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Startup Funding Espresso – Using Rule 701 To Issue Equity to Employees

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Manage episode 494580871 series 2414821
Content provided by Hall T Martin. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Hall T Martin or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.
Using Rule 701 To Issue Equity to Employees Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In a startup, it’s helpful to compensate employees with company stock. Most companies use stock options. Rule 701 gives the startup the ability to issue equity to its employees. This works even if they are not accredited investors. The limit is $10M or 15% of the outstanding shares in a 12-month period. Once you set the 12-month period, it must remain fixed. Rule 701 provides an alternative to the traditional stock option plan. It’s more flexible than an options plan and can be used to create more specific compensation plans. Founders often align the 701 disclosure with the fiscal year of the company. The shares are restricted stock, which means they must be registered with the SEC before one can trade them. Consider Rule 701 for your stock compensation plan. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let’s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: Check out our other podcasts here: For Investors check out: For Startups check out: For eGuides check out: For upcoming Events, check out For Feedback please contact [email protected] Please , share, and leave a review. Music courtesy of .
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2516 episodes

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Manage episode 494580871 series 2414821
Content provided by Hall T Martin. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Hall T Martin or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.
Using Rule 701 To Issue Equity to Employees Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In a startup, it’s helpful to compensate employees with company stock. Most companies use stock options. Rule 701 gives the startup the ability to issue equity to its employees. This works even if they are not accredited investors. The limit is $10M or 15% of the outstanding shares in a 12-month period. Once you set the 12-month period, it must remain fixed. Rule 701 provides an alternative to the traditional stock option plan. It’s more flexible than an options plan and can be used to create more specific compensation plans. Founders often align the 701 disclosure with the fiscal year of the company. The shares are restricted stock, which means they must be registered with the SEC before one can trade them. Consider Rule 701 for your stock compensation plan. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let’s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: Check out our other podcasts here: For Investors check out: For Startups check out: For eGuides check out: For upcoming Events, check out For Feedback please contact [email protected] Please , share, and leave a review. Music courtesy of .
  continue reading

2516 episodes

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