"><strong>I don\u2019t want to lose control of my company<\/strong><\/h2>\n<p class=\"wp-block-paragraph\">Use \u201cexit only\u201d options. Optionholders don\u2019t get any share rights (eg voting rights or dividend rights) \u2013 if a sale happens, options are exercised and shares sold almost simultaneously at the time of a sale.<br \/>Alternatively, you could also create a different share class for employees, which carry dividend rights (though probably paid at a different rate to founders) \u2013 but no voting rights.<\/p>\n<h2 id=\"h-i-want-to-avoid-dilution-nbsp\" class=\"wp-block-heading\"><strong>I want to avoid dilution\u00a0<\/strong><\/h2>\n<p class=\"wp-block-paragraph\">Consider creating growth shares with a hurdle to protect existing shareholder value. Alternatively, exit only options will ensure dilution only impacts at the point of sale. Or, if you attach performance targets which only deliver specific levels of option exercise, you can ensure any dilution is balanced by value growth.<\/p>\n<h2 id=\"h-i-need-my-plan-to-be-tax-efficient-nbsp\" class=\"wp-block-heading\"><strong>I need my plan to be tax efficient\u00a0<\/strong><\/h2>\n<p class=\"wp-block-paragraph\">If possible, make use of government recognised tax advantaged share plans such as Enterprise Management Incentive or Company Share Option Plan. These will suit most independent private companies. In comparison to cash or bonus payments, these schemes will result in charges to capital gains tax for employees rather than income tax and NICs charges. The company can often also benefit from NICs savings and corporation tax deductions.\u00a0\u00a0<\/p>\n<p class=\"wp-block-paragraph\">Even if your company can\u2019t use these plans (for example, if you want to use subsidiary company shares in your plan), there are other share plan arrangements that can be structured to deliver tax efficiency, usually involving the direct acquisition of shares by employees.\u00a0<\/p>\n<h2 id=\"h-i-want-my-employees-to-have-skin-in-the-game-nbsp\" class=\"wp-block-heading\"><strong>I want my employees to have skin in the game\u00a0<\/strong><\/h2>\n<p class=\"wp-block-paragraph\">Founders have given up blood, sweat and tears to build their business \u2013 it\u2019s only fair that you might want employees to show their commitment by making a financial investment. You can allow employees to acquire shares directly, and pay full market value for their shares. However, you may need to think about how much your employees can afford to pay. High costs can be mitigated by, for example, putting in place delayed payments for shares, or awarding growth shares that will only deliver a return to employees beyond a certain hurdle, requiring a lower financial investment at the outset.\u00a0<\/p>\n<h2 id=\"h-i-nbsp-don-t-nbsp-want-to-give-up-any-actual-equity-nbsp\" class=\"wp-block-heading\"><strong>I\u00a0don\u2019t\u00a0want to give up any actual equity\u00a0<\/strong><\/h2>\n<p class=\"wp-block-paragraph\">If you\u2019re still not certain that equity ownership is the right thing for you, you might think about using phantom shares or options, or Long Term Incentive Plans that pay out cash based on the increase in share value over a certain period. These plans aren\u2019t tax efficient, but they can provide incentivisation tied to increased share value without using up precious equity.\u00a0<br \/>\u00a0<br \/><em>If you would like to talk about how an employee share plan can work for you and your business, <a href=\"https:\/\/www.rm2.co.uk\/\">RM2 <\/a>Employee Ownership offers a free telephone consultation without cost or commitment. Contact them on enquiries@rm2.co.uk to arrange a call with one of their experts.<\/em><\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Employee share plans can be one of the most powerful tools a founder has for attracting and keeping great people \u2014 but the thought of giving up hard-won equity can feel daunting. In this article, Sarah Anderson from our expert employee ownership partners, RM2 , address the most common concerns founders raise, and explain why [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7031201,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12034],"tags":[13604,12635,10844,15674,11198],"dealstore":[],"offerexpiration":[],"class_list":["post-7031200","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-angel-investor","tag-employee","tag-founders","tag-insights","tag-scheme","tag-share"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Employee Share Scheme Insights for Founders - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=7031200\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Employee Share Scheme Insights for Founders - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Employee share plans can be one of the most powerful tools a founder has for attracting and keeping great people \u2014 but the thought of giving up hard-won equity can feel daunting. 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