EquityBee, a stock choice market startup, has raised $20 million in a Series A spherical of funding.
Group 11 led the financing, which additionally included participation from Oren Zeev Ventures, Battery Ventures and ICON Continuity Fund. It brings the corporate’s complete raised to over $28 million since its 2018 inception.
EquityBee CEO and co-founder Oren Barzilai says his firm’s mission is to help educate startup employees on the which means of their stock options, in addition to present them with funds to have the opportunity to buy them.
“I have seen many of my friends and colleagues negotiate a $500 salary increase, but completely disregard their stock options package, from lack of knowledge due to the whole field of startup stock options being opaque,” stated Barzilai, who additionally based Tapingo, which was acquired by Grubhub in 2018 for $150 million. “As a founder I saw my team members who helped build the company not take part in our success because they left prematurely and didn’t exercise their stock options.”
The method it really works is pretty easy. EquityBee supplies capital to startup employees to allow them to buy stock options. The employees get cash to cowl the price of exercising their stock options and the taxes. The traders who helped present the funding so they may try this get a return, or a share of the revenue, if there’s “a liquidity event.” EquityBee makes cash by charging an upfront payment from the investor on the funding day, in addition to any carried curiosity upon a profitable exit or IPO.
Barzilai stated that many employees don’t understand they’ve about 90 days to train options earlier than they expire as soon as they depart an organization. And even when they do, they might not all the time have the cash to train them. That’s the place EquityBee desires to help.
The firm was initially based in Israel earlier than launching within the U.S. market, and moved its headquarters to Silicon Valley in February 2020. Since then, it’s funded employees from “hundreds” of corporations, together with Airbnb, Palantir, DoorDash and Unity, with capital supplied by household workplaces, funds and high-net people. Its investor group is made up of 8,000 funds, household workplaces and high-net price people.
2020 was an excellent yr for EquityBee, in accordance to Barzilai, who says it grew by greater than 560% the sum of money it raised to fund worker stock options. It additionally noticed a 360% enhance within the variety of particular person employees funded via its platform.
Looking forward, the 33-person firm plans to use the cash towards hiring and increasing product choices.
Dovi Frances, founding companion of Group 11, stated it doubled down on EquityBee after backing the corporate in its $6.6 million funding spherical in February 2020 as a result of it’s impressed by what it described as the corporate’s “perfect product market fit” and triple-digit development.
WeWork co-founder Adam Neumann led the corporate’s $1.5 million seed spherical in September of 2018.