Click the star icon to save your favourite articles

Start searching to see results

11.4

Myth #3: European tech founders don't understand how to use stock options

Busted: European tech companies have historically lagged behind those from the US in their use of stock options as an effective tool to attract, incentivise and retain talent. However, looking at Advanced-HR’s latest employee ownership survey, there are signs that the latest generation of companies from Europe are now properly rewarding their most talented executives and employees. While there is likely sample bias because most founders who participate in the survey are likely to a) understand the issue more and b) be better at remunerating their employees, it is a positive sign. There is still work to do but thanks to leading European VCs, such as Index Ventures and Balderton, more founders are starting to take this issue seriously and the rest will hopefully follow suit. European governments need to pay attention too and ensure the implementation of progressive policies around use of stock options do not lag behind this evolved attitude among European founders. If you support enabling more effective use of stock options to incentivize talent in Europe, we recommend checking out the Not Optional initiative at www.notoptional.eu.

Employee ownership by funding round stage in 50th percentile by region

Legend

  • Executives (Europe)
  • Executives (US)
  • Staff + Other (Europe)
  • Staff + Other (US)
  • Unissued (Europe)
  • Unissued (US)
Note:
This details equity held by executive-level employees, staff-level employees and remaining unissued options. It excludes Founder’s Shares and equity allocations displayed as a percentage of fully diluted shares. Equity not related to salary nor incentives